Heartland faces challenges from EPA

By Chuck Clement, Staff Reporter, Madison Daily Leader
The following article appeared on the front page of the August 29, 2014 issue of the Madison Daily Leader:

Heartland faces challenges from EPA

Emissions goals pose challenges; electric rate increases likely

The provider of about half of the electricity used by Madison’s electric utility customers has concerns about reaching the carbon-dioxide emissions reductions proposed by the EPA earlier this summer.

John Knofczynski, engineering manager at Heartland Consumers Power District, offered a presentation on Thursday to fellow members of the municipal Electric Advisory Committee that outlined the challenges one of Madison’s electricity suppliers faces if the current federal proposals remain the same.

Knofczynski warned that the current options for meeting a 35-percent reduction of South Dakota’s carbon dioxide emissions would mean a major restructuring of HCPD’s electricity supply and most likely higher costs to consumers.

Knofczynski said the EPA had an overall goal to reduce carbon-dioxide emissions across the nation by 30 percent less than 2012 levels. The EPA wants to reach that goal by 2030, but federal officials also have interim target levels that they want the states to reach by 2020.

The EPA has proposed that the states use four building blocks in the reduction plans: heat-rate improvements at existing power plants; substituting coal-based electricity with natural gas combined-cycle electricity generation; substituting renewable electricity generation; and demand-side (consumer) energy efficiency measures.

Knofczynski said that South Dakota only has one natural gas generation plant currently available, the Deer Creek Station owned by Basin Electric Power Cooperative. He said the Deer Creek Station would need to operate at more than a 70-percent capacity factor to offset generation losses from the coal-fired Big Stone Power Plant.

He also said under current EPA policies, electricity providers will not receive any credit for supporting renewable energy production that was active before the carbon-dioxide reduction policies go into effect.

Knofczynski told the advisory committee members that the EPA’s building blocks offered little in practical solutions to South Dakota consumers.

In his presentation, Knofczynski listed Heartland’s three primary electric power resources:

  • Whelan Energy Center Unit 2 near Hastings, Neb., which has a 225-megawatt (MW) output from its coal-fired generation plant. HCPD has 35-percent ownership equaling 82 MW; however EPA officials gave Nebraska a 26-percent reduction target.
  • Laramie River Station near Wheatland, Wyo., a three-unit, 1,710-MW coal-fired plant in which HCPD has a 3-percent share equaling 51 MW. Wyoming has a 19-percent reduction target, but Laramie Station is also currently managing a regional haze mandate made by federal officials.
  • Wessington Springs Wind Energy Center in South Dakota, consisting of 34 wind turbines providing 51 MW in total capacity. Heartland has purchased the full output from the wind farm since it went into service in February 2009.

Persons can send public comments by mail, e-mail or fax with the deadline on Oct. 16. All comments need to include the federal government’s docket ID No. EPA-HQ-OAR-2013-0602 in the message’s subject line.

The comments are mailed to Environmental Protection Agency; EPA Docket Center (EPA/DC), Mailcode 28221T, Attn. Docket ID OAR-2013-0602; 1200 Pennsylvania Ave. N.W., Washington, D.C. 20460.

Persons can e-mail comments to A-and-R-Docket@epa.gov or fax them to 202-566-9744.

WAPA seeking transmission project proposals

Western Area Power Administration (WAPA) is seeking new applications from project developers interested in obtaining a loan to construct new or upgrade transmission lines and related facilities that promote the delivery of clean, renewable power. WAPA has $3.25 billion borrowing authority under the Transmission Infrastructure Program (TIP). The TIP was recently revised and details were outlined in an April 7 Federal Register notice.

TIP leverages WAPA’s depth of transmission project development experience and expertise, along with its statutory borrowing authority, to advance projects aimed at expanding and modernizing the electric grid to facilitate the delivery of reliable, affordable power from renewable energy sources. The TIP “is separate and distinct from Western’s power marketing functions, and each eligible project must stand on its own for repayment purposes,” WAPA said in the notice.

