Nation’s electric grid could face winter challenges
The increasing demand for electricity and the retirement of reliable power plants are contributing to an “unprecedented” risk of power shortages across the United States this winter, according to a report from the North American Electric Reliability Corporation (NERC).
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North Star members should prepare for increased demand response hours this season
If you’re a member enrolled in your co-op’s off-peak (or demand response) program, knowing the “why” behind the moments your dual fuel heating is temporarily switched is likely important to you – especially during the long, cold months of winter. Our power supplier, Minnkota Power Cooperative, makes the decision of when to shift off-peak members to their backup heat source for a variety of reasons, but it all comes down to affordability and reliability.
In a typical winter season, Minnkota tries to keep its demand response hours managed to 250 hours. This year, the goal is the same, but there will be unique obstacles to overcome in order to meet it. One of those challenges is a three-month planned maintenance outage on Unit 2 of the Young Station, one of the largest sources of power for Minnkota’s members.
“The outage is at beginning of the season, September into December, which is generally a light demand response period for us. The outage has the potential to increase our hours at the beginning of the season,” said Dan Trebil, Minnkota’s energy supply manager. “That, combined with the volatile energy market that we’re seeing, is going to play a part in how close we are able to manage to that 250-hour level.”
When Minnkota needs additional energy to meet the needs of its members (perhaps when there’s no wind for the turbines and demand is extremely high), it looks to purchase energy from a regional market. Over the past few months, that market has seen dramatic spikes in price – something Minnkota tries to avoid to protect its membership.
“The biggest things that are playing into the volatility are transmission constraints in our area, as well as the price of natural gas,” Trebil explained. “Right now, the price of natural gas is actually the lowest it’s been in the past few months. That was somewhat anticipated, but it’s also anticipated that it will go back up come December or January.”
It’s important for members to prepare now for increased demand response this winter. Individuals with off-peak dual fuel heating systems should check that they have adequate fuel for their backup source (propane, fuel oil, etc.). Off-peak members are sometimes caught by surprise when demand response kicks in for the first time, especially when it’s early in the season.
Remember that your co-op’s demand response program is a win-win-win for all involved. Enrolled members are thanked with a reduced electric rate (and no interruption in comfort), the co-op can navigate high-demand days while avoiding expensive market purchases, and the entire regional grid benefits from reduced demand.
“We’re in an interconnected system,” Trebil said. “When the grid gets into a potentially unstable situation, it’s because of tight conditions between generation and demand. So we’re able to respond in those situations with our demand response to not only help us and our members, but the grid as a whole. Lowering our demand helps balance the entire footprint.”
For sale: 8 foot box from a 2021 Dodge Ram 3500. Comes with bumper and 2.5 inch receiver hitch. $3,000 – please call our Baudette office at 218-624-2202 and ask for Todd Higgins with any questions.
Recently signed Inflation Reduction Act will help accelerate energy projects such as Minnkota’s Project Tundra carbon capture initiative.
Minnkota Power Cooperative and its cooperative partners across the country will have access to important new tools to navigate the energy transition following passage of the Inflation Reduction Act. The bill, signed into law on Aug. 16, includes provisions to accelerate the development of technologies needed to meet ambitious environmental goals.
“The electric cooperative-focused provisions in this bill have the potential to drive energy innovation forward at a pace we’ve never seen before,” said Mac McLennan, Minnkota president and CEO. “Now the real work begins to ensure that the industry is carefully planning for a responsible energy transition that includes the continued operation of baseload and dispatchable resources. As we enter one of the most transformational periods in our industry’s history, we continue to support an all-of-the-above energy strategy that preserves reliable, affordable and resilient electricity for our membership, while also answering the call to significantly lower CO2 emissions.”
One of the most substantial provisions is the creation of a “direct payment” option for electric cooperatives to utilize energy tax credits. Historically, co-ops have not had direct access to those credits because of their not-for-profit status. With passage of this legislation, co-ops will have a level playing field with for-profit utilities, which have long enjoyed tax credits to develop wind, solar and other renewable energy projects. The bill contains investment tax credits and production tax credits for solar, wind, carbon capture, nuclear, manufacturing of clean energy components and other energy technologies.
In addition to the direct-pay incentives, the 45Q tax credit for carbon capture and sequestration was increased from $50 per ton to $85 per ton. This increase provides a significant boost to the economics of the Minnkota-led Project Tundra carbon capture initiative. The project is currently in the advanced engineering phase and is being designed to capture and store 4 million metric tons of CO2 annually. A decision on whether to move forward with the project is anticipated in 2023.
“The carbon capture provisions included in this bill will be a game changer for the development and deployment of this much-needed technology,” McLennan said.
Electric cooperatives will also benefit from a $9.7 billion grant and loan program through the USDA to develop clean energy systems. The program is specifically designed for co-ops to advance renewable energy, storage, carbon capture, nuclear and other projects that will lower greenhouse gas emissions and otherwise aid disadvantaged rural communities.
For McLennan, the passage of this bill represents decades of work by electric cooperatives across the country. In fact, he recalls advocating for similar direct-pay provisions during the early 2000s while working at the National Rural Electric Cooperative Association (NRECA).
