Power generation is a complex issue that takes rigorous and thoughtful long-term planning. Sioux Valley Energy’s power suppliers plan years (sometimes decades) in advance to add generation to their fleet, navigating regulations and public acceptance.
Power Generation Q&A
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Tim McCarthy
Sioux Valley Energy
General Manager/
Chief Executive Officer
This is an important issue to our members because power supply makes up over 60 percent of the Sioux Valley Energy budget—it has significant impacts on your electric bill.
We often get questions about why we can’t just build more affordable generation. Well, Sioux Valley Energy doesn’t generate electricity and we don’t decide what resources to build.
To explain, we have three tiers to the electric co-op system – generation, transmission, and distribution. Sioux Valley Energy serves as the distributor, delivering electricity directly to its end members. Our power suppliers, East River Electric and L&O Power
Cooperative, manage the transmission tier, while Basin Electric Power Cooperative (Basin Electric) generates the electricity.
Additionally, the Western Area Power Administration contributes hydropower generated from dams on the Missouri River.
Our wholesale power supplier, Basin Electric, uses an “all of the above” strategy, generating electricity from a diverse mix of resources including natural gas, coal, wind, hydro, solar, waste heat, and fuel oil.
It is absolutely essential that we provide power to our members 24 hours a day 7 days a week and that requires what we call baseload or dispatchable power. Coal and natural gas are the foundation of that baseload power for electric co-ops in this area.
As new baseload generation is built, the focus has shifted to natural gas due to its ability to provide reliable and affordable energy. Basin Electric is planning to construct two additional natural gas resources in the next five years to meet future energy needs.
Renewables like wind and solar play a role in power generation even though they are intermittent and don’t run 24/7. On windy days, wind can supply up to 80% or more of Basin Electric’s total power supply, but when the wind isn’t blowing, that drops to 1% or less.
Natural gas pairs well with renewables because it can quickly adjust to balance the variability of those resources.
This is just a snapshot of the information you will get at our upcoming district meetings which begin at the end of February. If you can’t make your local meeting, you are welcome to attend any of the others. Take care and hope to see you soon.
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