Digging Deep for Energy Solutions
An innovative co-op partnership is making geothermal heat pumps affordable for more homeowners—and changing their energy future.
Clackety-clack oil pump jacks, the flare of natural gas wells, towering wind turbines, and the round, hot sun. With these energy resources clamoring for public attention, it’s little wonder Oklahoma homeowners overlook the more abundant natural resource—and it’s right below their feet.
That buried treasure is geothermal energy, created by Mother Earth’s steady belowground temperature of 55 to 59 degrees and harnessed through an electrically powered system known as the geothermal heat pump. The technology works via a series of loops buried in the ground, or run into a well, pond or lake, that act as heat exchangers, drawing heat from the earth in the winter to warm the home and removing heat from it in the summer.
For years, Oklahoma electric cooperatives have offered rebates, low-interest loans, and even installation services to encourage members to install geothermal systems. Clean, green and quiet, the Department of Energy reports geothermal heat pumps use from 25 to 50 percent less energy than traditional heating and cooling systems. The U.S. Environmental Protection Agency touts geothermal as “the most efficient, environmentally clean and cost-effective space conditioning system available.” Despite the high praises, less than 2 percent of Oklahoma homeowners use geothermal heat pumps.
Two Oklahoma electric co-ops, in partnership with their cooperative owned generation and transmission facility, hope to change that statistic by eliminating what they claim is the biggest barrier to consumer acceptance—installation costs. To entice members to choose geothermal, CKenergy Electric Cooperative in Binger and Kiamichi Electric Cooperative in Wilburton pay for the cost of installing the ground loops, allowing the member to pay it out slowly via a small monthly fee or a special rate. Either way, the homeowner enjoys the Cadillac of heating and air systems, a significant reduction in heating and cooling costs, plus other benefits. Like their brethren co-ops, CKenergy and Kiamichi Electric offer cash rebates of up to $1,050 per ton on qualifying geothermal units, which further reduces the price tag for members. They also provide expert oversight throughout the installation process, helping the member select a qualified contractor and ensuring the unit is properly sized and installed to the member’s satisfaction.
Officials at CKenergy estimate each geothermal system requires roughly 225 feet of ground loop. At $9 per foot to install, the co-op investment in the loops is no small change. For that reason, the program is raising some eyebrows among co-op leaders. Yes, geothermal technology helps members save money, but can an electric co-op with thousands of miles of line to maintain, fewer consumers and therefore less revenue collected per mile, afford that sort of risk?
Boyd Lee, president of strategic planning at CKenergy, believes the answer is “yes.”
“They can afford it if they’re concerned about rising power costs, and I guarantee it, they are concerned,” Lee stressed.
CKenergy hired Lee in 2005 to help control those costs by finding a way to reduce its high demand for electricity in the summer. In the quest to lower the critical summer usage “peak,” a determining factor in what the co-op and its members pay for wholesale electricity, CKenergy initiated its geothermal loop program in 2011, the first of its kind in Oklahoma.
To those unfamiliar with the mysterious world of wholesale power rates, the heavy AC use that comes with Oklahoma summers would seem more of a cash cow than an albatross. The reality, however, is much different.
Like many co-ops, CKenergy serves a large number of residential consumers who heat their homes with propane or natural gas in the fall and winter, and cool with electricity in the summer. For CKenergy, the westward expansion of Oklahoma City and Mustang magnified the problem by adding even more residential load to co-op lines.
The high summer usage followed by months of low kilowatt-hour sales amounted to a financial headache for the co-op, Lee explained.
“With all those houses, we were getting killed in the summertime,” Lee recalled. “We were fighting a continuous upward trend in power costs.”
At the generation level, Anadarko-based Western Farmer’s Electric Cooperative (WFEC) battled a demand crisis of its own. The oil shale drilling boom brought more people and more wells to western Oklahoma. Worried about potential brownouts, talk at WFEC turned to building a new 440 megawatt (MW) natural gas power plant. Seeking a way to reduce or postpone that financial burden on its 21 member co-ops and their consumers, WFEC took a closer look at geothermal technology.
In 2013, WFEC initiated a yearlong Geo-Validation Study that closely monitored geothermal use in 22 homes across Oklahoma. The results were startling: If 28,000 homes in its service territory used geothermal systems, WFEC could decrease its demand needs by 61 megawatts, which translates to a $69 million reduction in future plant construction costs.
“We know that each home with geothermal can reduce our capacity by 2.6 kilowatts (KW),” said Mark Faulkenberry, senior manager of member relations. “That doesn’t seem like a lot, but when you multiply it over thousands of homes, it becomes a significant amount of peaking capacity that we wouldn’t have to build in the future.”
With savings for the homeowner, reduced load capacity for power plants, and lower wholesale electricity rates for co-ops, there are no losers when it comes to going “geo,” Faulkenberry stressed. By delaying the need for new power plants and decreasing generation needs, geothermal use also reduces carbon emissions, scoring another win for the environment.
In the end, however, geothermal’s ability to change an electric co-op’s energy future rests with the consumer-member. CKenergy and Kiamichi Electric loop programs bring geothermal costs in line with competitive heating and air systems, but breaking through old perceptions can be a hard sell, and as Lee pointed out, many homebuilders are reluctant to promote geothermal because the higher cost affects their profit margin.
David Brookshire, owner of Brookshire Homes, defies that norm by installing geothermal systems in the 90 percent of his custom designed homes.
“I’m a green builder, and I believe in saving my customers money,” Brookshire said. “If I build a home, I do it right and go geothermal.”
With more than 400 homes to his name, Brookshire believes there’s a bright future for geothermal technology in Oklahoma.
“People are getting smarter about geothermal, especially the younger generation of homeowners. They do their research, and they know it will save them money in the long run,” he said. “There’s no doubt about it; geothermal is the up and coming thing.”