benefit all members Development to By Chris Gessele and Tammy Langerud Lonesome Creek Station

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1 Development to benefit all members By Chris Gessele and Tammy Langerud With all of the news headlines about rapid growth and increased activity coming out of the Williston Basin, it s natural to feel like everyone s attention is on the oil boom. Basin Electric is indeed working with member cooperatives to ease growing pains in western North Dakota and eastern Montana. After all, more than 1,600 megawatts (MW) of Basin Electric s projected load growth of more than 1,883 MW is forecast to come from the Williston Basin. It s significant, but with members spread across nine states, that region is not Basin Electric s sole area of focus. The cooperative s current generation and transmission projects are being built to serve all of its members and their 2.8 million customers. Below is a rundown of a few of those projects, followed by snapshots of member-owners who depend on the reliable electric service Basin Electric and its member cooperatives tirelessly work to provide. Lonesome Creek Station Lonesome Creek Station, a 45-MW natural gas-based peaking station west of Watford City, ND, started commercial operation of Unit 1 in December 2013, and construction of two additional 45-MW units Phase II is targeted for completion in late Construction on Phase III at Lonesome Creek is slated to begin in late spring 2015 after acquiring state and local 6 Basin Today

2 permits. Phase III will consist of the addition of three 45-MW combustion turbines. Like the existing unit and two units currently under construction, the planned units will utilize a dry low-emission combustion process. Dry indicates the process will not utilize water for nitrogen oxide emission control. Completion of units 4 and 5 are targeted for June Pioneer Generation Station Pioneer Generation Station, a natural gas-based peaking station northwest of Williston, ND, started commercial operation of Unit 1 in September The plant s Unit 2 started commercial operation in February 2014, and Unit 3 started commercial operation in March Each unit has 45 MW of generation capacity, giving the station a total rating of 135 MW. Construction on Phase III at Pioneer Station is slated to begin in late spring 2015 after acquiring state and local permits. Phase III will consist of 112 MW of additional peaking capacity. The additional generation will be provided by MW natural gas-based reciprocating engines. Pioneer Station s three existing units utilize LM 6000 water-injected simple cycle combustion turbines. Completion of Phase III is targeted for June Combined Cycle Basin Electric is currently examining the possibility of building a high-efficiency combined cycle natural gas-fueled plant, with two turbines fueled by natural gas and a third powered by steam generated by the first two turbines. Potential sites are being examined in Emmons and Morton counties in North Dakota. Engineering studies are being performed to determine technology alternatives and project-related infrastructure requirements. If pursued, the plant would need to be in service by AVS to Neset Transmission Project Basin Electric will construct, own and operate a new 345-kilovolt (kv) transmission line and associated supporting infrastructure. The entire project will consist of constructing approximately 200 miles of new single circuit 345-kV and double circuit 345/115-kV transmission lines, the construction of two new substations, modifications to three existing substations, river crossings, temporary construction staging sites and other facilities. The project will be located in portions of Dunn, McKenzie, Mercer, Mountrail and Williams counties in western North Dakota. Construction has started on the AVS to Judson transmission line and AVS, Charlie Creek and Judson substations as part of the AVS to Neset project, according to Amanda Wangler, Basin Electric project manager II. Completion of the AVS to Judson line and associated substations is targeted for Oct. 31, North Killdeer Loop (NKL) The NKL project was added as part of the AVS to Neset transmission project due to the significant load growth projected in McKenzie County. The NKL project includes 60 miles of 345-kV transmission line and three substations that will deliver power into member cooperative McKenzie Electric Cooperative s service territory. The NKL project would be permitted in two phases, with the first 28-mile phase siting application scheduled to be submitted in fall of 2014, with construction to begin by mid-2015 after acquiring all state and federal approvals. The NKL project is scheduled to be operational in late Serving those at the end of the line Basin Electric s focus is the person at the end of the line. Those member-owners are the reason the cooperative exists. Basin Electric, a generation and transmission (G&T) cooperative, does not sell electricity directly to consumers. Control and direction of the cooperative begins with member-owners who support the seven cooperative principles and are governed by the cooperative business model. Basin Electric s 11 directors are elected by the cooperative s members. These directors have been elected to the boards of their local distribution systems and then, with the exception of Districts 9 and 10, to their respective intermediate generation and transmission systems. Many of Basin Electric s Class A members are generation and transmission electric cooperatives. The following profiles highlight Basin Electric members and members of their respective distribution cooperatives. Those cooperatives are served by intermediate generation and transmission cooperatives, which in turn are served by Basin Electric. November - December

