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Message for Dual Fuel users
Inflationary pressures and supply constraints throughout the energy industry continue to drive unusually high prices in the electricity and natural gas markets. Forward curves indicate the current pricing environment will continue into the 2022-23 winter season. There will also be additional pricing pressure in the wholesale power markets during the heating season due to natural gas supply competition with domestic heating. Great River Energy, our wholesale power provider, will manage costs by using our members’ dual fuel program participants to reduce load during peak pricing hours, which may include both morning and evening peak load periods.
As a reminder, the primary heating system can be controlled up to 12 hours per day and up to 400 hours per heating season. Control occurs on days of high electrical demand, high wholesale energy prices and/or system emergencies.
Because we anticipate increased control hours, we highly encourage duel fuel program participants to ensure you have adequate supplies of your secondary fuel source. Replenishing storage tanks now typically leads to cost savings versus filling up during peak winter heating months.
In addition to purchasing in the early fall, you can also save money if you:
Buy a bigger tank, which allows you to stock up when prices are low.
Shop around and then lock in low rates. The propane market is competitive, so research rates and consider additional perks such as free service calls, maintenance, buybacks and bonuses. If rates are low, as they usually are in September and October, ask if the company will lock in the low rate for a period of time.
Ask about discounts. Oftentimes these are made available for veterans, seniors, employees of the state or major corporations, memberships in travel clubs or holder of credit cards. You never know where a discount may exist, so don’t be afraid to ask.
Schedule deliveries carefully. Avoid holiday, weekend and other peak delivery times that may incur a fee.
Conserve propane by using less. Install a smart thermostat, keep appliances clean and well-serviced and choose energy-efficient models.
Should you have any questions, please contact our Energy Experts, 651-463-6234.
How the recent electric grid warnings affect you
You have probably read or seen news reports the past few weeks about the potential for rolling blackouts this summer. While blackouts are unlikely, they are possible this summer. Dakota Electric wants to stress that the chance of a rolling blackout is low, but we also want to make sure that our members are informed and have some additional information, so they are prepared.
When discussing this issue, it is important to understand where Dakota Electric sits in the delivery of electricity to members. Dakota Electric is a distribution-only cooperative, so it is our responsibility to deliver energy directly to residential, commercial and industrial members. Dakota Electric purchases its electricity from Great River Energy, which is our wholesale power provider and the company responsible for providing us with the power needed to serve your electricity needs. Great River Energy is a member of Midcontinent Independent System Operator (MISO). MISO manages the regional grid and the power that flows through it so that everyone has the power they need. Great River Energy has done an excellent job providing reliable power and planning for future power needs. Great River Energy has enough resources to serve all 28 of its member cooperatives across Minnesota with power.
The reliability warnings you may have heard came from two organizations, the North American Electric Reliability Corporation (NERC) and MISO. NERC is responsible for overseeing electric reliability nationally, and MISO is our regional system operator. As the regional system operator, MISO uses reliability and economic inputs to decide what powerplants operate and directs electricity from dozens of utilities in 15 states, impacting 42 million people.
As part of its responsibilities, MISO projects electricity demand and production under many different scenarios. While reviewing certain scenarios, MISO observed instances where total demand in the region may slightly exceed firm energy supply. You should know, MISO takes a conservative approach in its assessments. In other words, MISO assumes a worst-case for each planning scenario. Although MISO requires utilities to hold a reserve, or buffer, this extra energy is not included in the projections. MISO also only includes “firm energy sources” and not renewable sources that are intermittent. (“Firm” sources are historically coal plants, natural gas powerplants, or nuclear powerplants.) That being said, it is possible that some, or even most, of these renewable resources will be available when we need them.
MISO also has other tools or options available during high demand that it does not include in its forecast. One such option is calling on utilities to reduce energy through demand management (also known as load control or off-peak). When this occurs, Dakota Electric is in a great position given our decades-long commitment to load management and energy conservation. Whether it’s cycled air conditioning, interruptible water heating, or commercial and industrial programs, Dakota Electric can significantly reduce peak demand in the summer if needed, and Great River Energy can typically reduce its load by more than 300 MW.
