Winter Quarter Ener Com. A Publication of Western Farmers Electric Cooperative

Transcription

1 Winter Quarter 2013 Ener Com A Publication of Western Farmers Electric Cooperative 1

2 Winter Quarter, 2013 Volume XVI, No. 3 Western Farmers Electric Cooperative P. O. Box 429 Anadarko, OK (405) Gary R. Roulet...Chief Executive Officer Brian Hobbs...VP, Legal & Corporate Services Mark Faulkenberry...Manager, Mktg. & Comm. Sondra Boykin, CCC...Editor Mark Daugherty, CCC...Writer, Photographer Maria Crowder...Writer, Photographer Kansas Northwestern Alfalfa Kay Oklahoma Cimarron New Mexico Farmers Kiwash Northfork Harmon Southwest Rural Caddo Cotton Oklahoma Rural East Central Oklahoma Canadian Valley Kiamichi Roosevelt County Texas Red River Valley Rural Southeastern Choctaw Lea County Central Valley 2

3 Wind energy industry growing throughout the United States HHarnessing the wind appears to be a mounting trend as this renewable source of energy continues to make a worldwide impact by growing at a healthy pace in recent years. In fact, growth was 30 percent on average for the past five years, expert sources report, helping the United States serve as a major market for wind energy. The adoption of wind energy, on a global basis, has changed dramatically since the 1980 s when California was home to 90 percent of the world s installed wind energy. In fact, the amount of operating wind energy capacity has increased more than 16 times between 2000 and 2012, according to the American Wind Energy Association (AWEA). Many states have followed suit with this trend in the past 10 to 12 years, bringing jobs, investment, development, new business and clean wind energy generation across the country. Every state in the United States has either an operational wind energy project or a wind-related Red Hills Wind Farm manufacturing facility, or both, according to AWEA. Nearly 900 utility-scale wind projects, representing over 60,000 megawatts (MW), are installed across 39 U.S. states and Puerto Rico. There are also 559 wind manufacturing facilities spread across 44 states, according to the AWEA Story & Photos website. by Sondra Boykin Oklahoma has certainly kept up with this technology and is currently ranked 6th in the United States for total MW installed, with 3,134 MW, as of Blue Canyon Wind Farm mid-june of this year. Oklahoma also ranks 7th for number of utility-scale wind turbines, with 1,712 turbines installed throughout the state as a part of 29 wind projects. Oklahoma does not currently have a renewable portfolio standard (RPS) in place. New Mexico ranks 19th for total MW installed, with 778 MW. New Mexico also ranks 17th for number of utility-scale wind turbines, with 575 turbines installed in 11 wind projects. New Mexico passed an RPS in 2007, requiring utilities to generate 20 percent of their 2020 sales from renewable resources. Prices for wind energy purchases have decreased over 80 percent since 1980, according to Energy Informative (Continued on Page 4) 3

4 Wind Industry (Continued from Page 3) sources. Thanks to technological advancements and increased demand, prices are expected to continue decreasing in the foreseeable future. WFEC - A Strong Supporter Western Farmers Electric Cooperative (WFEC) has been a supporter of wind energy for more than 10 years. Signing the state s first power purchase agreement (PPA) with a wind farm developer in 2003, WFEC entered the wind industry with a purchase of MW from the first phase of the Blue Canyon Wind Farm, northwest of Lawton. Since this time, WFEC has added purchases from three additional wind farm locations, with two more agreements under way, including one to be online in 2015 and another (consisting of two projects) that is currently under construction in New Mexico. The Wildcat Wind Farm in New Mexico will also be included in WFEC s nameplate capability in All of these purchases are made through long-term PPAs. The nameplate capability from these five existing sites totals 393 MW. With the addition of the 118 MW that are included in the two latest PPAs, the output being purchased by WFEC from all eight projects will total a 511 MW nameplate rating, once the new projects are complete. 4 Rocky Ridge Wind Project WFEC continues to support additional wind resources, but also believes a blend of all fuels (renewable, coal, natural gas and nuclear) supports stable, affordable electric rates for consumers, explained WFEC CEO Gary Roulet. This percentage of wind power within WFEC s annual energy base is also well in line with potential future mandates that will require a certain percentage of energy be from renewable sources. Wind is an important part of WFEC s diverse mix of generation, and plays an integral part in our overall commitment to renewable energy, as well as enabling the ability to reduce fossil fuel emissions, commented Roulet. Meeting the needs of 22 distribution cooperatives and Altus Air Force Base, in addition to playing an active role in technological advances aimed at reducing carbon, are essential in meeting future WFEC goals, he added. Overall, the output from the existing five wind facilities represents between 15 and 17 percent of WFEC s energy mix, with the remainder consisting of coal, natural gas and hydro. WFEC does not currently retain or retire all of the environmental attributes with these wind power purchases, nor is this energy considered capacity. A portion of the Renewable Energy Credits (REC) produced by these wind generating facilities are sold on a retail basis Buffalo Bear Wind Farm

