What's New
"Powering Our Future"
Providing electricity in today's environment has opportunities and challenges. That was the message delivered to more than 800 delegates and guests at Basin Electric's 2005 annual meeting held Nov. 2-3, in Bismarck. The theme of this year's meeting was "Powering our Future."
Dr. Robert Peltier, editor-in-chief of Platts Power Magazine, was the featured speaker on Wednesday at the annual meeting. Peltier spoke of key issues facing the U.S. power industry, with the aging workforce being a primary concern. "This is a systematic problem. Thirty percent of the power industry workforce is over 50 years old, and will be gone in 10 years," Peltier said. Other trends in the utility industry, according to Peltier, include a movement toward nuclear-based power plants, clean coal technology and integrated gasification combine cycle (IGCC) based plants.
"The United States is the OPEC of coal. More than 50 percent of our electricity in the United States is powered by coal." He also noted the comeback of large base-load power plants with long-term power supply contracts, as the industry moves away from merchant power plants. "Lenders are not going to supply big power plants without long-term contracts," he said.
Peltier said the Environmental Protection Agency's failure to get regulations out in a timely, consistent matter has fractured the utility industry. However, "Our future is brighter than ever. None of the issues we are facing are technologically impossible. Clean coal technology, IGCC and nuclear have provided a thick layer of insulation against future uncertainties."
Peltier's visit to North Dakota included a tour of Dakota Gasification Company's Great Plains Synfuels Plant, which he characterized as a national treasure. "You have a real gem here in North Dakota," he said.
Highlighting the staff reports, Ron Harper, Basin Electric CEO and general manager, said Basin Electric is in a construction mode. "Our membership is growing - our region is growing - we must grow to meet the demands (for electricity). We build (power) plants because our members need the power," he said.
Harper pointed out that Basin Electric's power requirement projections show a demand for electricity growing at a rate of 3.1 percent between now and 2019. "That growth equals the need for 927 megawatts of generating capacity to meet that member demand," he said.
Fortunately, Harper said there's a continuing strong recognition of the benefits of coal as a generation fuel by policy makers and those who believe low-cost and reliable energy is important.
Looking to the energy future, Harper said that coal gasification will be a part of it. "A great deal of the energy bill is focused on gasification and its benefits for the continued use of coal."
President Wayne Child said that Basin Electric's directors and management are seeing more complexity in the wholesale generation and transmission business. He told the membership that Basin Electric has evolved into a major player in the Upper Midwest's wholesale electric economy and that the cooperative way of doing business and self-governance is being challenged by the investor-owned-dominated marketplace and regulators. "What we have done together these past 45 years is build a first-class business that serves all of us," he said.
GENERATION REPORT
Wayne Backman, senior vice president of Generation, described the actions Basin Electric is taking to power its future. The cooperative's membership is growing, while surplus power is diminishing. Future load projections call for additional generating capacity, and Basin Electric is taking several steps to accomplish this. Projects under way include the 22-MW Northern Border Waste Heat Recovery Project under construction in North Dakota and South Dakota; the Groton Generation Station, a 95-MW gas-fired turbine being built in South Dakota; the Wilton Wind Farm in North Dakota; and the Dry Fork Station, Basin Electric's newest coal-based power plant under development in Wyoming. The 375-MW plant is scheduled for completion in January of 2011. Backman also updated the membership on the activities of the resource coalition formed to investigate the options for another coal-based power plant in North Dakota, South Dakota or Iowa. Coalition members include Montana Dakota Utilities Co, Heartland Consumers Power District, Minnkota Power Cooperative, Xcel Energy and Missouri River Energy Services. Fuel supply and rail transportation options are currently being studied. A transmission study has been completed and is currently under analysis. Other major issues to be addressed will include water supply and an air permit.
TRANSMISSION REPORT
Mike Risan, senior vice president of Transmission, reported that in September, the Basin Electric board of directors authorized the Cooperative to join the Midwest Independent System Operator, or MISO, as a non-transmission-owning member. "Joining with a non-transmission status allows us to learn more about MISO, to have a voice, and to vote without transferring operational control of our transmission or generation facilities to MISO. This action will also be a valuable learning experience as we continue to evaluate the pros and cons of full membership within MISO," he said. "As I reported last year, Basin Electric has not joined an RTO (regional transmission organization) and will not join an RTO unless the benefits of joining exceed the costs of not joining."
FINANCIAL REPORT
The financial condition of Basin Electric was jointly reviewed by Buzz Hudgins, the Cooperative's chief financial officer, and Kermit Pearson, treasurer of the board of directors. Their collective message was that Basin Electric is in a strong financial position and well prepared financially for an exciting and challenging future.