As this massive bill moved through Congress, McLennan said he is grateful that electric cooperative priorities made it to the finish line.
“On behalf of Minnkota, I would like to express our appreciation for Senators Tina Smith and Amy Klobuchar for their leadership and commitment to helping rural America participate in a responsible transition to a lower-carbon future,” McLennan said.
Recently, we have received many calls from members that have had phone calls from someone claiming to be from North Star, telling them their bill is past due and they need to make payment immediately or their power will be turned off. THIS IS A SCAM! Scammers typically stress the need for members to act quickly. We strongly urge members to protect themselves and just hang up. If you receive such a call, do not give out any personal or financial information!
By Jim Matheson and Mac McLennan
Dozens of states in the most powerful nation in the world may struggle to keep the lights on this summer.
It doesn’t have to be this way. But absent a shift in policy and coordination between federal and state governments, this is the energy reality our nation will face for years to come.
Reliable electricity has been a staple in America for more than half a century. But that’s no longer a certainty. Organizations across the nation have sounded the alarm: reliable electricity may be in jeopardy this summer. That’s inexcusable.
Minnkota Power Cooperative utilizes a diverse mix of coal, wind and hydro resources to meet the 24/7 needs of electricity consumers in eastern North Dakota and northwestern Minnesota. While this power portfolio is strong, Minnkota does not operate on the electric grid alone. Utilities across the Upper Midwest and down to Louisiana are interconnected through the larger Midcontinent Independent System Operator (MISO) grid. Challenges in other areas of this system can and do have impacts on Minnkota and its members.
MISO expects to face a high risk of reliability challenges during both “normal and extreme conditions.” If demand for electricity exceeds the available supply, MISO could implement controlled power outages to avoid catastrophic damage to the power grid.
Some are quick to blame these newfound reliability threats on changing or more extreme weather patterns. That’s part of the story, but there’s a deeper problem that must be acknowledged.
Spurred by policy and market factors, the ongoing energy transition has prioritized premature baseload coal and nuclear plant closures without considering the collective impact on the power grid and the availability of feasible technology to fully replace them. That’s proving to be a dangerous misstep.
In MISO alone, 3,200 megawatts of electric generating capacity have shut down in the past year. That’s enough to keep the lights on in 2.8 million homes. And electricity demand is forecast to rise by nearly 2% this summer.
To put it simply, new power-generating projects in some of the largest electricity markets haven’t caught up with plant closures—jeopardizing reliability in the process.
Policymakers should recalibrate their focus on a common-sense energy transition that doesn’t risk reliability or punish low-income families and our economy. Those choices don’t need to be at odds.
Driven by a focus on keeping the lights on, America’s electric cooperatives have demonstrated what a responsible energy transition can look like. Electric co-ops substantially lowered their carbon emissions by 23% between 2005 and 2020, the equivalent of taking nearly 9 million cars off the road. They’ve also invested in energy innovation technologies to help meet tomorrow’s electricity needs with speed and flexibility.
In Minnkota’s case, approximately 42% of its generation capacity is already derived from carbon-free resources. The cooperative is also working to advance Project Tundra – an effort to build one of the world’s largest carbon capture systems at a coal-based power plant in North Dakota. If the proposed project moves ahead, it would help retain a reliable and resilient power generator, while also significantly reducing Minnkota’s carbon emissions.
The energy transition must consider threats to reliability and focus on the importance of allowing adequate time, technology development and the construction of desperately needed transmission lines to move electricity within regional markets. It is overambitious to believe this can happen by the current federal target of 2035.
Today’s energy policy decisions will determine whether the threat of grid reliability challenges is our new energy reality. As state and federal policymakers re-evaluate their energy transition proposals in the wake of sobering summer reliability challenges, they should:
When you find yourself in a hole, the first thing to do is stop digging. Failure is not an acceptable option for the consumers and communities we serve.
Jim Matheson is CEO of the National Rural Electric Cooperative Association, the national trade association that represents the nation’s more than 900 not-for-profit, consumer-owned electric cooperatives. He previously served seven terms as a U.S. representative from Utah.
Mac McLennan is CEO of Minnkota Power Cooperative, the wholesale electricity provider for 11 member cooperatives in eastern North Dakota and northwestern Minnesota.
As summer officially begins, Minnkota remains ready to work with its members to navigate potential grid reliability challenges. Minnkota has expressed longstanding concerns about the need for the industry to prioritize reliability throughout the energy transition. Hear more from Mac McLennan, Minnkota president and CEO, about the current state of the grid and how Minnkota fits into the larger MISO system.
Are you interested in serving as a director on the North Star Electric Cooperative Board for your district? District elections will be held for districts 2, 3, and 7 at this year’s annual meeting. The elections for districts 2 and 3 are for four-year terms, and the election for district 7 is for one year. (The normal four-year term election for district 7 will be held in October 2023.) Director candidate materials are available by contacting our Baudette office at 218-634-2202.
