Manager Message

Don L. Marker

 The Renewable Reality

Nearly half of the total generating capacity of our power suppliers will come from renewables by the year 2012. Specifically, about one-third from hydro-power, which is generated from the dams on the Missouri River. Basin Electric, our supplemental power supplier, will obtain 16 percent of its generating capacity from wind and other renewable sources. Your remaining power requirements will be supplied by carbon-based resources such as coal and natural gas.

Sioux Valley Energy supports renewable energy development to supplement existing base-load resources when and where it can be safely integrated into the cooperative's distribution system and cost-effectively blended into the cooperative's rate. Base-load generation, which is far less subject to interruption and provides you with electricity 24/7, needs to come from reliable, cost effective resources.

There are some realities that come with utilizing renewables such as wind and hydro-power. Even though those of us in the Midwest believe that the wind blows all the time...it doesn't. The intermittent nature of wind is an issue when it comes to reliability. Wind power also rarely produces 100 percent of its full generating potential at any given time. The average is actually between a 30 and 35 percent capacity factor.

The dams on the Missouri River were constructed in the 1940s and 1950s for uses beyond power generation. The primary purpose was for flood control and water supply/irrigation. Other functions of the dams are recreation, improved navigation, and fish and wildlife habitat. Hydro-power is an extremely efficient renewable resource and is a very steady, reliable (when there is no drought) and affordable source of electricity. The trouble is that there is limited opportunity for additional hydro-power because the likelihood of a new dam is virtually non-existent and we already receive an allocation of existing hydro-power.

So how will we continue to meet your electrical demand in the future, while being mindful of environmental issues? We are aggressively building the renewable portion of our power portfolio but we can't rely completely on water, wind, waste heat or solar for 100 percent of our electricity. We need to have a balanced mix of both renewables and traditional resources, which utilize fossil fuels such as coal and natural gas.

Coal continues to produce half the electricity used in the United States...and as I mentioned over half of your electricity as well. Coal is domestic, abundant, and relatively inexpensive. That is why Basin Electric is partnering with others to explore new technologies to use coal more cleanly and efficiently. In addition, Basin Electric has invested more than $639 million to operate its power plants in an environmentally sound manner. More than $82 million is required annually to operate environmental protection equipment at the Basin facilities. Each of Basin Electric's coal-based generating plants has an environmental coordinator who is responsible for environmental compliance and maintaining the plant's continuous emissions monitoring (CEM) system. Basin Electric and all its subsidiary facilities are also 100 percent environmentally compliant.

Sioux Valley Energy believes the key to your energy future depends on supplying affordable, clean energy to its members while continuing to explore new technologies for improving sustainability of resources. Sioux Valley Energy and its power suppliers are dedicated to building a balanced energy portfolio which includes renewable resources. Renewables can't be the only answer, however. Energy efficiency and conservation also need to play a significant role in reducing the need to build more base-load generation. This is why the board of directors approved the continuation of Project E2 to provide for a series of rebates and incentives to help members weatherize their homes, replace inefficient appliances and utilize efficient lighting such as CFLs and LEDs.