3 Tom Pearson, controller at Gooseneck Implement, Minot, is a member of Verendrye Electric Cooperative, Velva, ND. Retired ranchers Le Roy and Twila Dean, Belle Fourche, SD, are members of Butte Electric Cooperative, Newell, SD. Le Roy and Twila Dean How important is a reliable electrical system to you? Le Roy: Oh, it s very important. If you re out of electricity you re at a standstill. Twila: First thing we re out of is water because we have a well. Le Roy: And the heat system is electric. Twila: We bought a generator because we are on electric heat, and you don t want to be caught in the middle of the winter without heat. What are your first memories about getting electricity? Twila: My folks lived north of Phillips, SD, and I think it was 1953 when we got power out there. I remember we had a waffle iron, but very few things that would run off from electricity. Just flipping that switch and having lights was really nice, that s the thing I remember more than anything. You didn t have the lantern or the lamp to clean, you just flicked the switch. Le Roy: It was probably one of the best things that happened to the rural area. I think we first got power in March in They were coming through setting poles. When we were married in 1961 if you bought a dryer or some big appliance the power companies would give away things like an electric skillet or a toaster to try to get people to use electricity. Now they re trying to conserve energy. Talk about your relationship with your electric co-op. Twila: When we were members of Southeast Electric we were without power one time for quite a few days. It was a spring storm and it broke poles right and left. The line crew stayed at our place that night because it was a long ways back to Ekalaka (SD). And we get good service with Butte Electric. If our power goes off, they are right on it trying to figure out why. Being members of a co-op is a good thing, and the profits go back to the people rather than to somebody else. Tom Pearson How important is a reliable electrical system to your home and business? If you can t count on your electric system, the community won t grow. And as we know, with what s going on in Western North Dakota, there s been an increase in population, not just in regard to people, but also the businesses coming in to our communities. And if we can t provide the need or provide the power that s going to be needed in the future from these businesses and people, we re not going to see the growth. Is there more to electric Just flipping that switch and having lights was really nice, that s the thing I remember more than anything. Le Roy Dean cooperatives than providing electricity? Yes. The perfect example relates to my work. We re building a new Gooseneck Implement dealership in Harvey, ND, and we partnered with Verendrye Electric to do a $1 million loan to help provide financing for it. Verendrye Electric and USDA (U.S. Department of Agriculture) are teaming together to provide us this loan that s making it more feasible for us to do this brand new building in that community. You know, they re not just looking at bringing in the power, they re part of our community, and Verendrye wants the communities they serve to have the ability to grow, and they re going to grow right with us. What else is compelling about your electric cooperative? Verendrye is a strong part of our community. They want us all to be part of their cooperative. They re willing to work with us and to provide services that we re going to need now and into the future. Plus, it s been an extremely stable power system that you can count on. It s nice to get up at 2 a.m., turn on the lights and there they are. You don t worry about it. 8 Basin Today

