How Basin Electric's new partnership in Wisconsin builds on a long-term strategy

The system that generates and delivers electricity across the United States is complex. Many different utilities, marketers, developers, and regulators have their fingers in the system, each with the common purpose of sending electricity to end-use consumers.

You are likely familiar with the Western and Eastern Interconnection, the two major electrical grids in North America. While load and generation grew quickly on each coast of the United States, as grid development moved toward the middle of the country, the Western and the Eastern grids didn’t work together quite right. As a way to describe that, some say one side said ‘tick’ and the other side said ‘tock.’

Basin Electric has generation and transmission facilities on both sides of the grid, and also has access to the DC ties which permit electricity to flow from one side of the interconnection to the other. These facilities and their access give the cooperative an incredible advantage in providing reliable, affordable electricity to its members, which are located on both sides of the interconnection as well.

Not only is the grid split into the Western and Eastern Interconnections, some of the system is also divided into regional transmission organizations (RTOs) like Southwest Power Pool (SPP) or the Midcontinent ISO (MISO). The cooperative’s membership has load in both the SPP and MISO regions, and as a result Basin Electric has power supply obligations in both regions.

Basin Electric is a transmission-owning member of SPP, an RTO that stretches from the Canadian border down to Texas.

Additionally, Basin Electric has been involved with MISO since 2005. MISO was started in 2001 and covers parts of North Dakota, South Dakota, Minnesota, and Iowa in Basin Electric’s service area, as well as 11 other states and into Canada. MISO is divided into 10 local resource zones for compliance with resource adequacy, and Basin Electric’s members are located in two of them: Zone 1 and Zone 3.

Becky Kern, Basin Electric vice president of Resource Planning and Rates, says the cooperative’s strategy in MISO for the last couple years has been focused on market purchases. In fact, more than 75% of the energy Basin Electric serves to its members in MISO is through the market.

Kern says the long-term strategy, however, is to diversify with more dispatchable and renewable resources as a way to maintain reliable, affordable power for the membership. This strategy, to have about one-third of the cooperative’s MISO needs in market purchases, one-third in dispatchable resources, and one-third in renewables, is not a hard and fast equation. According to Kern, it will take a number of years to implement but several steps have already been taken to achieve this goal.

Nemadji Trail Energy Center

Basin Electric announced in September a partnership with Dairyland Power Cooperative of La Crosse, Wisconsin, and ALLETE, of Duluth, Minnesota, to develop new natural gas-based generation.

Nemadji Trail Energy Center (NTEC), a proposed 600-megawatt combined cycle power plant, will be located in Superior, Wisconsin, and interconnect into MISO Zone 1. Basin Electric will own 30% of the project through its subsidiary Nemadji River Generation LLC. The subsidiary purchased an ownership stake from ALLETE.

Kern says this partnership gives Basin Electric 180 megawatts of economical, dispatchable generation. “Nemadji Trail will provide a hedge against the cost of serving our load in MISO and helps us diversify our energy and capacity in MISO,” she says. “This generator is a cost-effective, timely option for serving our members with reliable electricity and will help in the transition of additional renewables into the grid.”

Request for additional resources

In December 2021, Basin Electric issued a request for proposal for renewables, capacity, and energy in both SPP and MISO Zone 1 and Zone 3.

“We’ve looked for renewables over the past couple of years in MISO through these requests, but haven’t gone forward with the options we’ve received in MISO because they haven’t been economical compared to other alternatives,” Kern says. “We will be looking to see if there are renewables we can move forward with inside of the MISO region to meet some of our obligations.”

Kern says renewables are valuable as a fuel displacer, with wind generating more power in winter and solar generating more in summer. Basin Electric has found some economical purchases within Southwest Power Pool over the past couple of years. “They’re going to produce electricity unless there is congestion that curtails them, and that’s why you have to have resources that can dispatch when the renewables aren’t there. … You need to have some dispatchable resources that are capable of operating to the extent it’s economical,” Kern says. “You cannot go with 100% renewable portfolio to meet your members’ needs.”

Kern and her team will evaluate options received through the request for proposal based on pricing, location, and timing of when each option is available.

Membership agreements

In addition to these proactive strategies, Basin Electric’s role with some members located in the MISO region is changing as well. Two members, Crow Wing Power, a Class A member headquartered in Brainerd, Minnesota, and Federated Rural Electric Association, a Class C member through L&O Power Cooperative, a Class A member headquartered in Rock Rapids, Iowa, both currently receive wholesale power from Basin Electric and also Great River Energy, a generation and transmission cooperative headquartered in Maple Grove, Minnesota.

Great River Energy has received the regulatory approval needed to sell Coal Creek Station, a generation facility in Underwood, North Dakota, to Rainbow Energy and a subsidiary of theirs. The sale is anticipated to happen as early as May 2022. Coal Creek Station accounts for a substantial amount of the power supply these members receive from Great River Energy. After the sale, that portion will be supplied by Basin Electric. Over time, as Great River Energy retires its assets and agreements terminate, these members will eventually purchase more of their power supply from Basin Electric.