Innovation is one of East River Electric’s guiding values. Our employees are challenged to think outside the box of current business practices and explore new solutions that will benefit our industry, always looking through the lens of how those solutions can enhance the value of our member systems. The successes of this approach are visible throughout East River’s history, from launching one of the most successful cooperative load management programs in the country to serving as a driving force behind growing our region’s ethanol industry and more.
In 2018, East River partnered with the National Rural Electric Cooperative Association and Dakota State University on an innovative research and development project to help optimize consumers’ energy usage in their homes using smart home technology. The Connected Home Research Project has been testing smart home technology – from a connected refrigerator and washer and dryer to connected lighting and state-of-the-art home appliances. The expected outcome of this project would help homeowners and their electric cooperative save money and improve their lives.
By working together with their neighboring cooperatives, East River’s members are able to be involved in wider-reaching research and development projects in an effort to continue making innovation a top priority and living up to our guiding values.
Our Power Generation Strategy
Our commitment to innovation includes continuously looking to ensure we have a mix of power resources to serve our membership with reliable and affordable electricity. As a result, we employ an ‘all of the above’ generation strategy. Part of that strategy is using renewable energy. Currently, 37 percent of our cooperative family’s generation mix comes from renewable sources including hydropower and wind, with plans for steady and fiscally responsible growth. That includes buying power from what will be South Dakota’s largest solar farm – the 128 megawatt Wild Springs Solar farm – beginning in 2022. This year, about 20 percent of our energy mix comes from wind resources. Looking back about 10 years ago, just 8 percent of our power supply came from wind. Additionally, the percentage of coal in our power supply sales has dropped 15 percent in the past decade, now making up only about 43 percent.
The need for our ‘all of the above’ approach to supply electricity was highlighted during the record-setting cold period in January 2019 when wind towers in the Dakotas had to be shut down. Weather stations installed on each turbine automatically shut down the wind tower when temperatures drop to 22 degrees Fahrenheit below zero, as the extreme cold puts the components of the wind tower at risk of failure. During that time when wind generation had to shut down, Basin Electric Power Cooperative turned to their reliable natural gas and coal generation as well as market purchases to meet our co-op network’s demand for electricity.
We have a watchful eye on the electric system around the clock making sure your lights come on when you flip the switch, from the coldest days of winter to the hottest days of the summer. We change and adapt in ways that limit risk for our members while taking advantage of new developments in energy production.
Saving Energy and Money
Beyond supplying the region with affordable and reliable electricity, East River and our member systems offer a suite of programs to help consumers save energy and money. Our Renewable Energy Credit, or REC, program entered its fourth year in 2020. Through the REC program, local member-owners can purchase RECs to offset their current energy usage with 100 percent renewable energy and showcase their support for current and future renewable projects.
In conjunction with our members, East River offers a robust residential and commercial energy efficiency rebate and loan program. Our energy efficiency incentives reward members for replacing worn out appliances with energy efficient alternatives and for making other efficiency upgrades in their homes and businesses. Since 2010, East River has awarded more than $4 million in energy efficiency incentives.
Our load management program has saved our members more than $250 million in avoided wholesale power costs since it launched in 1985. Load management is a means of controlling the amount of electricity being used during times of peak demand in our service area. Peak demand is the greatest amount of electricity used at one time by an electric system, normally when a large number of customers are using appliances at the same time. These peaks determine how much we must pay for power. When periods of peak demand occur, load management reduces the demand and lowers the cost to all members. Over 75,500 electric loads in homes, farms and businesses of member consumers throughout eastern South Dakota and western Minnesota currently participate in the program. These loads include electric water heaters, air conditioners, irrigation systems and other big energy users.
Innovation has served as a driving value at East River Electric since our cooperative was formed by our member systems nearly 70 years ago. We have worked alongside our member co-ops for decades to provide an affordable and reliable supply of electricity to their member-owners. That’s one thing that will never change. But how we produce and meet the growing demand for electricity has changed considerably, and it will continue to evolve. Electric co-ops have played a leading role in the country’s energy transformation, and we will continue to lead with the aim of meeting members’ needs in a fiscally responsible manner.