5 to WFEC cooperative members through the WindWorks program, with the remaining RECs sold at the wholesale level to third parties. Wildcat Wind Farm New Mexico Latest Oklahoma REPA Most recently, WFEC has signed a Renewable WFEC Wind Farm Power Purchase Agreements Blue Canyon Wind Farm MW Location: Near Lawton, Okla. - spreads over the Slick Hills in parts of Caddo and Comanche counties (southwest Oklahoma) Size: 45 Vestas 1.65 megawatt turbines (Phase 1 of project) Owner & Operator: Horizon Wind Energy Began commercial operation in December 2003 Buffalo Bear Wind Farm MW Location: Near Buffalo, Okla. - Harper County (northwest Oklahoma) Size: 9 Suzlon 2.1 megawatt turbines Owner & Operator: Edison Mission Group Began commercial operation in December 2008 Red Hills Wind Farm MW Location: Near Elk City, Okla. - spreads across 5,000 acres in Roger Mills and Custer counties (western Oklahoma) Size: 82 Acciona 1.5 megawatt turbines Owner & Operator: Acciona Energy Began commercial operation in June 2009 Rocky Ridge Wind Project MW Location: Near Hobart and Rocky, Okla. - spreads across 18,000 acres in Kiowa and Washita counties Size: 93 General Electric 1.6 megawatt turbines Owner & Operator: Enel Green Power North America Began commercial operation in June 2012 Wildcat Wind Farm - 27 MW* Location: Near Lovington, New Mexico Size: 13 Suzlon turbines Owner & Operator: Exelon Began commercial operation in July 2012 *Lea County Electric Cooperative (LCEC) Generation, LLC currently purchases the energy produced by Wildcat. The nameplate capability of the Wildcat site will be included in WFEC s total in Note: WFEC does not retain or retire the environmental attributes of the energy generated by wind facilities, nor is this energy considered capacity. Energy Purchase Agreement (REPA) with Apex Clean Energy, through its subsidiary Balko Wind, LLC, for 100 megawatts (MW) of wind energy from Apex s Balko Wind Project. With this agreement, Apex has sold the remaining 100 MW of the 300 MW capacity project, which will produce enough electricity to power over 110,000 U.S. homes. The project is expected to come online in 2015 in Beaver County, located in the Oklahoma panhandle. We are pleased to begin our relationship with WFEC, which will help bring this energy to Oklahoma homes and businesses, said Apex President Mark Goodwin. For WFEC, this new site represents the fifth wind farm development in Oklahoma that is a part of a solid, ongoing commitment to diversify WFEC s portfolio of generation sources. The generation and transmission cooperative is also participating in the development of wind farms in New Mexico. Latest New Mexico Agreement BayWa r.e. Wind, LLC recently announced it has entered into a purchase and sale agreement with community-wind developer, National Renewable Solutions, to acquire the development assets for the Broadview Wind Projects in New Mexico. The two projects with a combined 19.8 MW capacity, comprising 3,600 acres in Curry County, N.M., south of the City of Grady, will each sell (Continued on Page 6) 5