Pearson said Basin Electric is entering a new era of prolonged construction, requiring large sums of capital and increased business risk that will have an impact on wholesale rates.
But expected revenues from Dakota Gasification Company, a Basin Electric subsidiary, may become a valuable asset in tempering rate impacts, Hudgins reported. If that occurs, Pearson said any profitability from DGC will be used to benefit Basin Electric�s members.
SUBSIDIARY REPORTS
Al Lukes, Dakota Gasification Company (DGC) chief operating officer said that despite some technical problems early in the year, things are looking good in 2005. Year-end financial projections are forecasting nearly $60 million in profits.
"This will be the largest margin DGC turned out in its more than 20-plus years of operation," he said. "And if prices stay anywhere near where the experts predict, the member-owners of Basin Electric can expect to see some continued good things for years to come."
Lukes said DGC has long been recognized as being a valuable asset for Basin Electric, but the period ahead looks especially bright. "As Basin Electric enters another period of capacity expansion, DGC appears poised to provide significant value to the Cooperative. We�re pleased to be there and help where we can."
Dakota Coal Company chief operating officer, Bob Bartosh, reported on the continued efforts of this Basin Electric subsidiary to be an efficient fuel supplier. Dakota Coal purchases lignite coal from The Coteau Properties Company Freedom Mine and supplies it to the Antelope Valley Station, Leland Olds Station and the Great Plains Synfuels Plant. Bartosh reported that the Freedom Mine, Wyoming Lime Producers and Montana Limestone Company have been working to grow their operations in supporting Basin Electric. Some of the objectives Dakota Coal has focused on to accomplish this task include expanding the mining operations of lignite coal at the Freedom Mine with two new areas under development, construction of larger capacity equipment at Wyoming Lime and the addition of more than 200 acres to the limestone mining operations at Montana Limestone. Bartosh also applauded the safety achievements of all three facilities.
DIRECTOR ELECTIONS
Four Basin Electric directors were re-elected at the annual meeting. Those re-elected were: Gary Drost, representing L&O Power Cooperative, Rock Rapids, Iowa; Don Applegate, representing Northwest Iowa Power Cooperative, LeMars; Roberta Rohrer, representing Central Montana Electric Power Cooperative, Great Falls; and Reuben Ritthaler, representing Powder River Energy Corporation, Sundance, Wyo.
CONGRESSIONAL REPORTS
Also joining the annual meeting were two of North Dakota's congressmen, Sen. Byron Dorgan, Rep. Earl Pomeroy and South Dakota Gov. Mike Rounds. Dorgan and Pomeroy spoke to the annual meeting via satellite from their Washington, D.C. offices. They covered issues relating to the recently passed energy bill and their support for continued renewable energy development. Both Dorgan and Pomeroy commended Basin Electric for its leadership in bringing wind energy to the Dakotas and ongoing efforts to support other renewable generating projects.
They applauded Basin Electric's membership for considering a resolution that calls for obtaining renewable resources by 2010 that will be equal to 10 percent of the generating capacity needed to meet its member demand. The resolution was later adopted by the membership at the meeting.
Gov. Rounds applauded rural electric cooperatives for being a strong force in many of the state's communities. He emphasized his state's commitment to renewable resources and is proud of the ethanol and wind development taking place in South Dakota as it is currently the fourth largest exporter of ethanol in the nation.
He also pledged his support and willingness to help the resource coalition (it is mentioned in the Generation Report) develop a coal-based power plant. "We want it in South Dakota," he said.
Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck. It generates and transmits electricity to 121 member rural electric systems in nine states: Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming. These member systems distribute electricity to about 1.8 million consumers.
Basin Electric's generating resources include: two coal-based power plants in North Dakota - the Antelope Valley Station, Beulah, and the Leland Olds Station, Stanton; a coal-based power plant in Wyoming - the Laramie River Station, Wheatland; two peaking stations - the Spirit Mound Station, Vermillion, S.D.; and the Wisdom Unit 2 Station, Spencer, Iowa; nine combustion-turbine generators (natural gas) in the Gillette, Wyo., area; four wind turbines - two near Minot, N.D., and two near Chamberlain, S.D.; and two 40-megawatt capacity wind farms owned and operated by FPL Energy, Juno Beach, Fla. Basin Electric purchases the production from them. One is located near Edgeley/Kulm, N.D.; the other is near Highmore, S.D.
