Guest opinion: A Lake Country Power Board rookie year reportIt’s been a year since joining the Lake Country Power Board, and to summarize, a lot has happened.
By: Jim Huhta, Pine Journal
It’s been a year since joining the Lake Country Power Board, and to summarize, a lot has happened. As soon as I joined the board we were in the process of determining whether we were to be regulated by the MPUC for our rate structure. Fortunately, I think the proper vote prevailed, keeping the regulation local and with our member board. I thank the staff of LCP and the manager for providing me with the data necessary to reach out to the membership and confront this matter. Sherm Liimatainen was also instrumental in teaming up for “member meetings” and assisting me throughout this period. Thank you all.
The message we tried to convey was that each Co-op is different and the local board can better determine the rate structure necessary to provide the service to our members than what the MPUC can. And that you, the member, have direct contact with the directors on issues affecting LCP. We are now treated as all other co-ops with regard to the law concerning the petition process, rather than have a lower number of signatories required, which only applied to LCP in a discriminatory fashion. This improvement was a result of legislative action that was initiated by your directors. In short, we are now on equal footing with all other electric co-ops when petitioning the membership.
While getting up to speed on all the data available to directors, I also took time to look back on some of the history by reviewing old papers and annual reports of Carlton County Co-op Power Association and United Power Association that had come into my possession. I was somewhat amazed at the topics discussed back in the 1970s, before all the subsequent mergers took place. In 1977, Manager Henry Holm was writing about the “energy crisis” and the need to conserve electricity, much the same as we are today. The previous December, Kettle River had reached the largest peak ever at 13,460 Kwh. We even had the “power cost adjustment” in 1977. Today we are purchasing power from Great River Energy, a product of the merger of UPA and Cooperative Power Association. GRE has a generating capacity of 3,000 megawatts. The transformation that has taken place over the years is stunning.
The industry is changing, as we are all becoming more interdependent on one another. Alliances are forming between public utilities and cooperatives in an effort to share the expense of improving our infrastructure. The CAPX2020 project, a $2 billion effort led by Great River Energy and XCEL Energy, will help the delivery of the wind resources throughout the Dakotas and Minnesota to our members and markets with new transmission lines all the way into Wisconsin. Nine other cooperatives and utilities are also collaborating in this effort to reduce their long-term costs and provide power for their members well into the future.
GRE is LCP’s wholesale supplier for power and we share ownership along with 27 other co-ops. GRE primary generation plant is Coal Creek Station, which has a capacity of 1,131mw. In addition, there is Stanton Station 188mw and a combination of peaking plants fueled by natural gas, fuel oil and refuse. They also have five wind contracts totaling 369mw with another 100mw scheduled for the future. These diverse sources make up the generating capacity for GRE. As a reminder, members can promote the wind projects through the Wellspring program, in which case 100kw blocks may be purchased for 50 cents per block.
Projects for GRE include renovating the existing generating plants to comply with future EPA emission standards and developing new sources of revenue to help hold rates down. Political action to determine exactly how the emissions will be dealt with as we transition to clean energy production is currently under way. Some investments provide no revenue for GRE, such as emission modifications, so these costs are passed on through rate increases in some form to members. Blue Flint Ethanol is one investment, however, that adds revenue for GRE by selling steam heat to help the corn drying process during ethanol production. It increases the efficiency of our generating plant, and adds revenue for GRE so that rates can be somewhat mitigated.
The recent recession has had an adverse impact on members as revenues have fallen. The projects started to meet the future demand cannot be allowed to go unattended and deteriorate, as the economy will eventually pick back up, and we will need to provide the necessary power when that happens. The existing infrastructure needs to be maintained. We are trying to hold costs down while we still keep an eye on the future needs, and we all feel the economic pain. We need to “cinch up and persevere,” as eventually the wind will be at our backs. Here’s wishing you the best, and we’ll see you on the trail.
Jim Huhta of Cromwell sits on the Lake Country Power Board of Directors.