Load growth and investment

December 9, 2024

Reliability depends upon an electric system that is resilient, robust, and redundant. How does that happen? It happens when there are insightful, long-term planning strategies incorporated at all levels of the electrical system – generation, transmission, and distribution.

Tim McCarthy
Sioux Valley Energy
General Manager/
Chief Executive Officer

I’ve talked at length in the past about Sioux Valley Energy’s system planning and its 20-plus year plan to update its distribution system. This is essential to all members – not just new members. While it’s true we are adding new electrical infrastructure to serve new loads; upgrading existing infrastructure is just as important. These upgrades help us better serve existing members who need more electrical capacity to power their lives.

Last month in my column, I addressed power supply rate impacts which in part are due to investments needed to address load growth. The investment is significant. Basin Electric Power Cooperative (Sioux Valley Energy’s wholesale power supplier) will be spending more than $8 billion in the next 10 years to be able to provide power to electric co-op members. However, electric system investment is not limited to the wholesale power supply level.

There are significant investments being made in the transmission and distribution system as well.

The numbers are staggering if you look at the planned 10-year investments for just Sioux Valley Energy members. To support the future load growth of Sioux Valley Energy, approximately $440 million (yes, that’s right – nearly half a billion dollars) will be invested to support just the SVE membership at the generation, transmission, and distribution levels. That is an additional $15,000 per member on top of what is already invested!

While it is a heavy lift, we are ready for the challenge and are making long-term plans to meet member demand for electricity. Just think about your own use of electricity and how much it has increased in just the last decade. So much is changing, and those changes will require unprecedented amounts of electricity. For example, technology has been evolving to include more and more artificial intelligence (AI) and data mining. What is the common denominator for those technologies? THE NEED FOR ELECTRICAL POWER! Every one of those computers needs to be powered; and because of the heat they produce, they also need to be cooled. How do you do that? You do it through electricity!

There are many examples of our growing demand for electricity but well-planned investment in the electric grid will help us get to where we need to be in the future, which centers around a reliable system for our members. Will there be challenges? Yes. Will there be a rate impact? Yes. Will we work to mitigate impacts to the best of our ability? Yes. Don’t get me wrong – while there is a cost to load growth, there is also a significant benefit. As I mentioned, there are costs to infrastructure investment, however, those costs are spread out over 30 years, so future members will also help pay for it. Load growth also signals strong economic development – which is important for communities, businesses, and individuals.

We plan to go into more detail about the impact of load growth at our district meetings which will be held throughout the winter months – check out the dates listed in this edition of the newsletter and mark it on your calendar. Next month, we hope to provide you with specific information about the upcoming rate increase and how it will impact your electric bill.