CEO’s Message – August 2019
Clean Energy, Balanced with Reliability
During the 2019 Minnesota legislative session we saw plenty of bills introduced to develop new energy policies. Some of those bills included topics like energy storage pilot programs, energy conservation requirements, clean energy and carbon-free concepts. Minnesota Governor Tim Walz has announced his goal for state energy utilities to be 100% carbon free by 2050. He has stated that his energy proposals would address climate change while ensuring “reliable, affordable and sustainable electricity” for Minnesotans. So this month, I wanted to share some information about how Stearns Electric Association and our wholesale power providers are addressing these energy topics while balancing the ability to provide reliable power at a competitive price.
Stearns Electric purchases power from two main sources, Great River Energy and the Western Area Power Association (WAPA). Approximately 90% of our wholesale power purchases are from Great River Energy, the other 10% are from WAPA. Power purchased from WAPA is carbon-free hydropower from the Missouri River.
Our WAPA allocation is a fixed amount of kilowatt hours based on a power purchase agreement with WAPA. Stearns Electric’s WAPA power allocation is a valuable part of our power purchase portfolio and is priced below average market prices. It also provides Stearns Electric with a carbon-free source of wholesale power. Even though our WAPA allocation is carbon free, we are not able to include it in our renewable energy portfolio. Minnesota only recognizes “new” renewable resources following the 2007 Minnesota Next Generation Act. Stearns Electric has been purchasing WAPA hydropower since the 1970’s.
Over the past 10 years our primary power supplier Great River Energy has been aggressively pursuing carbon reduced generation for Stearns Electric. In 2018, seven years early, Great River Energy met a Minnesota state mandate of reducing carbon emissions by 25% by 2025 and has since committed to reduce emissions by 50% by 2050. Great River Energy is able to do this by incorporating renewables into their generation mix.
While incorporating renewable energy and reducing emissions is incredibly important for the future landscape of our state and the energy industry, I’m reminded of Stearns Electric’s Mission Statement, which reads “To safely provide competitively priced and reliable electric service, beneficial energy solutions and a positive member experience.” Reliability is a key factor of that statement, our focus and your satisfaction. This summer Minnesota residents experienced an extremely hot and humid weather event on July 10. There was high demand for electricity over several days and virtually no wind. If it wasn’t for Great River Energy’s fossil fuel generation in North Dakota, electric service to our member-consumers would have been interrupted. On January 29, 2019, Minnesota experienced an extreme cold weather event, the polar vortex. Again, there was no wind generation. If it weren’t for Great River Energy’s coal and hydrocarbon fueled peaking plants, there would not have been electric service.
Stearns Electric understands the importance of transitioning to less carbon intensive energy generation. We also understand how important electric service reliability is to each of you. We support the government working with utilities to facilitate the transition away from carbon intensive generation, without sacrificing dependability of our services. Our goal at Stearns Electric is to support Great River Energy in this transition, while providing you reliable electric service.