To be eligible, prospective projects must meet, at minimum, the following criteria:

  • Deliver or facilitate the delivery of renewable energy resources
  • Have at least one terminus (geographical point) in Western’s service territory
  • Demonstrate a reasonable expectation of repayment
  • Not adversely impact system reliability or operations
  • Serve the public interest
WAPA Administrator Mark Gabriel

WAPA Administrator Mark Gabriel

“The doors are wide open. It’s time to solve the energy infrastructure needs for our nation’s future,” said WAPA Administrator Mark Gabriel. “Industry investments made today, like those offered through TIP, will ensure stability and reliability in the future.”

Applicants can either submit a project proposal and initial payment for the application review process, or submit a project proposal and business plan with full payment. WAPA’s staff will review the proposals quarterly and respond to applicants within 30 days of reviewing submissions.

For more information or how to apply, click here.

Minnesota receives funds for development of wood energy projects

United States Department of Agriculture (USDA) Secretary Tom Vilsack announced last week a partnership agreement to expand wood energy use, which will help improve the safety and health of our nation’s forests. The new partnership includes USDA, the Alliance for Green Heat, the Biomass Power Association, the Biomass Thermal Energy Council, and the Pellet Fuels Institute. 

Vilsack also announced more than $1.1 million in grants being awarded to five organizations to form state-wide teams that will stimulate development of wood energy projects. Grant recipients are:

  • Minnesota Department of Natural Resources, Saint Paul
  • Idaho Governors Office of Energy Resources, Boise
  • The Watershed Research & Training Center, Hayfork, California
  • North Country Resource Conservation & Development Council, Gilford, New Hampshire
  • The Alaska Energy Authority, Anchorage

Collectively, $2.9 million will be spent on this effort — $1.1 million in federal funds and $1.8 million in non-federal funds. Vilsack said the partnership will help find innovative ways to use leftover wood to create renewable energy and support good jobs in rural America.

“Wood to energy efforts are a part of our ‘all of the above’ energy strategy,” Vilsack said. “Appropriately scaled wood energy facilities also support our efforts to remove hazardous fuels and reduce the risks of catastrophic wildfires.”

The partnership agreement focuses on promoting wood energy nationwide as a means to address fire risk, bolster rural economic development, improve air quality and help meet the Obama Administration’s renewable energy and energy efficiency goals. These organizations support the use of wood energy across the scale of users, including residential, commercial and institutional facilities as well as industrial production of heat and/or electricity to drive businesses and feed the electrical grid.

Click HERE for more information on the agreement program.

Solar power in Minnesota gets boost from lawmakers

by Stephanie Hemphill, Minnesota Public Radio News

ST. PAUL — Minnesota could soon take another step ahead in the transition to renewable energy.

The state’s utilities already are replacing coal-fired power plants with windmills, prompted by the state’s landmark 2007 Next Generation Energy Act. Partly as a result, the state has a healthy wind power industry.

To continue the renewable energy effort, state legislators have introduced bills in the House and Senate that would increase the use of solar systems in homes and businesses.

“There are lots of folks, businesses in Minnesota that are eager to get going on this, but they need a little boost right now,” said Sen. John Marty, DFL-Roseville, chairman of the Senate Energy and Environment Committee. “And the faster we make the solar industry start growing in Minnesota, the faster the prices fall.”

Marty’s bill and a companion bill in the House would require utilities to produce gradually increasing amounts of solar power.

The House bill still has the original goal of 4 percent solar by 2025. In the Senate, it’s been whittled down to 1 percent.

Utility company officials are leery of the requirements, and contend they could be costly and unfair to ratepayers.

State Rep. Rep. Melissa Hortman, the author of the House bill, told the Ways and Means committee last week that the bill tries to balance the current and future costs of solar.

“Yes, it’s more expensive to install this capital up front, but it decreases cost in other ways,” said Hortman, DFL-Brooklyn Park. “For one thing, we know what the price of solar energy will be 30 years from now; we don’t know what the price of natural gas will be, we don’t know what the price of coal will be.”

