John Wipf, left, of the Oak Lane Hutterite Colony and Loren Noess, right, general manager of Central Electric Cooperative in South Dakota. Photo by Adam Jahiel.

One G&T “family” finds distributed generation projects play a big role in meeting short-term power supply needs, driving local economic development, and boosting clean and renewable energy sources

When Jeff Nelson, general manager of East River Electric Power Cooperative, a Madison, S.D.-based generation and transmission (G&T) co-op, talks about 167 MW of distributed generation added to his system during the past year, his voice betrays an unmistakable note of paternal pride. “Don’t you love it when plans come together?” he asks.

Actually, the power he’s talking about belongs to Basin Electric Power Cooperative, the “super G&T” in Bismarck, N.D., that serves 120 co-ops in nine states, including wholesale power suppliers like East River Electric Power. But many of the distributed generation projects—ranging from waste-heat recovery to methane digesters to wind energy—could not have happened without assistance from East River Electric Power and its 20 member distribution co-ops in South Dakota and western Minnesota.

The bump in new capacity, the largest for Basin Electric Power in 20 years, marks a shift in the G&T’s supply planning—from reliance on a handful of large, centralized power plants to numerous energy resources secured with a range of development partners. “Through these new distributed generation projects, a great network has developed, including various G&Ts and local distribution co-ops working together to redefine our energy choices for the future,” Nelson relates.

The diversification also includes freeing up some generating capacity that Basin Electric Power has sold to non-members, upgrading a conventional turbine, and starting work on at least two new coal-fired power plants.

" Through these new distributed generation projects, a great network has developed, including various G&Ts and local distribution co-ops working together to redefine our energy choices for the future…. These systems will intermittently add low-cost energy to the grid—for example, when wind turbines are running…. And getting them built helps drive local economic development. " — Jeff Nelson, general manager of East River Electric Power Cooperative

“Baseload coal will remain the workhorse in Basin’s energy mix,” Nelson offers. “Each of the two new plants would provide at least 400 megawatts of highly reliable capacity. Even counting the cost of emissions-control technologies, coal promises to be a least-cost resource for the region, second only to federal hydropower.”

But distributed generation will play a big role, too, in helping meet short-term needs. “These systems will intermittently add low-cost energy to the grid—for example, when wind turbines are running,” Nelson adds. “And getting them built helps drive local economic development.”

In addition, the distributed generation helps Basin Electric Power achieve its goal of meeting at least 10 percent of its peak demand power requirements from clean and renewable energy sources by 2010. The G&T has already reached the 8 percent milestone.

According to Ron Rebenitsch, Basin Electric Power manager of member marketing, it takes an unprecedented degree of cooperation among member co-ops and others to make such energy projects happen. “East River Electric has been a leader for this kind of cooperation, but we see it throughout our membership.”

Basin Electric Power and its members have also developed a fairly successful approach to equitably addressing the issue of consumer self-generation. If a consumer wants to interconnect generation equipment greater than 150 kW, Basin Electric Power will—through the member co-op—buy 100 percent of the electricity at wholesale market rates. In turn, the consumer continues to purchase all power needs from the local co-op. Below the 150-kW threshold, depending on local co-op policies, consumers may use small generators to offset their electric use, selling any excess energy to the local co-op which then resells it to Basin Electric Power.

 

Wind works  
East River Electric Power’s first renewable energy experience dates back to 2000. Wind energy had created a swirl of excitement among farmers from western Minnesota through eastern South Dakota. Loren Noess, a member of the Touchstone Energy® Board of Directors who manages Central Electric Cooperative in Mitchell, S.D., recalls how “East River just took the bull by the horns,” and started to investigate possible sites for wind demonstration.

Noess worked with Jim Edwards, East River Electric Power operations manager, as they honed in on a spot that Central Electric serves, near Chamberlain, S.D. Rebenitsch says his first goal was simply to respond to the East River Electric Power wind power request. “I took a look at the technical requirements and the economics,” he recounts. “Considering the cost and all the risks involved with a first-time project, it would have been hard for Basin to justify buying a single wind turbine.”

After consultation, a reasonable alternative soon took shape. The wind project grew to two, 1.3-MW turbines in Chamberlain, with plans to add two more turbines the following year near Minot, N.D. The South Dakota G&T agreed to pick up about half the cost for the project at Chamberlain. Central Electric added substation improvements to support the interconnection.

“If East River and its members weren’t willing to shoulder some of the risk, we couldn’t have done the project in that time,” Rebenitsch concedes.

When completed in early 2002, the wind farm became the first of its type financed by the federal Rural Utilities Service. Noess reports that visitors still pull off of I-90 and drive up to Chamberlain to get a close-up look at the giant towers and slowly spinning blades.