Our region’s electric cooperatives have always worked together for the benefit of all consumers in our area. When there is growth in one area, all of the other cooperatives pool their resources through their membership in the wholesale electric cooperative they created, East River Electric, to help build the necessary infrastructure to serve a new subdivision, business or ethanol plant. They help with the investment and share in the risk even if it isn’t in their cooperative service territory. These cooperatives know that when a new business comes to their area, their fellow co-ops will be there to help build the infrastructure to serve it through their membership in East River Electric. It’s the co-op way; working together for the benefit of all.
Unfortunately, Dakota Energy Cooperative headquartered in Huron, has made its intention known to break the promise they made to their surrounding cooperatives to share in the risk and reward of working together. Dakota Energy filed a lawsuit in November 2020 against its own cooperative, East River Electric, to break the long-term contract they signed in 2015. They intend to purchase power from a for-profit investment firm which operates as an unregulated power broker called Guzman Energy which has no investment in our region.
In the last 20 years, Dakota Energy Cooperative has tripled the amount of energy they sell annually. Much of that growth has come from just a few larger consumers. All of the other cooperatives, through their ownership in East River Electric, invested in the infrastructure necessary to serve those large businesses. Costs to Dakota Energy alone would’ve been significant, so rather than building their own transmission and substation assets they relied on East River Electric and the other members to build the transmission for them. They signed a long-term contract in 2015 promising to buy power from East River Electric to pay for their share of that infrastructure. Now they’re attempting to break a contract which could lead to increased costs on the other cooperatives that helped them pay for infrastructure they needed.
Electric infrastructure is a capital-intense proposition. Transmission needed to move power from a generation source to a home or business is expensive. If cooperatives didn’t work together to take advantage of economies of scale and spread the risk of investing tens of millions of dollars to serve consumers, local rates would be much higher. East River Electric provides the expertise needed to build and maintain these transmission assets. East River Electric linemen and substation technicians, who are local South Dakotans and Minnesotans, help repair lines after storms. These are examples of how cooperatives have always worked together for the betterment of all.
FOR IMMEDIATE RELEASE
Media Contact: Joan Dietz, Manager of Communications
Bismarck, N.D. – Two new solar projects in South Dakota will provide another 20 megawatts (MW) of affordable, renewable power to Basin Electric customers.
Basin Electric Power Cooperative (Basin Electric) and West River Solar, announced the execution of a Power Purchase Agreement (PPA) for the West River Solar Project. When completed, the project will consist of two, 10-MW projects in Pennington County, South Dakota, near the Rapid City airport.
Unlike other generation and transmission cooperatives throughout the United States, Basin Electric is experiencing significant load growth within its membership.
“Renewable technology has become more affordable in recent years so we have been able to meet about 80 percent of our growth with renewable energy, as well as market purchases and natural gas energy production,” said Basin Electric CEO and General Manager Paul Sukut. “The West River project is Basin Electric’s third solar PPA and the result of our continuing goal of providing a diverse mix of cost-effective energy for our members.”
Ros Rocco Vrba, president of Energy of Utah, the parent company of West River Solar, said, “We are very proud for this opportunity to develop yet another renewable energy asset in South Dakota with West River Electric Cooperative and Basin Electric.”
“We’re excited that West River’s service area will be home to the West River Solar Project,” said Dick Johnson, CEO and general manager of West River Electric Association, a Basin Electric Class C member headquartered in Wall, South Dakota. “This solar energy project will benefit our cooperative family, as well as our local communities. As not-for-profit co-ops that are owned by our members, everything we do goes back to the people we serve.”
Basin Electric Class A member Rushmore Electric Power Cooperative, headquartered in Rapid City, South Dakota, provides wholesale power to West River Electric and seven other distribution cooperatives in western South Dakota.
“Our cooperative network is always looking to ensure we have a mix of power resources to meet the needs of our membership and renewable energy is an important part of that strategy,” said Vic Simmons, general manager of Rushmore Electric. “The energy from this project will all be used locally in western South Dakota and is an important strategic step as we look to the future in continuing our strong history of providing safe, affordable and reliable power.”
Solar energy in South Dakota received an additional nod when the South Dakota Public Utilities Commission approved a construction permit for the Wild Springs Solar Project last week. Wild Springs, which will also be located in Pennington County, is a 128-megawatt project and was Basin Electric’s first-ever utility-scale PPA for solar power. The project is anticipated to begin operations in 2022.
The West River Solar Projects are scheduled to begin operations in December 2022.
About Basin Electric Power Cooperative
Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck, North Dakota. It generates and transmits electricity to 140 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 3 million consumers. Learn more at www.basinelectric.com.
