Reliability remains top priority after summer assessment points to possible shortfalls

This spring and summer, reports of energy shortfalls that could potentially lead to power interruptions were featured on numerous media outlets. These reports left people feeling uneasy and even a little gun shy, remembering the service interruptions that left consumers without power during the energy emergency caused by Winter Storm Uri in February 2021.

The news stories were the result of the publication of a reliability assessment done by the North American Electric Reliability Corporation (NERC). These assessments are done each summer and winter. NERC looks at every power market across the United States to determine available generation resources and load levels so they can ensure there is enough generation to serve the load.

The results of this summer’s study showed that of all the markets across the country, Midcontinent Independent System Operator (MISO), a regional transmission organization (RTO) Basin Electric has been involved with since 2005, is expected to experience the most amount of risk. MISO covers parts of Iowa, Minnesota, North Dakota, and South Dakota in Basin Electric’s service area as well as 11 other states and into Canada.

Valerie Weigel, Basin Electric vice president of Asset Management and Commodity Strategy, says there are several drivers that led to MISO’s increased risk: a major transmission outage in its service area that was experienced in June, a shortfall in capacity in its service area, coal generator retirements, lack of coal inventories, and warmer-than-average expected temperatures.

While MISO is seeing the most risk this summer, Southwest Power Pool (SPP), the other RTO Basin Electric has load in, is also seeing an increased risk of reliability issues. NERC points to drought conditions that have led to decreased hydroelectric generation as well as higher-than-average temperatures as the risks that could contribute to potential shortfalls.

“As part of its reliability assessment, NERC does a good job of evaluating the various market areas and determining possible timeframes and conditions that could lead to resource shortfalls,” Weigel says. “In addition to that, we also need to keep an eye on the amounts of resources in an outage and the amount of renewable generation that is being produced to ensure the market has the generation necessary to meet our load requirements.”

NERC also evaluates the amount of accredited resources in each market, meaning that even though an area might have 31,000 megawatts (MW) of wind generation available, it takes into consideration that the full amount won’t be 100% available all the time. As a result, if low or no wind generation lines up with higher-than-average loads and generation resources in an outage all at the same time, that could lead to instances where there are not enough resources to cover all the load in the market. 

In a recent survey commissioned by Basin Electric, members indicated that reliability was their top priority, and Basin Electric is well positioned to provide them with the highest reliability possible.

“One of our greatest benefits is that our members are spread across many different states which allows us to participate in multiple markets, and every market area we participate in is unique,” Weigel says. “SPP has a lot of wind generation. In the MISO market, we are more reliant on market purchases. In the western market, we don’t have an RTO, but because we have DC ties that help us connect the eastern and western markets, we can sell or move lower-priced power from one market to a higher-priced market in another. So the diversified, widespread area of our membership provides great benefits to our members.”

In addition, Basin Electric maintains an all-of-the-above generation strategy, using coal, natural gas, wind, hydropower, oil, recovered energy, and soon solar to ensure reliability and affordability. 

Baseload generation facilities, which have a reliable source of fuel such as coal and natural gas, ensure power is available to members when they need it. Two of the cooperative’s four coal facilities are “mine mouth” units, meaning the mine is located close to the plant to ensure adequate supply. And Basin Electric manages its natural gas fuel position in a reliable and cost-effective manner, which includes securing sufficient firm natural gas purchases and utilizing natural gas storage.

Both coal and natural gas facilities are dispatchable, meaning they can generate electricity on demand to ensure reliable power is being generated when intermittent resources, such as wind and solar, are not available.

Basin Electric also owns oil and diesel facilities that only run when they are needed. There are fuel reserves on site to ensure the units can run when necessary. For example, Spirit Mound Station, an oil-based peaking station near Vermillion, South Dakota, currently has 700,000 gallons of fuel oil on site. 

In addition to generation, Basin Electric line crews maintain more than 2,500 miles of high-voltage transmission lines and the associated infrastructure necessary to move power to locations where it is most needed.

While reliability is Basin Electric’s top priority, some Basin Electric members did experience service interruptions during Winter Storm Uri; however, service interruptions were minimal compared to those in other areas of the country where power was out for days. And when other areas of the country experienced dramatic rate increases due to spiking electric market and natural gas prices, Basin Electric was able to maintain steady, affordable rates.

Following the February 2021 energy emergency, Basin Electric employees participated in a rigorous review with SPP and its other members to assess and provide improvements to system operations, resulting in better coordination of maintenance activities and outages to ensure resource availability.

“One of the big things Basin Electric, WAPA (Western Area Power Administration), and the markets learned from the February 2021 event is that we need to do a better job communicating with members the steps we’re all taking when resources and loads are getting tight,” Weigel says. “As a result, we developed an improved process to notify members if and when an Energy Emergency Alert Level 1 or above occurs to try to give them as much time as possible to prepare for a potential load-shed event.”

True to NERC’s predictions of higher-than-average loads, the SPP region reached a new all-time peak load of 51,090 MW on July 5, exceeding the previous record for instantaneous demand for electricity of 51,036 MW set July 28, 2021. “(This highlights) the important role fuel diversity plays in ensuring electric reliability,” SPP said in a July 8 press release. “At the time of the new record, SPP relied on a mix of energy sources including traditional fossil fuels, renewables, nuclear power, and other types of generation.”

Basin Electric is also working on a long-term strategy to diversify its portfolio in the MISO market with more dispatchable and renewable resources as a way to maintain reliable, affordable power. As part of this strategy, the cooperative is partnering with ALLETE and Dairyland Power Cooperative to develop Nemadji Trail Energy Center, a 600-megawatt combined cycle natural gas-based generator near Superior, Wisconsin. Becky Kern, vice president of Resource Planning and Rates, says the partnership gives Basin Electric 180 MW (its portion of the energy produced) of economic, dispatchable generation. “Nemadji Trail will help serve our load in MISO and diversify our energy and capacity in that market,” she says. “This generator is a cost-effective, timely option for serving our members with reliable electricity.”

“Plans such as these are a direct result of the extensive planning Basin Electric does to forecast for the long-term power needs of its members,” Weigel says. “While this summer’s reliability assessment has the potential to cause alarm, our members can be assured that Basin Electric is doing everything possible to ensure their power remains reliable this summer and every season after.”