North Dakota, Minnesota at risk of power outages this summer
America’s electric grid has become increasingly unstable – and it could begin impacting Minnkota Power Cooperative’s members this summer.
That’s why Minnkota and North Star Electric are joining many of our nation’s grid operators and regulators in sounding the alarm on the vulnerabilities that are affecting power reliability. As the pace of change in the energy industry continues to accelerate, so does the risk of rotating power outages and other extended service interruptions. Minnkota’s eastern North Dakota and northwestern Minnesota service area is no longer immune to the large-scale grid challenges that have been experienced in Texas and California in recent years.
As North Star’s wholesale power provider, Minnkota takes its responsibility to provide reliable, resilient and responsible electricity seriously. The cooperative has more than enough generating capacity to meet the demands of its members through its coal, wind and hydro resources. But Minnkota does not operate on the grid alone. Utilities across the Upper Midwest are connected through Midcontinent Independent System Operator (MISO). Emergency events experienced in other parts of the MISO region can and do have impacts back into the Minnkota system.
One of the most significant industry issues is the retirement of baseload and dispatchable power plants – including coal, nuclear and natural gas – without adequate replacements. Wind and solar make up the majority of the new resources being added to the grid, but they are limited by the fact that they are only able to operate intermittently – when the wind is blowing or the sun is shining. While Minnkota supports moving toward a cleaner, more sustainable energy future, it is not something that can happen with the flip of the switch. It will take decades of planning and unprecedented technology development to achieve significant carbon reduction.
MISO expresses concerns
Minnkota is not alone in coming to these conclusions. MISO issued a dire warning in April that it does not have enough reliable power plant capacity on its system to meet its projected peak demand this summer. The result is an increasing risk of power outage events.
Minnkota both buys and sells surplus power in the MISO system, which estimates a 1,230-megawatt (MW) shortfall in power plant capacity to meet its reserve margin. For context, one megawatt-hour (MWh) is enough electricity to serve more than 800 homes with an hour’s worth of power.
“Due in large part to decarbonization goals set by our members and the states in our region, our resource fleet is increasingly reliant on intermittent and weather-dependent resources,” said Wayne Schug, vice president of strategy and business development at MISO. “As this trend continues in the future, MISO needs to evolve the grid, our markets, and our operational capabilities, which is just as complex as it sounds.”
In a recent interview in the Wall Street Journal, MISO CEO John Bear added to this point by saying, “As we move forward, we need to know that when you put a solar panel or a wind turbine up, it’s not the same as a thermal resource.”
MISO’s peak demand for electricity typically occurs in the summer months during the hottest days of the year. The organization is conducting training and exercises to prepare for worst-case scenarios and is also implementing lessons learned and best practices. Likewise, Minnkota’s energy marketing team is working to ensure it’s ready to respond to volatile market and reliability conditions.
NERC issues grim report
The North American Electric Reliability Corporation (NERC) – the federal regulatory entity responsible for the reliability of the nation’s electric grid – is also expressing concerns heading into the summer season. According to NERC, MISO is in the “high risk” category, and has the potential of “facing capacity shortfalls in its north and central areas during both normal and extreme conditions due to generator retirements and increased demand.”
NERC’s Summer Reliability Assessment notes that reliability challenges are being compounded by evolving demands on the power grid, which has grown increasingly complex as renewable energy assets are added.
“There’s clear, objective, inclusive data indicating that the pace of our grid transformation is a bit out of sync with the underlying realities and the physics of the system,” said John Moura, NERC’s director of reliability assessment.
Along with the changing power supply mix, NERC also identified extreme weather conditions, high seasonal demand for electricity, supply chain issues and cybersecurity threats as other risks impacting reliability.
What is Minnkota doing?
While there are challenges, Minnkota supports efforts to reimagine how electricity can be produced, delivered and consumed. But the implementation of these ideas must be met with caution and common sense. After all, there is a lot on the line. A resilient and reliable electric grid that affordably keeps the lights on is the cornerstone of the American economy and our national security. Any missteps in an energy transition of this magnitude can have irreversible consequences.
So, what can be done? Minnkota is only one of thousands of utilities across the country, but it is taking its own steps to protect itself from power reliability challenges.
Minnkota’s energy portfolio consists of a diverse mix of coal, wind and hydro resources. Working together, these facilities help ensure 24/7 reliability on the Minnkota system. Coal-based facilities remain the workhorse of the system and are routinely available to produce power during the vast majority of each year.
May 31, 2022 – **UPDATE** We have been answering lots of questions from members, who are asking if we plan to cut their power due to the flooding on area lakes and waterways. We do not plan to cut any power at this time. Our equipment can withstand submersion in water, but if there is an outage situation that involves equipment that is under water, power will likely need to remain out until water recedes and the equipment is accessible again.
May 21, 2022 – We’ve been fielding questions recently from members concerned about our electric equipment being under water in flooded areas. Our equipment can withstand submersion in water, but if an abnormal outage situation occurs, please be aware power may not be able to be restored until water levels recede. If you have any questions, please reach out to either the Littlefork office at 218-278-6658 or the Baudette office at 218-634-2202.