– 30 –
When was the last time you took a close look at your electric bill? If you’re like most, you probably don’t review it often and, when you do, it can be tempting to just scan and focus on the bottom line. We get it, time is short, and life is busy. But it’s important to gain a good understanding of what the charges on your electric bill mean.
A lot goes on behind the scenes within our cooperative family to calculate electric rates—from the wholesale level to the retail level— and this article breaks down how everything comes together to create the amount you pay each month.
The Journey of Electricity
Understanding all that goes into your electric bill starts with learning how electricity is made and how it’s delivered to your home. Before your local electric co-op can send electricity to your home, that electricity must be created by a generation unit. In our cooperative network, the electricity you receive at your home is a combination of energy created by wind, hydropower, natural gas, coal or other fuels. Electricity is generated at the same moment it’s needed and wholesale power providers like East River Electric Power Cooperative and Basin Electric Power Cooperative have a watchful eye on the electric system around the clock making sure your lights come on when you flip the switch. Depending on the weather, the generation mix can vary (if the wind is blowing, there’s more wind on the system; if the wind isn’t blowing, more traditional energy sources are used to meet electric usage).
Once the electricity has been generated, it travels over high-voltage transmission lines to substations, where the voltage is reduced to a lower level. The electricity then travels over distribution power lines and the voltage is reduced again to safely find its way into your home. In our cooperative network, East River Electric owns and maintains the substations and transmission power lines. When severe weather strikes, our local crews in South Dakota and Minnesota are at the ready to quickly make repairs and restore power to the grid.
Understanding Your Power Bill
Now, returning to your power bill, the first thing you might see is a facility or base fee. This is one of three types of costs on your bill. Rates are set based on cost of service studies done at the local co-op to cover its costs. The facility fee is a set amount you pay each month to cover your share of the onsite costs of your distribution cooperative; including metering, billing and local infrastructure. It’s a necessary service charge so all members pay their fair share of the fixed costs for operating the cooperative. All members pay the facility fee regardless of how much energy they consume so they all contribute equally to help keep the cooperative running. In other words, the facility charge that you see on your monthly bill funds the local distribution cooperative and is not directly related to the cost of East River Electric’s wholesale power. The facility charge can vary by cooperative and determined by the number of members who are supporting those costs. A cooperative with 2 meters per mile of line will likely have a higher facility fee than a cooperative with 4 meters per mile of line because the more rural co-op will have more infrastructure and fewer consumers in which to spread the cost.
The next two types of costs are usually combined as an energy fee on your bill, which is based on your electric usage each month. The energy you use at your home or farm is metered and charged on a kilowatt-hour (kWh) basis. The kWh rate is made up of wholesale power costs, including the generation and transmission needed to get the power from a generation unit to your local cooperative. A lot of things are considered when setting a wholesale power rate – construction costs, interest rates, regulatory requirements, depreciation of assets, materials, labor and more. Some of those costs are controllable, others are not.
One great benefit of being a member-owner of a not-for-profit electric cooperative is that you have a say in how our cooperative network is run. East River Electric is governed by a board of directors made up of representatives from our member systems. East River is also cost-based, so our rates are set by our members in a way that allows us to collect enough revenue to pay for providing power, with a small margin to meet lending requirements and plan for any unexpected costs. Those margins (money made over the cost of providing power) are given back to the members who own the cooperative. That’s something you won’t see from a for-profit company.
Generating and distributing power is an intricate business and involves a lot more than the generation of electricity, but rest assured that East River Electric will always meet the necessary demand to provide safe, reliable and affordable electricity to the region’s consumers.
FOR IMMEDIATE RELEASE: Nov. 24, 2020
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327
PIERRE, S.D. – The South Dakota Public Utilities Commission today approved a construction permit for the Wild Springs Solar Project to be built in Pennington County. The decision allows Wild Springs to move forward with plans to construct a solar energy facility capable of generating up to 128 megawatts of energy one-half mile south of New Underwood, South Dakota.
Wild Springs, PUC staff and the Burndorf Family Trust, the docket’s only intervenor, previously presented a settlement agreement that was accepted by the commission at their meeting on Nov. 12, 2020. The agreement resolved all issues except for the appropriate decommissioning financial assurance. The commission’s action this week was to rule on the proposed decommissioning condition submitted by Wild Springs and determine if a permit should be granted.
