March 2010

Electric rates on the rise because of environmental policies, economy

Environmental policies and a downturn in the economy are beginning to impact the cost of wholesale power, which has a direct effect on your electric bill.

A recent law in Minnesota will require 25 percent of your electricity come from new renewable sources. Our existing hydroelectric plant (14 percent of Minnkota’s available resources) cannot be counted as part of this mandate. Minnkota Power Cooperative (MPC), North Star’s G&T (generation and transmission co-op), has secured the mandated wind power, but there are strings attached. We MUST buy all of the more expensive wind power these turbines can generate, regardless if we need it. The excess is sold on the market.

The economy has since led to a decline in demand for electricity, so there is a surplus on the market. The current market price Minnkota is receiving is about 2 cents less per kWh for an estimated 1.5 billion excess kwh’s Minnkota sells on the open market, and this creates a significant financial burden on Minnkota.

This situation won’t always be the case, which is why the one-half cent increase beginning in October 2009 will be listed as a separate line item.

The second environmental factor is permanent and a requirement by the Environmental Protection Agency (EPA) to install another scrubber on the coal plant at Center, N.D. Have you been on our power plant tour to Center? If not, you should get a spot on the next bus to see how clean the air already is out there. Nonetheless, the EPA mandated Minnkota to add nearly $400 million of additional environmental control equipment, which will also require $20 million of additional chemicals annually to operate. As a comparison, these two plants originally cost $250 million to build, with $50 million of that being environmental costs. This EPA mandate will cost you more than a half cent per kwh—more than the Temporary Wind Energy Surcharge.

Even more discouraging news is that this may not be the end. A good number of folks in Washington DC have been attempting to pass a carbon tax/global warming/climate change bill. This could have an even more significant impact on your bill. This has met resistance, so the EPA is stepping in to control the situation by labeling Carbon Dioxide as a greenhouse gas, with plans to regulate it themselves. PLEASE contact your federal legislators to tell them how YOU feel about what is going on with your electric bill. Tell them they need to step up to prevent the EPA from using the Clean Air Act as a tool for reducing greenhouse gas emissions. The Act was never intended nor designed to deal with climate change. It is the role of Congress to legislate greenhouse gas policy that is fair and affordable for all Americans.

Do we sound exasperated? We are! Our mission is to bring you affordable, reliable energy, but new laws that target the Midwest and leave coastal states like California nearly unscathed, are making life as you and I know it even more difficult. Please DO conserve electricity and other resources. To assist in the carbon fight, plant trees as long as they aren’t under the power lines. This is Our Energy/Our Future, and your help is appreciated! http://www.ourenergy.coop