Dakota Electric reiterates that the risk of rolling blackouts occurring is low, but it is still possible. With this in mind, here are three takeaways for you:
Be prepared, stay informed: Stay up-to-date on information from Dakota Electric, Great River Energy and local authorities or news media about energy conditions. This will provide you with real-time information and whether adjustments in your electricity use are needed.
Sign-up for Dakota Electric programs: Consider participating in one of Dakota Electric’s load management programs such as cycled air conditioning. Not only do these programs help during high demand periods, they also help the rest of the year through lower overall costs and direct financial savings to you through bill credits or lower rates. Thank you to all who participate already.
Planning and preparation: Know that Dakota Electric regularly trains and interacts with Great River Energy about these types of situations. We are prepared to make sure any service disruption is limited. Our members expect safe and reliable electric service.
Dakota Electric wants to make sure that our members have the right information to make informed energy choices. Thank you for trusting us with your electricity needs. We value each member-owner and strive to provide outstanding service and reliability, all day — every day.
MISO and Summer Demand
Recently, the North American Electric Reliability Corporation (NERC) issued its 2022 Summer Reliability Assessment. In it, NERC — the United States’ authority on electric reliability — warned that several parts of the country are at risk of energy shortfalls this summer due to predicted above-normal temperatures and drought conditions over the western half of the continent.
Great River Energy has sufficient resources to serve its membership, but expected weather challenges may warrant added measures to maintain reliability of the larger grid. To read more about this, visit Great River Energy’s website.
Here’s an update from Great River Energy that was part of our annual report to our members. Since we didn’t hold an annual meeting this year, we have provided the reports in video format. Visit our YouTube channel to view the report from board officers and our CEO.
Planning engineers anticipate more high-voltage power lines
Great River Energy, wholesale power provider to 28 member-owner distribution cooperatives (like Dakota Electric Association) in Minnesota, continuously studies the electric power grid to ensure the high-voltage power line system that delivers electricity to local cooperatives is always reliable, and ready to keep the power flowing and the lights on.
The addition of renewable energy, along with the retirement of coal plants and the increasing need for resilience to extreme weather, is spurring the need for power grid upgrades to maintain future reliability. Utilities across the region are significantly increasing the amount of renewable energy they provide to their customers. Great River Energy alone will nearly triple the amount of renewable energy, primarily wind energy, in its portfolio by 2025. To read more, see the full story on Great River Energy’s website.
Coal Creek sale approved by member cooperatives
At a special Feb. 9 meeting, Great River Energy’s member cooperatives approved the updated agreement for the sale of Coal Creek Station and the high voltage direct current (HVDC) system to Rainbow Energy Center, LLC and Nexus Line, LLC, respectively. Great River Energy’s allrequirements members also approved the purchase power agreement with Apex Clean Energy for the 400-megawatt Discovery Wind Project in McLean County, N.D. Read the full statement.
Great River Energy’s revised contract approved
Dakota Electric’s board of directors, after much discussion, voted to pass Great River Energy’s revised power supply contract. (The contract was revised since the other contract expired at the end of 2021. See more info below.) The contract provides for more than 400 MW of wind energy from the Discovery Wind project in North Dakota, while continuing the temporary purchase of baseload energy for reliable, low-cost wholesale power. The overall return on investment and timeline have not changed significantly from the previous contract approved in August. Dakota Electric is just one of 28 electric cooperatives who must vote on the plan. The final vote will take place when cooperative directors meet at Great River Energy on Feb. 9.
Great River Energy and Rainbow Energy contract extension
The negotiation period for the sale of Coal Creek Station and the HVDC transmission line was recently extended by both Rainbow Energy and Great River Energy. Changes to the contract were explained to cooperative board directors and key staff on January 13. Portions of the contract are confidential and are subject to nondisclosure agreements (NDA), which is typical of contracts between parties. There were relatively minor modifications made to the details in the revised contracts and nothing that significantly impacts costs or return on investments. Below are main points of the contract extension:
Power purchase agreement start date no sooner than May 1, 2022 to complete regulatory approvals (end dates remain unchanged)
Modifications to wind resources under consideration in Minnesota
Reduce purchases down to 328 MW of output from CCS beginning in 2023
While portions of the information are subject to NDAs, a redacted Powerpoint from Great River Energy’s January 13 briefing is available for download.
