WILLMAR, Minn. — Serving just over 8,300 consumers in Kandiyohi County and small portions of Chippewa, Stearns and Renville Counties, Kandi Power Cooperative keeps growing despite shrinking farm numbers and a slowly declining total population base.
Dan Tepfer, a 20-year employee of Kandiyohi Power, shared some details during a Willmar Lakes Area Chamber of Commerce Ag Tour held on Sept. 30. He said his cooperative is one of more than 1,000 consumer-owned utilities in the United States providing power to over 30 million consumers in 46 states.
Yes, there is a nationwide network of electrical suppliers. Kandiyohi Power Cooperative is a distribution utility which means it sources power from a wholesaler — in this case, Great River Energy, a cooperative consisting of 28 distribution utilities such as Kandiyohi Power Cooperative. Great River Energy is a generation and transmission cooperative headquartered in Maple Grove, Minn. That means they run the generators to produce power and they own the transmission system to deliver that power to its customers — including Kandiyohi Power Cooperative.
Explained Terfer, “Kandiyohi Power has an ‘all power’ requirement contract with Great River Energy with an important exception. Our cooperative is part of WAPA (Western Area Power Administration) which runs the hydro-electric power dams on the Missouri River. WAPA distributes this energy to various power utilities such as Kandiyohi Power; but also other federal agencies and Indian reservations. We get an allotment of energy through the WAPA system. Yes, zero emissions from this system because it’s hydro-sourced. This is also labeled as renewable energy and makes up about 20 percent of Kandiyohi Power total energy needs.”
So is that 20 percent allotment a constant? No, it’s shrinking, said Tepfer, saying 20 years ago about 30 percent of Kandiyohi Power needs were supplied by WAPA. So what can Kandiyohi Power do about this shrinking piece of the pie? Little or nothing, said Tepfer, explaining Great River Energy continues to be the primary supplier of electrical power. But Great River Energy sources are changing also.
“In 2005, coal was providing about 80 percent of Great River’s energy needs,” Tepfer explained. “Today, that figure is 58 percent. However, the bulk of that shrinkage has been made up by renewable — both wind and solar. In 2005, renewables accounted for only 2 percent of Great River’s needs. In 2018, that figure was up to 25 percent. The state mandate imposed by the Minnesota Public Utilities Commission decreed 25 percent of Minnesota’s electrical power be provided by renewable sources by 2025. Kandiyohi Power through Great River met that goal seven years early!
“So where are we going in the future? Our basic mission is affordable, reliable electric energy. Our goal now is 50 percent by 2030. And how will that happen?” Tepfer explained that will happen through purchased power agreements with wind development firms, solar installers and multiple additional sources.
What’s growing the most rapidly? Said Tepfer, “Based on what we see at Kandiyohi Power Cooperative, solar is the big gainer right now. This has a lot to do with economies of scale, repairs and maintenance costs. On the local level, where an individual member of our cooperative is looking to generate his own electricity, those installations are predominately solar.”
Minnesota has a state 40-kilowatt net metering limit. “This has worked well in Minnesota. The utilities have adopted this limit even though we may not embrace it,” Tepfer cautiously commented. “And that is pure and simple business. Individuals can deduct their home-generated power from their monthly utility bill up to that 40 kW limit. That is why home owners — especially farmers — continue to install their own energy supplements.”
So how many Kandiyohi Power customers have gone that route? Obviously, Kandiyohi Power’s business success hinges on monthly kilowatt billings to its 8,100 customers, so Kandiyohi Power is not a big promoter of individual installations.
Tepfer commented, “At the 40 kW level, Kandi Power has somewhere in the vicinity of 35 renewable instillations. Not all 35 are farmers. These are individuals desiring to generate their own electricity in an environmentally correct manner.”
Economics is driving these individual hookups. And solar providers are good promoters. But Tepfer cautions that the economics aren’t always good. “Yes, there are USDA opportunities with REAP grants; accelerated depreciation schedules for tax credits; and other incentives can make a huge difference in the ‘pay back’ capabilities of these installations … and its different for everybody.”
However, Kandiyohi Power is now offering its members an affordable new way to purchase renewable energy. With cooperative’s Community Solar, members can purchase solar power without installing equipment on your property and without worrying about maintaining the system for $1,250 per one full panel output.
Tepfer indicated an increasing number of Kandiyohi Power customers ask about the environmental impact of power utilities these days. “I share that 15 years ago coal was the energy source for 80 percent of our power. Today we’re at 58 percent with hydro power, solar and wind constantly increasing energy volumes into our total system. Today, thanks to variety of sources, the electrical energy a Kandiyohi Power customer receives is 42 to 43 percent renewable. That 50 percent goal for our state by 2030 should be very attainable and we’re proud to play a role in that achievement.”
Based on Tepfer’s Sept. 30 power-point presentation, the latest customer count for Kandiyohi Power Cooperative is 8,316 members. Around 7,300 are residential. This includes small farms too. “Years ago Kandiyohi Power was predominantly an ag utility. Today, some of our biggest commercial accounts are ag related such as Meadow Star Dairy, a 8,500 cow operation just southwest of Willmar. Also, Jennie-O Turkey operations; Willmar Poultry; the Wilmar area Alfalfa Plant; and Hanson Silo just south of Willmar.”
So why the goal of 50 percent of Great River Energy’s electrical power being provided by renewable resources? Tepfer said this stems from continued scrutiny of emissions from coal-fired power plants and the associated costs of keeping within emission specifications. Yes, this is an environmental issue, but it is also dollar driven.
Is the oncoming popularity of electric cars an issue with Kandiyohi Power? “Yes, this has definitely become a discussion point within our own cooperative and the entire electrical power industry. I attend demand side management sessions hosted by Great River Energy. One of the discussion topics has been where and what are the new demands of electrical power. We all acknowledge that EV charging will increase electrical demand. But when will the big load hit our industry and when/how will we be able to meet this new demand for electrical power? The goal is to have this demand happen at night. We want to be ahead of the curve by offering great incentives to encourage that event. It makes more economic sense for everybody if we can manage that load and the customer sees an economic advantage by recharging their vehicles at night. It’s cheaper and that’s the bottom line.”
Current electrical costs through Kandi Power are ll.9 cents per kilowatt hour during June, July and August. During the other nine months, the cost is 9.9 cents/kWH. Why the higher summer time cost? It costs more to generate electricity in the summer said Tepfer. Great River Energy obviously passed their higher costs along to member utilities throughout the system.