Transcript – Power For Your Life – Season 1 | Episode 13
Original release date: August 18, 2020
Hi, I'm Lisa and I'm so glad my co-op provides me safe, affordable and reliable electricity.
Darryll (Host): Welcome to the Power For Your Life podcast, where we focus on energy efficiency, the value of electric cooperative membership and safety around electricity. I'm Darryll Lindsey, your host. Today we have a special topic that is the first of four special episodes on what it takes to have a balanced power generation mix. These four special episodes will be released around the middle of the next four months. My guest today is Mark Viguet, senior manager of corporate communications for Associated Electric Cooperative in Springfield, Mo. Associated Electric Cooperative generates wholesale electricity to six regional and 51 local electric cooperative systems in Missouri, southeast Iowa and northeast Oklahoma that serve more than 910,000 members. Mark thanks for joining me today. Powering homes, farms and businesses in the rural Midwest is a point of pride for Associated Electric. If you would describe what all that entails.
Mark (Guest): Thank you Darryll. It's my pleasure to be with you today. And you know, it's really amazing to think about that if you're a member of a cooperative in Missouri, southeast Iowa or northeast Oklahoma, your electricity comes from Associated's power plants or some of its related generation sources. And it's really a true cooperative was in that we serve members-members like those listening today, and they comprise about 2.1 million people across the area that we serve. And you know, in this cooperative network-is how I like to refer to it-it's a bit unique because it's made up of three tiers and it's really a team effort providing that power all the way from a generating plant to someone’s home for them to use that power… a team effort. And when you look at that, you know there's a generation portion of that system that's Associated Electric. That's what we do. There's a transmission portion. And then there's a distribution portion which delivers that power all the way to the home. All of 'em important, and this is the real beauty of that three-tiered system. It's specialized in each of those tiers. We do generation at Associated, and we do that to the very best of our ability with a laser like focus. Similarly, the transmission cooperatives, the distribution cooperatives. They have a real focus on their tier, and in doing the right things in the right way for members. So we're proud of that three-tiered system. And we're proud of the value and the benefits it brings to members.
Darryll (Host): Let's talk about the governance of electric cooperatives. This design of how co-ops are governed is truly grassroots. Local people representing local ideas. Describe if you would how this design truly represents the electricity needs of local people.
Mark (Guest): When I think about each of those tiers that I just mentioned, it really comes down to one thing Darryll and that's member serving members. Because when you’re a member, and you are a recipient of the power, the services, the transmission, all the things that bring power to your home, your farm, your business. I mean, that is the essence of democracy, and elected representation, and that's what you have in the co-op system. It's a really differentiating principle of electric cooperatives, and it's one that we put into action every day at Associated and throughout the three-tiered system.
Darryll (Host): When we talk about a balanced generation mix for members, we're really talking about an unbiased mixture of electric generation resources. And when I say unbiased, I'm referring to three elements here, kind of like a three-legged stool. If you think about reliable, affordable, and responsible, each being a leg on that stool. Providing reliable power is expected by members and it requires different types of generation. So, Mark talk about the generation fleet that Associated Electric provides for members.
Mark (Guest): Well, the generation that Associated Electric--the electricity I should say--that Associated produces is varied, its diverse. It gives us options and I like to think of it this way. Balance is a good thing. When you think about balance in your life, think about a balanced diet. Even think about having your car tires balanced if they are out of balance. In balance is a good thing. Out of balance is a bad thing. And so-in so many ways our power generation is about balance. If you think about reliability, we have options. A number of different options for providing power. We have fossil fuels. We have wind power. We have hydro-power. We have the ability even to go off system and buy power if it's better for members and provide that portion of power that we're able to find that-that can benefit members. So, there's options out there. That really helps our generating reliability. Likewise, a secure transmission system helps that reliability. Affordability-we all know so many things come down to the pocketbook, right? And we realize that. It's a priority for Associated that we produce electricity just as affordably as we possibly can. And again, these options we have in generation allow us to match up member needs with generation resources that are the most affordable at the time that members need it. So, we try our absolute best every day to maintain affordability in the electricity that we provide. And finally, responsibility. That's about doing the right thing for the right reasons. That's in generation. That's in transmission. That's in all facets of Associated’s business. We want to do the right things for the right reasons. And we have, we think, an impressive track record of doing just that, doing it for members.
Darryll (Host): In recent surveys, members say that affordable electricity is very important in their daily lives. Let's take a short break and when we come back, Mark will talk about why money does really matter when it comes to Associated Electric’s generation fleet… when we return.
Darryll (Host): Energy saving tip number 84. Ensure windows and doors are properly weather-stripped and use door sweeps.
Darryll (Host): Back with more of the Power For Your Life podcast. Today's guest is Mark Viguet with Associated Electric Cooperative. Before the break, we were discussing how Associated Electric’s generating fleet is built on the premise of a three-legged stool--reliable, affordable, responsible. Each leg is important in the balanced mix and we talked about that reliable portion first. Mark talk about the importance of affordable electricity for members.
