Extreme and prolonged cold weather across Southwest Power Pool’s (SPP) 17-state service area, natural gas supply issues, and decreased wind generation contributed to an unprecedented energy emergency across the midsection of the United States in February 2021.
Basin Electric Class A and C members experienced controlled interruptions of service from
Feb. 15-16, 2021. The outages were a result of direction given by SPP for transmission operators including Western Area Power Administration (WAPA) to shed load on the transmission grid. WAPA and Basin Electric are members of SPP.
SPP has been coordinating energy services since 1941 and had never issued an Energy Emergency Alert beyond a Level 1 before Feb. 15, and this was the first time in SPP’s history that SPP called for controlled interruptions of service.
In addition to load being shed quickly by members, some large load was voluntarily shed within Basin Electric operations. At the Freedom Mine, all three Bucyrus Erie 2570 draglines were shut down from Feb. 15-19, which saved a little more than 6 megawatts (MW) in the Roughrider Electric Cooperative system. Roughrider Electric is a Class C member of Basin Electric.
At Dakota Gasification Company’s Great Plains Synfuels Plant near Beulah, North Dakota, power use was reduced by about 10.5 MW in the urea production facility and other areas, which was accomplished without reducing natural gas production.
Because Basin Electric has an extensive generation fleet that is both geographically and fuel diverse, our generation fleet provided revenue which offset over 90% of the cooperative’s load costs during the event. Basin Electric was able to maintain operations and mitigate exposure to high market power prices. The highest hourly prices exceeded $4,100 per megawatt-hour at Basin Electric’s load zone in the SPP market. To put that in perspective, the highest hourly prices in 2021 leading up to the event were about $59 per megawatt-hour.
Basin Electric’s planning and vertical integration helped avoid high fuel prices. The Synfuels Plant was producing natural gas that was desperately needed. Cold weather shut in many gas producers, but not the Synfuels Plant. Because the Synfuels Plant produces gas and has firm capacity on the Northern Border Pipeline, it provided fuel assurance, transportation, and price protection with the natural hedge between Basin Electric and Dakota Gas.
As a result of the above mitigating factors, Basin Electric’s strong liquidity position was sustained through the event. Lastly, Basin Electric’s deferred revenue was available to assure stable member rates as well as maintaining a strong financial position that supports our A credit rating.
How to Avoid Future Emergencies
This unprecedented event highlights the value of Basin Electric being a member in regional transmission organization markets. The SPP market provides a mix of more than 800 generators that can supply energy to the market in many varying conditions.
The regional transmission organizations Basin Electric participates in are taking steps to prevent another February 2021 scenario. SPP completed a Comprehensive Review Report, the results of which improved communication and reduced the number of outages approved. In addition, SPP conducted an in-depth study and created the Improved Resource Availability Task Force to address the issues leading up to last February’s event. The task force is addressing the items first that were deemed to be the highest priority: fuel assurance and resource planning and availability. Within MISO, the market is asking for weekly fuel availability on the units that are generating power in the market. That will give the market a better idea of which units they have available with fuel to operate.