6 Wind Industry (Continued from Page 5) power over the next 20 years to WFEC. This wind farm site is in the service territory of Farmers Electric Cooperative, a member of WFEC. Farmers Electric Cooperative s (FEC) Board of Trustees and management have a long history of interest in the development of renewable energy projects on the Cooperative s system. Challenges to development have been primarily the cost of energy produced to the membership, said FEC General Manager Lance Adkins. We believe this project will benefit FEC members by reducing wholesale energy cost volatility caused by natural gas and the uncertainty of future impacts on resources that burn coal, he added. Consisting of twelve 1.65 MW V82 Vestas turbines, the projects started construction in the fourth quarter of The projects will participate in a payment in lieu of taxes (PILOT) program benefitting the City of Grady and public schools in Curry County on a 20 year basis. With the expiration of the PTC fast-approaching, BayWa r.e. is pleased to have expanded its pipeline of late-stage acquisitions, said Florian Zerhusen, CEO of BayWa r.e. Wind, LLC, adding that we are continuously looking for sustainable projects to complement our pipeline and are in the position to successfully complete late stage projects. We are looking forward to working with the communities of Grady and Curry County. Officials from Apex Clean Energy and WFEC met recently at the corporate headquarters to finalize a wind purchase agreement. Shown from left are: Steve Vavrik, Apex COO; Gary Roulet, WFEC CEO; Mark Goodwin, Apex president; and Richard Ross, WFEC risk management manager. Commenting on the deal, National Renewable Solutions President Patrick Pelstring stated, We are delighted to be working with BayWa r.e. s strong development team and look forward to seeing the project move quickly into construction. In accordance with BayWa r.e. s custom of naming projects after well-known composers, the project has been named Brahms Wind, LLC after German composer Johannes Brahms. wfec GUESS WHICH HOUSE HAS BETTER INSULATION IN THE ATTIC. Effective insulation keeps heat from getting to your roof. Find out what you can do at TogetherWeSave.com. 6 Cooperative and wind farm personnel (from left) Lance Adkins, FEC general manager; Thom Moore, FEC director of member services; Chris Copeland, project manager, BayWa; and Michael McCord, FEC engineering coordinator, are shown by a wind turbine hub as the Brahms Wind project gets under way in New Mexico. (Courtesy Photo)

7 Enjoy the wonder of Christmas We know all too well that Oklahoma weather is often difficult to predict. The Christmas season is no different. It may be very cold, or it may be snowing. While at other times, it is warm enough to wear shorts. Regardless of the weather though, it will be Christmas. And, we will all wonder where the time went during 2013 as the period between Christmas seasons passes so quickly. This is one of those years where WFEC holidays fall during the week, with Christmas Eve and Christmas Day on Tuesday and Wednesday. In this case, some employees will take off Monday or Thursday and Friday, or all, to spend more time with family during the holiday season. Even though the time right before Christmas is one of the busiest of the year, the season itself never ceases to be enjoyable. I suppose, no matter how old you are, it awakens the inner child in each of us. Many have Christmas traditions that continue from year to year; while others do the best they can to get through the holidays. Regardless of how each of you and your families view the season, I truly hope each of you enjoy this special time of the year. Whether you are working, traveling or at home, make the most of the time you have together with your friends and families. Pass along just a little of the wonder of the Christmas season to everyone around you, while also remembering those who are less fortunate. To each of you, I wish a very safe and Merry Christmas season and a wonderful

