CEO’s Message – January 2022
2022 Cooperative Rates Remain Stable
As we put 2021 behind us, much uncertainty remains. The pandemic continues, the country is facing ongoing supply chain issues, and prices for products and services continue to rise. In Minnesota, the Public Utilities Commission (PUC) recently approved rate hikes for Minnesota’s largest electric utilities. Despite all of this, I am happy to report that your Board of Directors approved the Co-op’s 2022 budget and there will be no rate increase for Stearns Electric members this year.
As a distribution cooperative, over 64 percent of Stearns Electric’s annual expenses are in power supply purchases. Therefore, our rates are significantly impacted by our wholesale power provider, Great River Energy (GRE).
In 2020, GRE announced significant changes to its energy portfolio, which included the following:
- Retiring Coal Creek Station in 2022
- Adding 1,100 MW of wind energy generation by 2023
- Converting Spiritwood Station power plant to be fueled by natural gas
- Installing a 1 MW long-duration battery demonstration project
- Purchasing more power from the MISO* energy market
In 2021, GRE announced the sale of Coal Creek Station to Rainbow Energy Center, which plans to continue operations at Coal Creek Station, develop carbon capture and storage capabilities at the facility, and sell the generated energy back into MISO.
These changes have allowed GRE to maintain rates in 2022, which allows Stearns Electric to do the same for its members.
“We spent over a decade transitioning to a portfolio of power supply and transmission resources to efficiently serve our member-owner cooperatives,” said Great River Energy President and CEO David Saggau. “The benefits of those decisions are now being felt. Wholesale rate stability is incredibly important to our member systems.”
This is great news for member-consumers of Stearns Electric, especially when Minnesota’s two largest electric utilities, Xcel Energy and Minnesota Power, have proposed significant rate increases of 21 and 18 percent respectively over the next few years. In December, the PUC approved smaller, interim rate increases for both energy providers as it considers the larger proposals. Their consumers will see the increase on their electric bills starting this month.
Your Board of Directors and Cooperative staff work hard to develop the annual budget for Stearns Electric. Maintaining a reliable energy distribution system takes significant investments in both time and money. Though rate increases are inevitable, we spend much time planning the work and budgeting as responsibly as possible to prolong a necessary rate increase for as long as possible.
*MISO: Midcontinent Independent System Operator
Robin C. Doege
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