________________________________________
For more information on items in the What's New section contact:
Ann M. Foster
Director of Communications
515.727.8945 or afoster@iowarec.org
Dr. Robert Peltier, editor-in-chief of Platts Power Magazine, was the featured speaker on Wednesday at the annual meeting. Peltier spoke of key issues facing the U.S. power industry, with the aging workforce being a primary concern. "This is a systematic problem. Thirty percent of the power industry workforce is over 50 years old, and will be gone in 10 years," Peltier said. Other trends in the utility industry, according to Peltier, include a movement toward nuclear-based power plants, clean coal technology and integrated gasification combine cycle (IGCC) based plants.
"The United States is the OPEC of coal. More than 50 percent of our electricity in the United States is powered by coal." He also noted the comeback of large base-load power plants with long-term power supply contracts, as the industry moves away from merchant power plants. "Lenders are not going to supply big power plants without long-term contracts," he said.
Peltier said the Environmental Protection Agency's failure to get regulations out in a timely, consistent matter has fractured the utility industry. However, "Our future is brighter than ever. None of the issues we are facing are technologically impossible. Clean coal technology, IGCC and nuclear have provided a thick layer of insulation against future uncertainties."
Peltier's visit to North Dakota included a tour of Dakota Gasification Company's Great Plains Synfuels Plant, which he characterized as a national treasure. "You have a real gem here in North Dakota," he said.
Highlighting the staff reports, Ron Harper, Basin Electric CEO and general manager, said Basin Electric is in a construction mode. "Our membership is growing - our region is growing - we must grow to meet the demands (for electricity). We build (power) plants because our members need the power," he said.
Harper pointed out that Basin Electric's power requirement projections show a demand for electricity growing at a rate of 3.1 percent between now and 2019. "That growth equals the need for 927 megawatts of generating capacity to meet that member demand," he said.
Fortunately, Harper said there's a continuing strong recognition of the benefits of coal as a generation fuel by policy makers and those who believe low-cost and reliable energy is important.
Looking to the energy future, Harper said that coal gasification will be a part of it. "A great deal of the energy bill is focused on gasification and its benefits for the continued use of coal."
President Wayne Child said that Basin Electric's directors and management are seeing more complexity in the wholesale generation and transmission business. He told the membership that Basin Electric has evolved into a major player in the Upper Midwest's wholesale electric economy and that the cooperative way of doing business and self-governance is being challenged by the investor-owned-dominated marketplace and regulators. "What we have done together these past 45 years is build a first-class business that serves all of us," he said.
GENERATION REPORT
Wayne Backman, senior vice president of Generation, described the actions Basin Electric is taking to power its future. The cooperative's membership is growing, while surplus power is diminishing. Future load projections call for additional generating capacity, and Basin Electric is taking several steps to accomplish this. Projects under way include the 22-MW Northern Border Waste Heat Recovery Project under construction in North Dakota and South Dakota; the Groton Generation Station, a 95-MW gas-fired turbine being built in South Dakota; the Wilton Wind Farm in North Dakota; and the Dry Fork Station, Basin Electric's newest coal-based power plant under development in Wyoming. The 375-MW plant is scheduled for completion in January of 2011. Backman also updated the membership on the activities of the resource coalition formed to investigate the options for another coal-based power plant in North Dakota, South Dakota or Iowa. Coalition members include Montana Dakota Utilities Co, Heartland Consumers Power District, Minnkota Power Cooperative, Xcel Energy and Missouri River Energy Services. Fuel supply and rail transportation options are currently being studied. A transmission study has been completed and is currently under analysis. Other major issues to be addressed will include water supply and an air permit.
TRANSMISSION REPORT
Mike Risan, senior vice president of Transmission, reported that in September, the Basin Electric board of directors authorized the Cooperative to join the Midwest Independent System Operator, or MISO, as a non-transmission-owning member. "Joining with a non-transmission status allows us to learn more about MISO, to have a voice, and to vote without transferring operational control of our transmission or generation facilities to MISO. This action will also be a valuable learning experience as we continue to evaluate the pros and cons of full membership within MISO," he said. "As I reported last year, Basin Electric has not joined an RTO (regional transmission organization) and will not join an RTO unless the benefits of joining exceed the costs of not joining."
FINANCIAL REPORT
The financial condition of Basin Electric was jointly reviewed by Buzz Hudgins, the Cooperative's chief financial officer, and Kermit Pearson, treasurer of the board of directors. Their collective message was that Basin Electric is in a strong financial position and well prepared financially for an exciting and challenging future.