Mark (Guest): Darryll, you know that's something that we take very seriously at Associated Electric. Providing affordable power is absolutely a priority and has been since the inception of this generation cooperative in 1961. And that's because electricity, we know is needed by members 24 hours a day, seven days a week, 365 days a year. And as members ramp up their use, yes we want it to be reliable. The power has to be there when they need it. But we also have a strong goal of matching up members needs to the most affordable generating resource that can provide that electricity. In 2019, coal generation supplied about half of members needs. But low prices for natural gas really caused a change in 2019, and even thus far in 2020, in that the price of natural gas has been very low, which has enabled our significant natural gas generating fleet to produce electricity on a par or even more affordably than coal generation. So, we've seen a real uptick in the amount of electricity we provide the members powered by natural gas. And that's a good thing because again going back to balance and having options, we have the ability to do that because we have options. We can pick a lower priced electricity to provide the members when it's available. You know we have other resources too. Hydro-power is a resource allocated by the federal government that we take advantage of when at all possible, because that's our lowest cost of electricity is electricity provided through the federal government throughout our region. And finally, wind power is something that you know we've really invested in. We were the first utility to bring utility scale wind power to Missouri and to our system. That was some time ago now, ten years ago or so. And we are in the process of continuing to add wind generation resources to those options that we can use for members so. That's a very important part as well. So, I've mentioned coal, natural gas, hydro-power, wind. I've even mentioned, you know, the possibility that we could buy power off of our system if needed to supplement, and we do all that with affordability in mind.
Darryll (Host): The final leg of our stool is responsible electricity. Associated electric wants to be a good steward when it comes to the environment. In fact, through reclamation efforts from a mining operation many years ago, Associated won national recognition for those efforts. Mark, share Associated's commitment to generating power the right way.
Mark (Guest): Well, I think really being responsible with the way that we conduct our business and our business is generating electricity. That's really ingrained in who we are as a part of the rural electric cooperative system. You know the people of rural America; they are the original environmentalist in some ways. I mean, they-they make their living, their life is tied to the land, whether they’re farming or whether they are providing services related to the environment. It's very important to them, and so it's very important to us and it's really ingrained in how we generate electricity and how we do our business.
Darryll (Host): Mark, tell me more about the commitment Associated Electric has made toward environmental stewardship.
Mark (Guest): You know, we burn fossil fuels for power. We have coal. We have natural gas. And since the early 1990s, we've invested more than a billion dollars to reduce air emissions to clean up our generation sources. And those emissions have improved by more than 90%. Another way of saying that is that we've reduced our emissions from our fossil fuel plants--our coal plants--90% since the early 1990s. But that's really a journey that continues today. It's not a destination. There's new rules, new compliance efforts, new things that we need to do to be responsible stewards of the environment, and we're doing those things. We monitor that, and we take care of that business day after day.
Darryll (Host): You know that emissions track record is pretty impressive. But you mentioned a little bit about wind earlier. Talk if you would about all of the wind resources that Associated now has.
Mark (Guest): Well, Darryll, that's-that's right, we were the first, as I mentioned, to bring utility scale wind to Missouri, and we've maintained an interest in keeping our eyes on the developments with different types of renewable resources and adding those to our system. But when it makes the most sense for members. And again, we think about reliability, we think about affordability and we think about this responsibility piece of the business. And just earlier this year, we added our seventh wind farm. That brings us to more than 1,000 megawatts of energy available from wind and by the end of 2020 we’ll add an eighth wind farm that will bring the amount of wind power available to us at to more than 1,200 megawatts. So, we feel that it's important to operate the generation that we have today as efficiently, as responsibly, as affordably as we can and reliably, but also to keep our eye on developments that may make sense for future generating options. And so, we're going to always do that. We're going to remember those three important things about how we provide generation to members. We know members want it reliable. We know they want it affordable, and they want us to do that responsibly. And so, we're going to keep our eye on that in each of those areas.
Darryll (Host): Mark, you mentioned wind generation and the megawatts of power from wind. About how many homes will that supply power to?
Mark (Guest): Well, Darryll, that's an interesting fact because if you looked at our wind capacity opportunity at the start of this year we already had enough power from wind that would generate for about 180,000 homes or so. By the end of this year with the 1,240 megawatts that's going to be available to us, you're looking at about power for 300,000 homes, so… Clearly we've invested in wind energy and we've invested in it for the right reasons. It makes sense for our members.
Darryll (Host): You certainly mentioned the increased focus on wind generation. But mark what about electricity generated by large solar farms?
Mark (Guest): Well, Darryll, that's a good question. And when we think about future power generation sources, it's our obligation to members to look at all the options and make sure that if we do need to-to add a generating source, that it's something that's going to serve them well. And it goes right back to it being reliable, being affordable and being responsible. So, to that end, we're going to look at any option, including solar that may meet that test when we need to add generation.
Darryll (Host): You shared the resources for what is known as base load generation---the coal and natural gas plants. But what about some nuclear options? Does Associated Electric provide nuclear generation?
Mark (Guest): Darryll, no we don’t. And really, that's a function of the type of generation. With nuclear there's a lot of unique challenges. Those involve finding a site. Those involved permitting. Those involve compliance and operation and maintenance costs, which for obvious reasons can be very expensive. The fuel is typically very inexpensive for a nuclear plant. The operations, the maintenance, all the safety safeguards you have to have in place. Those are very, very expensive. So, like any option, it's something that is in the pallet that we would look at. But it's not on the near-term horizon for Associated.
Darryll (Host): It is really all about doing the right thing for our co-op members. That cooperative business model is something that has worked well in years past and it still works well today. Mark Viguet, from Associated Electric Cooperative. Thank you for sharing insights on the balanced electric generation mix. Coming up next month, we'll take a deeper dive into reliable electric generation.