8 Mooreland Unit Two overhaul nearing January completion You don t see many 1968 cars on the highway these days. Today, you are more likely to find those classics at a car show. But, unlike the seemingly cyclic obsolescence of automobiles, WFEC is still getting good use from its older generation units. This includes the gas-fired Unit Two built in 1968 at Mooreland. Unit Two has been a dependable source of electric power for over four decades. But keeping a power generator performing at its peak requires a disciplined routine maintenance plan. The lead on the Unit Two overhaul is Senior Generation Engineer Kevan Riley. Years of experience have taught him to be ready for anything when you take the lid off a turbine. This routine inspection is completed based on the number of run hours that is recommended by the original equipment manufacturer, Siemens. There is a parts list to inspect and a scope of work with each part. The list for this overhaul included inspections of the HP/IP turbine, the LP turbine, overhaul of the unit s valves, inspection of the generator, overhaul of the circulating water pumps and routine boiler work. The processes of inspection vary from part to part. Some metallurgical testing was done on the HP/IP turbine parts. Most of the seals were replaced throughout LP and HP/IP turbines. The main oil pump was removed for shop inspection. Cracks were found in the HP/IP turbine inner case. These cracks were evaluated and repaired per Siemens recommendation. We conducted a warranty inspection on the generator, Riley explained. It had been two years since we performed a major overhaul, rewind and restack of the core iron in the generator. 8 The original plan for the turbine valves was to replace valve seats and plugs; but once workers were into the valves, cracks in the metal were found that needed additional Story & Photos by Mark Daugherty repair. Valve bushings were found out of tolerance and additional machining was completed on those. With any unit outage, you will see hundreds of disassembled parts organized and arranged around their respective components on the turbine floor. It is a tribute to the WFEC plant personnel and contract WFEC Senior Generation Engineer Kevan Riley looks over work performed on the HP/IP Unit Two turbine during the recent maintenance outage at Mooreland. workers that it all gets reassembled with no parts left over- and works! Several stories above Unit Two s generator floor, personnel performed routine inspection on the boiler tubes. Several tubes were cut out and replaced. In addition to the turbine and boiler work, the circulating water pumps had been in service since the unit began operation, nearly 46 years ago. The

9 Workers from Siemens perform maintenance tasks on Mooreland Unit Two during a routine inspection. This inspection is completed based on the number of run hours that are recommended by the original equipment manufacturer, Siemens. pumps were in really good shape, relatively, considering they had been running that long, Riley observed. They did need substantial work. We removed the corroded pump can areas, relined the pumps, and recoated them. Once the pump repairs were complete, we regrouted and replumbed the bases and reseated the pumps back into their original holes. Riley stated that turbine technicians from Seimens, did excellent work. He also cited TEI technicians for their work on Unit Two s boiler, and epumps for the refurbishing of its recirculating water pumps. Mooreland s Unit Two is expected to return to operation in early January wfec There are literally hundreds of parts to be inspected during a maintenance outage. Work is expected to be completed on Unit Two at Mooreland in January

