The right mix

Balancing fuel sources ensures reliable, affordable power even when weather, prices and demand are unpredictable

Any baker would tell you it takes the right mix of balanced ingredients to bake a delicious cake. Each unique ingredient has its place in contributing to flavor and texture, ultimately serving a diverse palate.

The same is true for your local electric cooperative in their mission to provide safe, reliable and affordable power. It takes a diverse energy mix, comprised of unique fuel sources, for your electric co-op to reliably and affordably deliver power to their members amid extreme events and unexpected conditions, ultimately keeping your lights on.   

Behind the scenes, it takes a complex balancing act for your electric cooperative to balance fuel resources at the right time and at the right cost to ensure the electricity you depend on is there when you need it most.

“By having diverse resources in our generation mix, we can balance them to get the lowest costs and the highest reliability. We put every single project we pursue against this criteria. Our goal is to keep wholesale power costs flat or reduce costs for our member co-ops,” said Gary Roulet, CEO of Western Farmers Electric Cooperative based in Anadarko, Oklahoma.

Reliability You Can Count On

While fuel sources have unique characteristics, they also have limitations. Natural gas supplies can be affected by severe cold weather or pipeline constraints. Wind and solar are variable by nature. Hydro power, while reliable, can be limited by water availability and seasonal variations. Coal requires consistent fuel delivery which can be impacted by rail or supply chain issues. However, when fuel sources work together, they back each other up. This crucial balancing act keeps the lights on during winter storms, heat waves and unexpected challenges such as fuel disruptions.

As an example of balancing resources to keep the lights on, KAMO Power, a generation and transmission cooperative based in Vinita, Oklahoma, retains fuel oil storage at natural gas power plant sites for emergency situations. In extreme cold events, if natural gas supply is disrupted, KAMO can tap into fuel oil to ensure members keep their homes and businesses heated.

Ted Hilmes, CEO of KAMO Power, says the cooperative invests in forward-thinking measures like this one to keep the lights on, but points out that reliability comes at a cost.

“Our priority is to serve our members safely, reliably and affordably,” Hilmes said. “By having access to a mix of generation resources, we are able to take advantage of opportunities in extreme conditions to make the best, cost-effective decisions on behalf of our members.”

Protecting our Members’ Pocketbooks

The generation and transmission cooperatives – or G&Ts – that serve the distribution electric cooperatives in Oklahoma have generation assets in the form of physical power plants as well as power purchase agreements (long-term contracts). All G&Ts utilize a broader energy market where utility groups share power every day.  Electric cooperatives balance their own generation and what is most affordable at the energy market to make decisions that result in the most reliable and affordable power for the communities they serve.

Fuel prices can fluctuate significantly. Diversity of fuel sources allow electric cooperatives to maximize affordability by having the ability to tap to the lowest cost generation in a given time.

For example, during extreme winter conditions, the cost of natural gas can rise exponentially, however, energy from coal or renewable generation during winter peaks can help offset higher costs of natural gas.

“Our approach is to utilize the resources we have in our region to make the most cost-conscious decision for our members,” said Kari Hollandsworth, CEO of Golden Spread Electric Cooperative based in Amarillo, Texas. “The energy market is like a giant pool and utilities are constantly drawing from the pool. We need to keep pool levels stable and benefit from the economies of scale it provides.”

Electric cooperatives not only plan to meet today’s power needs, they must have contingency plans and have generation that exceeds their forecasted power supply to protect members from scenarios such as power plant outages, fuel disruptions, congestion on transmission systems and extreme weather. While there is a cost to keeping these reserves, the investment is crucial to ensure electricity is reliably delivered to members no matter the circumstances.

A diverse energy mix acts like a safety net, allowing cooperatives to rely on other resources when one fuel becomes too expensive. By maintaining a diverse portfolio including coal, natural gas and renewables, co-ops can shield members from market swings and provide cost stability.

Members at the end of the line rely on their electric cooperative to deliver safe, reliable and affordable power. Your co-op relies on a balance energy mix to fulfill that mission, just like that recipe for a perfect cake.

Baking up new generation

The generation and transmission cooperatives that serve Oklahoma’s distribution electric cooperatives have several new generation construction projects to ensure they are appropriately responding to projected load growth.

This is what they’re currently baking up:

Golden Spread Electric Cooperative building  a new gas unit for a total additional capacity of 200 MW in Abernathy, Texas.

KAMO Power/Associated Electric Cooperative building a new gas power plant, the Ripley Energy Center near Stillwater, Oklahoma for a total additional capacity of 445 MW with additional natural gas plant construction coming in the next few years.

Western Farmers Electric Cooperative building new gas units in Anadarko for an additional generation capacity of 100 MW, and the Skeleton Creek Project with 250 MW of wind, 250 MW of solar and 250 MW in battery storage with additional natural gas generation coming in the next few years.