There isn’t a singular electric generation method that meets the need for reliable, low-cost, environmentally responsible electricity. Diversity in a utility’s generation portfolio is key. Our energy resource mix—the electricity we use to serve our customers—includes coal, wind, natural gas, oil, solar, and hydroelectric. We also purchase energy from the Midcontinent Independent System Operator (MISO) energy market when it’s more economical that generating it ourselves.
During the summer of 2022, forecasted higher-than-average temperatures increased energy demand and the potential need for energy conservation or other steps to maintain system reliability. We were prepared for the extreme seasonal temperatures and reassured customers that even if short-term energy demand across the MISO footprint were to exceed available energy, there were several energy-conservation steps we would take before customers experience an interruption in service.
In January 2023 we purchased the Ashtabula III Wind Energy Center, located in eastern North Dakota. We’ve purchased wind-generated electricity from Ashtabula III since 2013 through a power purchase agreement, but owning the facility is part of our least-cost plan to meet our customers’ energy needs. The purchase added 62 MW of nameplate capacity to our owned generation assets.
In late 2022 we finished installing 27,000 of approximately 130,000 panels at Hoot Lake Solar, a 49-MW solar project at the site of our retired coal-fired Hoot Lake Plant in Fergus Falls, Minnesota. With proximity to an existing transmission interconnection, the project allows us to add renewable energy to the grid without investing in additional, costly infrastructure. We expect to begin generating electricity at Hoot Lake Solar in 2023. Once complete, the project will generate enough energy to power approximately 10,000 homes each year.
Five small hydroelectric plants on the Otter Tail River in Minnesota account for about 1% of our energy generation. While they contribute only a small portion of our total energy, the reservoirs are fixtures in the community. In 2016 we began the process to relicense these five hydroelectric plants. We proposed that Federal Energy Regulatory Commission (FERC) relicense the plants as they were, because relicensing is more cost effective than alternatives for our customers—and because doing so would maintain the reservoirs where customers and community members have built homes. In February 2022 FERC granted a new 40-year license.
Generating energy is just the first step in providing electricity to our customers. The second step is safely, efficiently, and reliably delivering that electricity. To ensure dependable infrastructure, we regularly reviewing and maintaining the systems we use to transmit and deliver electricity. We’ve developed the System Infrastructure and Reliability Initiative (SIRI) to help keep energy flowing consistently and to identify potential risks before they become problems. Last year we doubled our traditional annual investment to replace aging transmission and distribution assets.
In July 2022 the MISO Board of Directors approved $10.3 billion in transmission projects focused on its Midwest Subregion, which includes our service area. These projects are the first group of four in MISO’s Long-Range Transmission Planning (LRTP) process that aims to integrate new generation resources—as outlined in MISO member and state plans—and increase resilience in the face of severe weather events. We’re working with our neighboring electric utilities to prepare for these transmission projects in our service area. The first project we’ll work on is an approximately 85-mile, 345-kilovolt (kV) transmission line from Jamestown to Ellendale, North Dakota. The second project is an approximately 100-mile, 345-kV transmission line from our Big Stone South Substation in South Dakota to the Alexandria Substation in west central Minnesota. We’re also working on the addition of a second 345-kV circuit from the Alexandria Substation to a new 345-kV substation near Monticello, Minnesota.
This project [Jamestown to Ellendale], along with the other phase-one LRTP projects, will help ensure a reliable, resilient, and cost-effective transmission system, benefiting not only our region and customers but also surrounding regions and customers—all while ensuring we continue to provide low-cost electricity.
Tim Rogelstad, President
We continue plans for installing Advanced Metering Infrastructure (AMI). AMI lays the groundwork for improved outage response and communication—helping us respond faster and more precisely while giving updates to customers about restoration efforts.
We went live with our Outage Management System and telephone-based Integrated Voice Response in December 2022, providing enhanced customer service related to outage restoration just in time for a winter storm. We'll continue to improve these two systems and, combined with AMI and other systems we've identified for future implementation, customers will have more visibility into their energy use and account information as we more efficiently and effectively meet their electric service needs.