10 EPA listening sessions allow comments from industry staff Practicality and flexibility have continually resonated as key points of consideration in proposed regulations aimed at existing power plants. These points were among those discussed recently when Oklahoma utility officials had a chance to voice their opinions on future carbon regulations for existing units during an Environmental Protection Agency (EPA) public listening session in Oklahoma City. Gary Roulet, chief executive officer of Western Farmers Electric Cooperative (WFEC), was among those speaking during this listening session. The EPA is hosting these meetings around the country to solicit ideas and input from the public and utility industry officials regarding the best approaches to reducing carbon pollution from existing power plants. Among the other utilities taking part from across the state, included Oklahoma Gas & Electric, Oklahoma Natural Gas, Public Service Company of Oklahoma, Oklahoma Municipal Power Authority, and the Grand River Dam Authority. We believe the cost to consumers (both residential and commercial) needs to undergo significant consideration in future proposed plans for carbon control from existing plants, Roulet noted in his comments. They need to be practical, proven, flexible and safe, while keeping electric consumers bills in mind, he added. In 2014, he pointed out, coal generation will represent slightly over 30 percent of member-owner sales; however WFEC s coal asset continues to carry over $200 million in debt. Any combination of additional coal debt, write down of this debt or amortization as a stranded asset, will have a significant negative impact on member-owner electricity costs. Replacement of the asset at the same time will doubly impact electric rates, Roulet explained. He also discussed voluntary actions that have been taken by WFEC over the past several years. In an effort to operate more efficiently and keep electric costs down, WFEC has added over 500 megawatts (MW) of renewable energy; has reduced coal generation; increased gas generation; and generated less as a company and purchased more energy from the marketplace, Roulet said. Story by Sondra Boykin Significant load management options, as well as efficiency programs promoting ground source heat pumps, have also played a large role in carbon reduction efforts. The Touchstone Energy Cooperatives are sponsoring events aimed at an increased awareness of geothermal technology. With potential pressures of rising utility costs in the near future, the advancement of geothermal technology is quickly making this option very viable for many homeowners, who may be interested in making a change. There are also currently incentives, both federal and on a local/regional level, available for energy efficient geothermal installations. WFEC also partnered with the Oklahoma Association of Conservation Districts, the Oklahoma Conservation Commission and Oklahoma State University on a verifiable carbon sequestration pilot program, beginning in This milestone arrangement, involved the purchase of carbon sequestration offsets generated by changes in farming and ranching practices by landowners in selected areas. It also served as a test model for the development of a statewide program. With a commitment of being good environmental stewards, WFEC was proud to be a part of this program, which was the first of its kind in Oklahoma. We believe any future proposed rules should include all of these types of solutions, as well as grant credit for already implemented programs, before additional requirements are imposed, Roulet noted. WFEC, as well as other utilities taking part in the Oklahoma EPA listening session, have indicated that compliance should not begin until state plans are either approved and/or no earlier than Also, it appears to be a consensus that states should be given as much (Continued on Page 16) 15

11 EPA Plans (Continued from Page 15) flexibility as possible in establishing their programs, as a single plan does not necessarily fit everyone. The EPA should not make a one size fits all plan, as all states are different, according to industry officials. Other factors discussed by Roulet during his presentation included: *Separate emission standards should be considered for different fuels such as coal and natural gas. *Conflicts between New Source Review and greenhouse gas reduction should be minimized. *Carbon capture and storage should not be required on existing units. *Applying current social costs of carbon to existing power plants doesn t seem to make sense, nor be fair. As for background on WFEC, Roulet told the audience that we are owned by 22 distribution cooperatives that serve approximately 350,000 member-owner consumers in rural Oklahoma, Kansas, Texas and Eastern New Mexico. The definition of the cooperatives service territories is truly rural with an overall density of less than five consumers per mile. Many of these rural areas also have an overall income level up to 20 percent less than the national average, he noted. NRECA Viewpoint In early November, NRECA CEO Jo Ann Emerson made the following statement regarding the EPA listening sessions. This week (Nov. 8), the EPA held its final listening sessions even as it begins drafting regulations to limit carbon dioxide emissions from existing power plants. I am extremely disappointed the Agency chose not to hold a single one of its listening sessions in electric cooperative service territory or other rural location, forcing our members to drive significant distances to attend and offer their views. Not-for-profit, member-owned electric cooperatives serve 42 million Americans and cover nearly 75 percent of the nation s land mass. The electric cooperative perspective deserves to be heard. Regulations limiting CO2 emissions 16 from coal-fired plants will likely have a disproportionate impact on the bills of cooperative consumer-members because, for a variety of historical reasons including the Fuel Use Act, cooperatives rely more heavily on coal than the broader utility sector. Sixty percent of cooperative power sales go to residential members, and the average income of coop served households is nearly $9,000 below the U.S. average. As cooperative owners, these consumers will foot the bill for any regulation that increases power costs. For all these reasons it behooves EPA - a public agency - to tour rural America and listen to cooperative members as it proceeds down a path toward CO2 regulation. wfec

