Energy Transition in Rural America (May 2022) - East River Electric
By Joshua Anderson
The fifth and last destination for day 1 of our ‘Energy Transition’ trip ended in Brookings, South Dakota, where our class visited East River electric cooperative for dinner and a presentation. The presentation was led by Chief Member and Public Relations Officer, Chris Studer, but we were also joined by other East River staff, including Jeff Nelson (former General Manager), Jeff Rud (Power Supply Specialist), and Anne Hall (Executive Assistant). Our arrival at 7pm capped off an already long 12-hour day full of site visits and travel. Even though some of us were groggy, we learned a lot about the transmission side of multi-tiered cooperative structures and helped synthesize much of what we had already learned in our class about electric cooperatives.
Our arrival coincided with a powerful storm that had passed through much of South Dakota, including Brookings, just four days previous. We were able to see the physical impact around town from toppled trees to damaged buildings and electric line poles. Chris informed us at the start of the presentation that over 20 percent of East River’s 252 substations went out (tripped off), due to the storm. But, by Sunday afternoon they had all been energized due to the diligent and hard work of the East River team. Chris reminded us that “East River Electric Cooperative exists to enhance the value of its members.” The transmission system represents the backbone of the electric grid, which hauls power from large generating sources across long distances via massive 345kV and 230kV electric lines. These feed substations that step down voltage to 115kV and 69kV lines that East River owns that are vital for the lights to stay on. Distribution co-ops rely on transmission to power their communities. Covering over 40,000 square miles and over 3,000 miles in transmission lines, the 150 employees of East River carry with them great responsibility.
East River purchases its power through two long-term contracts. It receives about 17% of its power from the Western Area Power Administration (WAPA) in a contract through 2050, which produces power from dams along the Missouri River and other part of the Western U.S. The other 83% of its power is purchased in a long-term contract with Basin Electric through 2075. The generation mix, even just in the last decade, has changed substantially. Compared to 2013, in 2021 the share of coal generation in Basin’s mix decreased from ~60% to 40% (even though net production remained constant), while the share of wind generation increased from ~12% to 30%. The percentage of hydro has remained flat at just under 20%; the share of natural gas increased from ~3% to 10%, and a relatively smaller fraction of renewables has come online (~1.2%); over this period a small amount of nuclear generation has been removed from Basin’s power mix. This rapidly shifting generation mix has paired with rapid load growth that more than doubled East River’s peak demand since 2001 from ~325MW to 725MW.
Image courtesy of Basin Electric.
As East River grows, finding opportunities to incorporate renewables other than wind onto the system, like solar, are on the minds of the cooperative. However, East River staff mentioned things like the ongoing Auxin solar tariff, economies of scale, the current state of storage technology, and long-term contracts as barriers for solar development. When aggregated, distributed renewable technologies can add value to the wholesale market in SPP, although formal rules for distributed energy resource aggregation are still being developed through FERC Order 2222. Aggregation of renewables, demand response, and storage technologies could become robust enough to provide reliable energy needs, making many distributed technologies more attractive assets for a large transmission cooperative like East River.
Load management was another focus of the East River presentation. Load management can be thought of as a distributed energy/storage-like resource that is available at East River’s disposal. By curtailing/controlling when some appliances (e.g., irrigation equipment, diesel generators, water heaters, and air conditioners) are used by end users, East River can reliably cutback on its power supply peak demand (about 111 MW less in summer, and 77 MW less in winter), which in turn reduces its monthly demand charge from Basin. The demand charge applied to East River takes the single highest 30-minute interval peak at any point throughout the month, charges a per kW demand rate, which is then distributed proportionally to East River’s distribution cooperatives based on their usage during that 30-minute period. So, by investing in load management programs, East River saves millions in demand charges, makes their operations more efficient, and helps keep the costs low for members. Water heaters were described as the “bread and butter” of this program because they are relatively easy to monitor and are used year-round.
East River is also involved in economic development through their Rural Electric Economic Development (REED) Fund program, which was highlighted in their presentation. All East River’s members are involved and contribute to this fund, providing low-interest loans to local businesses to help “fill the gap” in their business development efforts. From recreation and arts to health care, education, and agriculture, the REED Fund has invested over $110 million in loans, which has in turn brought in $903 million in outside investment. Leveraging $9 for every $1 invested in the local economy shows just how powerful the electric cooperative model can be for economic development and the opportunities that become available from a responsibly and equitably managed power grid.
East River was kind enough to host us again for breakfast the next morning. We were joined by even more East River staff and continued what was already an enlightening conversation from the night before. One of the most interesting takeaways from that conversation, was the importance of equitable lease agreements, from the developer-landowner perspective, on the continued success of renewable energy deployment. Today, some landowners in the East River region are skeptical of leasing land for solar investments due to some unfair and discriminatory practices by wind developers that began in the 1990s.
After breakfast, we were taken on a tour of East River’s control room headquarters, just across the street from their main building. There, we learned a lot about East River’s role as a transmission cooperative between its power suppliers (Basin Electric Power Cooperative and WAPA) and its distributions co-ops. Seeing East River’s role within the Southwest Power Pool (SPP) market, helped us understand just how complex the process is to manage the electric grid. We learned about the value of capacity, its variability and impact on distribution co-ops in the wholesale market, and how aggregated wholesale planning for distributed energy resources via FERC Order No. 2222 could be a gamechanger for East River and other cooperatives to deploy more renewables. Conversations like these, when paired with the rest of our trip (like our visit to Basin Electric cooperative on Friday) really helped synthesize and drive-home important energy policy lessons that had previously remained elusive in the confines of a classroom.