Hortman said solar panels will help utilities by producing a lot of power on summer afternoons when people crank up their air conditioners.

Representatives of the state’s investor-owned utilities, however, say solar electricity still is more expensive than other forms of power, and their customers shouldn’t be required to buy it.

Rick Evans, Xcel Energy’s director of regional government affairs, told legislators that the bill is unfair because it requires people who don’t have solar panels to subsidize people who do have them. He said a family or business that lowers its electric bill by generating some of its own electricity still is using the system’s essential infrastructure.

“All of the wires, all of the poles, all the infrastructure right back to the generation source are also included in those kilowatt hour charges,” Evans said. “And if they’re not going to pay for all the kilowatt hours that they were before, then their neighbors who don’t have a solar panel, who can’t afford to put one up, are going to have to pick up the slack.”

Evans is negotiating with the bills’ authors to figure out a way to fix that.

Rural electric coops and city-owned power companies also say a solar mandate would be much too expensive. But the bills’ authors exempted coops and municipal utilities from the requirements.

Joel Johnson, director of government affairs for the Minnesota Rural Electric Association, said coops still are absorbing the costs of the 2007 renewable mandates.

“Electric coops are very long on generation right now,” Johnson said. “And when you mandate a utility to build and increase their generation when they already have more than their customers or in our case their members can use, it starts getting really expensive.”

Others have raised the issue of fairness, as the Senate bill exempts some industries but not others.

Iron mining and paper mills, which use a lot of electricity, successfully lobbied to be excluded, which dramatically reduces Minnesota Power’s obligation to invest in solar.

But other industries, such as oil refineries, also use a lot of power, and so far they are not exempt from the bill’s requirements.

Marty said he’s frustrated with how much he’s had to compromise to move his bill forward.

“Whatever we do this year, no matter how bold we try to be,” he said, “I think the next generation, in 15 or 20 years, are going to be looking back and saying, ‘you saw all the signs of what was happening; why were you so timid?'”

Marty said his bill could be strengthened on the Senate floor, where it’s expected to be heard early this week, or in conference committee. Minnesota Public Radio News can be heard at KZSE 91.7 FM in the Rochester area, or go online to MPRnews.org

Meet Zilowatt, a free online energy education resource

In conjunction with the Demonstration of Energy-Efficient Developments (DEED) program, American Public Power Association (APPA) is hosting a webinar this Thursday, December 13, to introduce a free online energy conservation education program, Zilowatt. The non-profit organization and Zilowatt program were founded by Silicon Valley entrepreneurs and is supported by volunteers, donations and grant funding from local or regional utilities, including APPA and DEED. Thursday’s webinar will showcase the program, including introducing the set of lessons and tools designed, built and demonstrated with help from Palo Alto Utilities in Palo Alto, California.

zilowatt logoTargeted at grades K-12, Zilowatt teaches by engaging all senses in learning with interactive lessons, energy labs, energy efficiency concept cards and videos known as Zilokits. Lessons discuss solar energy, light bulbs, wind energy, energy conservation, energy audits and more. The program aims to provide energy education using fun and engaging learning experiences while affecting behavior and inspiring conservation to reduce energy loads.

boost_picDesigned to be a low-cost, self-serve alternative to hiring an energy management company or developing a program from scratch, Zilowatt resources are free to use and available on the web. Teachers, students, utilities and other organizations can download the Zilokits as well as posters, stickers, door hangers and other materials at www.zilowatt.org.

The webinar is scheduled for 1:00 p.m. on Thursday, December 13. Cost is $89 for APPA members (including Heartland customers) and $179 for non-members. DEED program members can attend for free. For more information or to register, click HERE.

DEED is the only research and development program funded by and for public power utilities. Established in 1980, DEED encourages activities that promote energy innovation, improve efficiencies and lower costs of energy to public power customers. For more information, visit www.publicpower.org/DEED.