12 Touchstone Energy Cooperatives SKIE award recognizes innovation An Oklahoma City high school teacher whose teaching career spans nearly four decades is the winner of the 2013 Touchstone Energy Cooperatives Supporting K20 Innovative Educators (SKIE) Award, which recognizes teachers who are effectively leveraging technology to enhance student performance in the classroom. I m thrilled, over-the-moon happy, said Vickie Kastl, an English III teacher at Santa Fe South High School. I m having more fun than ever. It s very rewarding, both personally and professionally, to receive this type of recognition for doing something I love. The award was announced during the 17th annual K20 Innovative Learning Institute on Dec. 3 in Norman. Kastl was one of six regional winners from across the state who was up for the honor. As the statewide winner, Kastl received a $1,500 prize and a $2,500 technology grant for her school, both of which were made possible by Oklahoma s Touchstone Energy Cooperatives. She also received a $500 award for being selected as a regional winner for the Central Region. Other regional winners, who also received a $500 award, included: *Northeast Region - Mary Hardesty, Turkey Ford Elementary, Wyandotte *Northwest Region - Lori Mayden, Newkirk High School, Newkirk *Southeast Region - Tammy Parks, Howe High School, Howe Middle School, Howe *Southwest Region - Kent Hathaway, Mustang Elementary School, Mustang *Tulsa Region Greg James, Oneta Ridge Middle School, Broken Arrow Touchstone Energy Cooperatives this year partnered with the University of Oklahoma s K20 Center and the Story by Patti Rogers, OEC Photos by Anna Politano, OAEC Western Farmers Electric Cooperative Manager, Marketing & Communication Mark Faulkenberry (left) and Oklahoma Electric Cooperative s Patti Rogers (right) recognize Vickie Kastl of Santa Fe South High School in Oklahoma City as the overall statewide SKIE Award winner during a recent luncheon. The Touchstone Energy Cooperatives of Oklahoma gave away SKIE Awards for six innovative teachers representing each region of Oklahoma. Jeannine Rainbolt College of Education to fund the annual awards program. According to Warren Langford, CEO of Cotton Electric Cooperative in Walters, and a member of the national Touchstone Energy board, the intent of the awards and grants is to acknowledge the strides Oklahoma teachers are taking to embrace technology and to elevate the voice of innovation in the classroom. Learning environments aren t revolutionized by installing a few cool gadgets here and there, Langford said. Far more important is the educator s role in employing today s technologies to make material accessible and engaging. In a small way, this award (Continued on Page 18) 17

13 SKIE Awards (Continued from Page 17) recognizes those who are going the extra mile to ensure today s youth are prepared to navigate in the digital world. Kastl, who happens to be a member of Oklahoma Electric Cooperative in Norman, is actually in her second teaching career. She taught art and English in Yukon Public Schools for 33 years, retiring in 2008 to work in private business. I thought I wanted a job without baggage, where I could go home at the end of the day and leave it, but it wasn t my calling, Kastl recalled. She joined the faculty at Astec Charter High School for three years before transferring to Santa Fe South where most students are primarily Spanishspeaking and from low-income homes. For the first four weeks, I didn t think I was going to make it, Kastl said. Until they heard my story, and learned that my parents and grandparents were immigrants, I grew up on a farm and my parents pushed education to ensure a better life for me. And the connection was formed. After receiving the SKIE award, Kastl got further validation of the impact from her teaching. Three girls walked up to me at different times and asked, Do you Those receiving SKIE Awards from the Touchstone Energy Cooperatives of Oklahoma included (front row, from left) Vickie Kastl of Santa Fe South High School in Oklahoma City, Central Region; Tammy Parks, Howe High School and Middle School, Howe, Southeast Region; Mary Hardesty, Turkey Ford Elementary, Wyandotte, Northeast Region; (back) Greg James, Oneta Ridge Middle School, Broken Arrow, Tulsa Region; Lori Mayden, Newkirk High School, Newkirk, Northwest Region; and Kent Hathaway, Mustang Elementary School, Mustang, Southwest Region. These six innovative teachers represent each region of Oklahoma. remember me? Each was a former student who had gone on to become a teacher. That was the best thing that could have ever happened to me. When someone says, I m a teacher because you influenced me, you know you ve done something right. wfec 18