East River Electric Power felt good enough about the experience to build a transmission line interconnection that lassoed a 40-MW, 27-turbine wind project (owned by investor-owned utility FPL Energy) near Highmore, S.D., to the grid. Basin Electric Power buys all of the output from the Highmore wind farm as well as from 66 other commercial-sized wind turbines, rated at 136 MW combined—enough to power 40,000 average homes each year.

Rebenitsch explains Basin Electric Power’s practical, responsive approach to wind and other distributed energy projects with a turn of a phrase from the movie Field of Dreams: “If they come, we will build it,” he quips.

 

Cow power  
For years, East River Electric Power prepared for the day when a co-op consumer inquired about putting in a methane digester. Most digesters are designed to help large livestock operations manage odor and waste problems. When manure breaks down in a closed environment—especially in a heated slurry full of healthy microbes—the byproducts include clean, odorless solids that can be reused as animal bedding, gray water that can be recycled or used as fertilizer, and biogas that can be burned to generate heat and electricity.

So when the Midwest Dairy Institute, served by Whetstone Valley Electric Cooperative in Milbank, S.D., took an interest in building a methane digester in 2001, the G&T was ready. The institute ran a 2,400-head milking operation and wanted an active digester to educate livestock farmers across the region. Steve Ahles, general manager of Whetstone Valley Electric, turned to Jeff Rud, East River power supply specialist, for support. Rud serves as a key accounts manager and ad hoc distributed generation expert.

The Dairy Institute’s digester fuels a 375-kW generator—hardly a blip on Basin Electric Power’s energy-supply radar screen. “But the Dairy Institute gets a better rate by maintaining its relationship as a full-time energy consumer, compared to self-generating and buying only standby power,” Rud notes, adding that the system got plenty of help from Whetstone Valley Electric and East River Electric Power with permitting and system engineering.

Edwards sees distributed generation partly as an economic development service. “First, consumers must have a need for the project—in this case, a waste management problem,” he mentions. “We can encourage them to explore a solution, which happens to have an energy byproduct. It’s the combination of benefits that makes the effort of working on small generators worthwhile for all parties involved.”

In another case, East River Electric Power worked with Central Electric on a small wind project that involved helping the Oak Lane Hutterite Colony interconnect two wind turbines, totaling 160 kW. Although small, the project sells energy to Basin Electric Power.

“The economics wouldn’t make sense, except the Hutterites are very resourceful and independent,” comments Noess. “A couple of local technicians bought old turbines, refurbished them, and installed them to co-op specifications. It was a worthwhile community service. You never want to close the door on a customer request.”

 

Gas pumps  
Also last year, some innovative, high-tech generating systems took their place in the Basin Electric Power energy portfolio. Among these, four waste-heat recovery plants appeared, like pearls on a necklace, along the 1,200-mile Northern Border natural gas pipeline. Three of the plants are located in East River Electric Power territory, and the G&T built three substations and 13 miles of new transmission line to support them. The plants take advantage of compressor stations that pressurize the pipeline to keep gas flowing. The compressors run on gas pulled from the pipeline; the operation creates hot, high-pressure exhaust. The heat recovery units tap that exhaust as free energy to power a 5.5-MW turbine-generator at each site.

Implementing this idea required intense cooperation among pipeline operators, utility partners, and Ormat Technologies, a Nevada-based company that supplied state-of-the-art heat recovery equipment. Kip Waddell, a consultant on the project, credits Rebenitsch for his leadership, fostering every aspect of system design and interconnection.

“He even helped to make sure that, while the project saved waste energy, it did not cut revenues for the local distribution co-op; these compressor stations are important loads for some very rural systems,” Waddell remarks.

To Rebenitsch, the project demonstrates resource planning at its best. “In some circles, waste heat may not be called renewable energy, but it has zero emissions and low cost, and it’s ready when we need it,” he indicates. He expects more small generators to spring up along the gas pipeline and at other waste-heat recovery sites throughout the region.

From Nelson’s perspective, the waste-heat projects simply reinvigorated the cooperative spirit. “We’ve set on a course that’s going to bring diversity to our energy system and stronger partnerships with our customers,” he concludes. “The new generation we’ve welcomed serves as a harbinger of more wind, more biomass, more waste-heat recovery, and probably some solar energy projects that are coming, too. Once we’ve proved that a new kind of project is possible, it only gets easier to do the next one.”

Loren Noess, right, general manager of Central Electric Cooperative in South Dakota, meets with John Wipf, treasurer of the Oak Lane Hutterite Colony, near the site of a small wind power project installed by the Hutterites that sells energy to Basin Electric Power Cooperative (G&T).

  Adapted from an article in RE Magazine (May 2007) by Jill Cliburn