Pearson said Basin Electric is entering a new era of prolonged construction, requiring large sums of capital and increased business risk that will have an impact on wholesale rates.
But expected revenues from Dakota Gasification Company, a Basin Electric subsidiary, may become a valuable asset in tempering rate impacts, Hudgins reported. If that occurs, Pearson said any profitability from DGC will be used to benefit Basin Electric�s members.
SUBSIDIARY REPORTS
Al Lukes, Dakota Gasification Company (DGC) chief operating officer said that despite some technical problems early in the year, things are looking good in 2005. Year-end financial projections are forecasting nearly $60 million in profits.
"This will be the largest margin DGC turned out in its more than 20-plus years of operation," he said. "And if prices stay anywhere near where the experts predict, the member-owners of Basin Electric can expect to see some continued good things for years to come."
Lukes said DGC has long been recognized as being a valuable asset for Basin Electric, but the period ahead looks especially bright. "As Basin Electric enters another period of capacity expansion, DGC appears poised to provide significant value to the Cooperative. We�re pleased to be there and help where we can."
Dakota Coal Company chief operating officer, Bob Bartosh, reported on the continued efforts of this Basin Electric subsidiary to be an efficient fuel supplier. Dakota Coal purchases lignite coal from The Coteau Properties Company Freedom Mine and supplies it to the Antelope Valley Station, Leland Olds Station and the Great Plains Synfuels Plant. Bartosh reported that the Freedom Mine, Wyoming Lime Producers and Montana Limestone Company have been working to grow their operations in supporting Basin Electric. Some of the objectives Dakota Coal has focused on to accomplish this task include expanding the mining operations of lignite coal at the Freedom Mine with two new areas under development, construction of larger capacity equipment at Wyoming Lime and the addition of more than 200 acres to the limestone mining operations at Montana Limestone. Bartosh also applauded the safety achievements of all three facilities.
DIRECTOR ELECTIONS
Four Basin Electric directors were re-elected at the annual meeting. Those re-elected were: Gary Drost, representing L&O Power Cooperative, Rock Rapids, Iowa; Don Applegate, representing Northwest Iowa Power Cooperative, LeMars; Roberta Rohrer, representing Central Montana Electric Power Cooperative, Great Falls; and Reuben Ritthaler, representing Powder River Energy Corporation, Sundance, Wyo.
CONGRESSIONAL REPORTS
Also joining the annual meeting were two of North Dakota's congressmen, Sen. Byron Dorgan, Rep. Earl Pomeroy and South Dakota Gov. Mike Rounds. Dorgan and Pomeroy spoke to the annual meeting via satellite from their Washington, D.C. offices. They covered issues relating to the recently passed energy bill and their support for continued renewable energy development. Both Dorgan and Pomeroy commended Basin Electric for its leadership in bringing wind energy to the Dakotas and ongoing efforts to support other renewable generating projects.
They applauded Basin Electric's membership for considering a resolution that calls for obtaining renewable resources by 2010 that will be equal to 10 percent of the generating capacity needed to meet its member demand. The resolution was later adopted by the membership at the meeting.
Gov. Rounds applauded rural electric cooperatives for being a strong force in many of the state's communities. He emphasized his state's commitment to renewable resources and is proud of the ethanol and wind development taking place in South Dakota as it is currently the fourth largest exporter of ethanol in the nation.
He also pledged his support and willingness to help the resource coalition (it is mentioned in the Generation Report) develop a coal-based power plant. "We want it in South Dakota," he said.
Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck. It generates and transmits electricity to 121 member rural electric systems in nine states: Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming. These member systems distribute electricity to about 1.8 million consumers.
Basin Electric's generating resources include: two coal-based power plants in North Dakota - the Antelope Valley Station, Beulah, and the Leland Olds Station, Stanton; a coal-based power plant in Wyoming - the Laramie River Station, Wheatland; two peaking stations - the Spirit Mound Station, Vermillion, S.D.; and the Wisdom Unit 2 Station, Spencer, Iowa; nine combustion-turbine generators (natural gas) in the Gillette, Wyo., area; four wind turbines - two near Minot, N.D., and two near Chamberlain, S.D.; and two 40-megawatt capacity wind farms owned and operated by FPL Energy, Juno Beach, Fla. Basin Electric purchases the production from them. One is located near Edgeley/Kulm, N.D.; the other is near Highmore, S.D.
________________________________________
For more information on items in the What's New section contact:
Ann M. Foster
Director of Communications
515.727.8945 or afoster@iowarec.org
See all of "What's New"