Dakota Electric’s board of directors will be hearing an update from Great River Energy personnel at the January 27 board meeting. Board members will ask questions, discuss the contract changes and vote on it at this board meeting.
Dakota Electric members may also attend this virtual meeting. Those who wish to attend the board meeting using Microsoft Teams may contact Melissa Cherney, executive assistant, 651-463-6252 or [email protected].
PUC approves transfer of HVDC construction permit
On January 6, 2022, the MN Public Utilities Commission voted to transfer from Great River Energy to Nexus Line the construction permit for the Minnesota portion of the high-voltage direct-current transmission system that spans between central North Dakota and the Twin Cities. Read more about it.
Great River Energy is holding a confidential informational meeting on January 13 for board and key staff members of its distribution cooperatives, including Dakota Electric, regarding an extension of the contract relating to the sale of Coal Creek Station and HVDC line. They are also providing updates on evolving contract terms since they remain active in negotiating details.
After the January 13 meeting, information available for public release regarding the contract extension will be posted on this page. Dakota Electric’s board will discuss and vote on the contract extension at the January 27 board meeting.
Great River Energy Update — Dec. 20,2021
Dakota Electric’s board of directors approved a new 25-year wholesale power wind contract in southwest Minnesota on the Buffalo Ridge for 100 megawatts (MW). After much discussion, an option to take an additional 68 MW from Coal Creek Station did not pass at the December board meeting. Dakota Electric is one of 28 cooperatives who voted on the proposed power purchase agreements. Regardless of the outcome of the Coal Creek Station purchase option, Great River Energy’s contract to purchase output from Coal Creek Station expires in 2030.
Great River Energy seeks to exercise additional 68MW option on contract
Great River Energy has decided to exercise their option to purchase an additional 68 MW of output from Coal Creek Station as part of the Rainbow Energy deal. This is not a new contract but an option that was part of the original contract to reduce reliance on this plant from the current 1100 MW down to 300 MW. The option will bring the total output purchased for a limited time up to 368 MW. The Great River Energy board has already approved the option, and Dakota Electric’s board will vote on its ratification at the December board meeting. The Rainbow Energy purchase is temporary, since it will decrease to zero in 2031. According to Great River Energy, this option provides stable rates in an unpredictable energy market, a reliability hedge for events like a polar vortex, and improved overall risk management for the next decade as Great River Energy looks out for their member-owners.
Great River Energy letter Read a letter from Great River Energy CEO David Saggau.
Strategic Portfolio Changes
Information on the PUC filing regarding the permit transfer of the transmission line On July 1, 2021, Great River Energy (GRE), on behalf of itself and Nexus Line, LLC filed a request with the Minnesota Public Utilities Commission (PUC) for a partial transfer of the Construction Permit issued by the Minnesota Environmental Quality Council in Docket No. CUTR-1 on June 3, 1976. The Construction Permit serves as the legacy “Route Permit” for Great River Energy’s 400 kV HVDC high voltage transmission line and other facilities in Minnesota. Minnesota Rule 7850.5000 governs the process for transferring permits for projects such as GRE’s HVDC line. This rule requires the PUC to determine whether the prospective owner of a large energy facility, in this case Nexus Line, LLC, will be able to comply with the conditions of the approved permit. As part of its review, the Commission may impose reasonable additional conditions on the permit and hold a public meeting to provide the public an opportunity to comment on the permit transfer. The PUC docket number for the permit transfer is ET2/TL-21-434 and all the information regarding this transfer, including the construction permit, may be found on the PUC’s eDockets website. The PUC is expected to decide on the permit transfer this fall.
Great River Energy sought a buyer for Coal Creek Station that was going to utilize carbon capture, which many environmentalists and the White House support as necessary technology for our future. Click here to download the article.
Powerpoint about Coal Creek sale A detailed Powerpoint (some parts redacted due to confidentiality agreements) about the sale of Coal Creek and the transmission line is available for download. Some highlights about the sale:
Provides better energy and capacity portfolio
Reduces coal exit costs
Selling HVDC system creates highest value at lowest risk
Dakota Electric sends out Circuits monthly newsletter to our members each month. Inside, members can find valuable money- and energy-saving tips, special event details, news about Dakota Electric and electric utility industry information that may impact electric bills.
Dakota Electric Association
4300 220th Street West
Farmington, Minnesota 55024