“It’s extremely interesting and very exciting to see this type of renewable energy project being developed in South Dakota,” said PUC Chairman Gary Hanson. “Ten to 20 years ago, solar energy wasn’t considered a viable option for our state because we didn’t have the right climate for it. It’s exciting to see that technology has grown and investors are willing to support a renewable energy that has very few challenges from the standpoint of aesthetics or noise or anything of that nature,” he stated.
The approved permit will include 38 conditions that must be adhered to during the construction and operation of the project. Land restoration, potential impacts to threatened and endangered species, post-construction breeding bird surveys and associated nest monitoring, and the financial assurance for future decommissioning are all among the details the conditions address.
“Decommissioning financial assurance is something we’ve been dealing with for the last three years on various projects. We’ve talked about a lot of different options and an escrow account is the one we’ve adopted up to this point; partly because until now, we’ve never had a bond presented to us in a manner that was irrevocable. In this case, the applicant has figured out a way to give us the assurance that no matter what happens to the owner, the bond will remain in place,” stated Vice Chairman Chris Nelson. “I greatly appreciate the time staff has put in to initially raise the question of whether this was appropriate and then to work through the details with the applicant to ensure that this will work long term,” he continued.
The proposed solar project will span up to 1,499 acres of privately-owned land and plans to include approximately 340,000 solar panels. Other components of the project include inverters, a tracking rack system, fencing, access roads, a substation, an operations and maintenance building, a parking lot, electric collection lines, up to three weather stations and temporary construction areas.
“This is South Dakota’s biggest solar project to date. We at the PUC have had a lot of experience with wind development in the last few years, but in certain regards, solar is different. I appreciate the efforts made by PUC staff and the applicant to help us ensure our landowners will be well protected,” said Commissioner Kristie Fiegen.
Wild Springs expects to complete construction of the $190 million facility by the end of 2022. Upon completion, the project will interconnect to the New Underwood Substation owned by Western Area Power Administration, located adjacent to the project area. The energy produced by the solar facility will be purchased by Basin Electric Power Cooperative.
Wild Springs filed its application with the PUC on May 15, 2020. The PUC held a public input hearing telephonically on July 1.
The Wild Springs Solar Project docket can be viewed on the PUC’s website at
www.puc.sd.gov, Commission Actions, Electric Dockets, 2020 Electric Dockets,
EL20-018 – In the Matter of the Application by Wild Springs Solar, LLC for a Permit of a Solar Energy Facility in Pennington County, South Dakota.
Photo Caption: East River Electric Power Cooperative’s Chief Member and Public Relations Officer, Chris Studer, was part of the solar project announcement at a news conference in February.
Neighbors helping neighbors. It’s a common phrase heard in rural America. We step up when our neighbors need help. That’s how the cooperative movement started around here. Neighbors made a promise to each other and worked to see it through. Oil and agriculture cooperatives sprung up to provide needed services. Electric co-ops were created by neighbors helping neighbors get electricity to the farm or ranch to benefit all rural families. Back then, people all across our region made a promise to each other: We’re going to work together to bring power to the prairie. People gathered together to help build their electric cooperatives by signing up their neighbors to bring electricity to rural areas that had never had it before; a service that no one else would provide. It’s made a profound difference in agricultural production, business and life in rural America. And then, those cooperatives made promises to neighboring cooperatives to create East River Electric, to provide a stable and reliable power supply to their local cooperatives.
Electric cooperatives today are still made up of member-owners that are accountable to each other. We do what we say we’re going to do. That means sticking with our commitment to provide reliable, affordable electricity to our neighbors.
Dakota Energy Cooperative headquartered in Huron has filed a legal complaint against its wholesale power supplier East River Electric Power Cooperative based in Madison. Through the legal complaint, Dakota is seeking to buy out of its long-term wholesale power contract they recently signed to take risks on the spot energy market with a for-profit company called Guzman Energy. They made a promise long ago to work together with surrounding cooperatives to create East River Electric and provide for long-term wholesale power supply. By attempting to break that promise to their fellow electric cooperatives, Dakota could end up paying more in the long run and leaving neighboring co-ops with higher costs. That’s not the co-op way.
The other cooperatives in our region want to continue working together to take advantage of economies of scale and the collective strength that our network provides and honor the promise they made to their rural neighbors. By keeping our cooperative family whole and helping our neighbors, we can continue to provide safe, affordable and reliable electricity for the long term.