4 Elizabeth Redding, owner of Bloom in Color, a mobile floral business, is a member of Verendrye Electric Cooperative, Velva, ND. Darin Larson, a farmer near Baltic, SD, is a member of Sioux Valley Energy, Colman, SD. Darin Larson How important is a reliable electrical system to you? Electricity is crucial to our operation. For instance, harvest will be coming up and we re anticipating a wet harvest, which means we ll be drying corn in particular. Electricity is what powers the dryer and powers the augers, and as well as lights and incidentals. It s absolutely crucial to farming in the 21 st century. Reliability is crucial because if we don t have that power, the grain can t be dried, which then causes spoilage issues and transportation issues and affects the price and efficiency on the farm. And really, we take the reliability of electricity for granted. Talk about your relationship with yo ur electric co-op. I d have to go back to high school days, when I was a proponent of cooperatives and able to be on the National Rural Electric Cooperative Youth Advisory Board. We went to Washington, D.C., and learned more about our nation s capital as well as the role rural electric co-ops have played in our nation s history. I was able to learn a lot about the history and necessity for co-ops and how the electric co-ops, in particular, helped to build this state and fill needs that otherwise wouldn t have been filled. How do you feel being served by a cooperative may be different than another type of utility business? I favor the cooperative model because I think it s member-driven and its focus is on the needs of the members, as opposed to investor-owned operations, which have to be focused on the needs of the investors and serving the investors. You ve got competing forces in the corporations between the needs of the investors and needs of the customers, and you just don t have that pull in a co-op. The mission of the co-op I think is clear: to serve members above all. It means to me that I m part of the ownership and that my needs are being served by people who are focused on my needs and concerns. I take pride in being part of a co-op. Elizabeth Redding How important is a reliable electrical system to your business? It s extremely important. I have a floral cooler that has to remain at a specific temperature, and that has a lot of risks because of the way that I operate my business. My cooler is an enclosed trailer I retrofitted to be a floral cooler, and it sits outside in the elements. So when it s 90 degrees, I need to make sure my cooler is continually running to maintain a constant temperature because if, for some reason, my power goes out my flowers won t last very long. Also, because I have a full-time job during the day, I m not here to monitor everything all the time, so I need to be able to rely on constant power. Talk about your relationship with your electric co-op. My relationship with Verendrye, to be honest, has been short-lived. Before the flood [of the Mouse River in 2011], we were one of the only farmsteads outside of town serviced by another electrical provider. Unfortunately during the flood, the waters knocked down the electrical pole servicing our farmstead, and our electrical provider at the time wasn t able to get out here. They kept telling us, We don t know when we ll be able to get to you. We lived off of generators for a while, and Verendrye was the one that got us back and running, and got us off generators. It was really nice to have Verendrye to be so willing and eager to help us! How do you feel being served by a cooperative may be different than another type of utility business? I hate to place emphasis on just that one particular situation, but I think the flood really highlighted, for me, what I ve always thought of a co-op. And, that is community driven, the sense of family and the sense of support. During that situation, that s what my cooperative really gave me and really reinforced in me is that they are focused and consciously thinking about the community they re operating in and the members they re supporting and what s most beneficial for them. November - December

5 Retired law enforcement official Doug Pavel, who farms and raises boer goats near Whitewood, SD, is a member of Butte Electric Cooperative, Newell, SD. Doug Pavel How important is a reliable electrical system to your home and business? We re all electric here, and we don t have natural gas or cable or some of those other things that a lot of people take for granted. Our primary need besides our household is in January and February when the goats give birth. We re running a lot of tank heaters, and then when the little ones are born we re out there with hair dryers drying them off to keep their ears from freezing and using heat lamps to warm them up. Between the water tanks making sure they ve got constant water and the ability to keep those little critters warm, power is essential to us. What do you enjoy about being a member of a cooperative? They know you on a first-name basis, and that s the nice thing about belonging to a co-op. For example, the board s directors are your neighbors, your friends, your customers, you know them. It s not like you re calling some number somewhere where they don t even know where you are located. And being from my previous career with public safety, I can appreciate having to do a job in the worst of weather. If we lose power, we try to make it a point when everything is done to give them a call and thank them because they do a pretty darn good job. Is there more to electric cooperatives than providing electricity? I ve been on the credentials committee and I think I ll be on the credentials committee again this year. Being a part of a co-op is who you are, it s your business, it s your company. When they re talking about holding rates it s not just because they re trying to hold down rates for you as a customer, they re trying to because it s you, you re part of that organization. And listen to them. I have to confess I probably don t do as much homework as I need to find out what s going on with the rates and all the regulations. The EPA wants to shut down the coal power plants and I m not sure how they the people in Washington, and I m pro-government can shut down our power plants and provide us with reliable, dependable, inexpensive electricity. It doesn t fit in the same sentence or the same paragraph, anyway. If there s any message we get out to folks, pay attention to what s going on with these regulations because your cooperative needs your backing. Talk is cheap, getting action going is hard. We ve been to meetings at Butte Electric where they say, call your congressman, or sign up here and we ll send it for you to let your representative know that you re not for these regulations. Do your homework. That s all part of being a good member of the cooperative. 10 Basin Today