co-ops, Clean Power Plan

Q.

WHY DID YOU DECIDE TO ENTER THE ENERGY INDUSTRY?

Paul Sukut

CEO and General Manager

Basin Electric Power Cooperative

Bismarck, N.D.

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I grew up with cooperatives entrenched in my life. From our local electric cooperative in Edgeley, N.D., (now Dakota Valley Electric Cooperative) to the rural telecom, our fuel supplier and our agricultural cooperative, co-ops make up the fabric of who I am. I started my career in an accounting firm. During that time, I had the opportunity to work with Basin Electric. I was fortunate enough to join Basin Electric’s accounting department just a few years later, and I’ve never looked back. More than 35 years later, I can’t imagine a better cause with which to dedicate my career.

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AS A COOPERATIVE, HOW DOES BASIN OPERATE DIFFERENTLY FROM OTHER POWER PROVIDERS?

We are owned by the members we serve. We’re democratically operated and controlled. We do not answer to shareholders across the country; we answer to our members. Cooperatives around the world generally operate according to the same core principles and values, adopted by the International Co-operative Alliance in 1995: voluntary and open membership; democratic member control; members’ economic participation; autonomy and independence; education, training and information; and concern for the community.

What Made Basin Electric So Successful

THAT IT HAS BEEN ABLE TO GROW AND SERVE SUCH A LARGE AREA?

That’s easy. We’re member-driven and member-controlled. Years ago, our board of directors — which is composed of our end-use consumers across all our membership districts — resolved that a “bigger Basin is better.” If we can aggregate the needs across our membership and spread investments accordingly, that minimizes risk and expands our footprint across rural America. We are rooted in politics, and because of those relationships with our elected officials, we also wield a strong voice in Washington, D.C. Our strength lies in our 2.9 million members.

HOW IS THE CLEAN POWER PLAN (A CONTROVERSIAL RULE THAT SETS LIMITS ON CARBON EMISSIONS) AFFECTING POWER PROVIDERS, AND BASIN IN PARTICULAR?

The Clean Power Plan has tremendous implications for Basin Electric and the membership. Of the 13 states hit the hardest by the rule, eight are in Basin Electric’s service territory. The driving force in Basin Electric’s decision to litigate the rule is the well-being of our end-use memberconsumers — those who will be left paying for compliance with this rule. We are hopeful that given time, ingenuity and federal/industry partnerships, we will create a viable future for all energy sources, one that strengthens rural America, doesn’t adversely impact our members, and gets us down the road with innovative and achievable solutions.

Financially, we may have to spend more than $5 billion to comply with this rule as written. These billions of dollars would simply cover adding new generation and potentially impact the operations of our existing facilities. This does not even include the expense of additional electric or gas infrastructure to support new generation.

We have long acknowledged that we are moving to a carbon-constrained future. Over the last decade, Basin Electric and our membership have taken a leadership

WHAT IS YOUR LARGEST CHALLENGE AS CEO AND GENERAL MANAGER OF BASIN ELECTRIC POWER COOPERATIVE’S ENTIRE NINE-STATE COVERAGE AREA (MONTANA, NORTH

We have a diverse membership with a diverse set of challenges and needs. Fortunately, we all work together for the betterment of the family. Our primary challenges lie in how best to serve our members with low-cost and reliable electricity in light of impending and ever-changing regulatory challenges. We are rooted in environmental stewardship and continue to balance that important responsibility with the need to serve a growing membership.

role in the development of renewable generation. We’ve added significant wind generation to our system, invested more than $1 billion in natural gas resources and have invested more than $1.5 billion in emissions control technology to make our already-clean generation fleet even cleaner. Even more, our Dakota Gasification Co.’s Great Plains Synfuels Plant (near Beulah, N.D.) is home to the world’s largest carbon capture and sequestration project — capturing more than 30 million tons of carbon dioxide.

Sadly, the Clean Power Plan gives us no credit for the initiatives we’ve undertaken. We believe there is a better way, one where we can pursue technological innovations while protecting our rural consumers from senseless rate increases. According to the National Rural Electric Cooperative Association, electric cooperatives serve 327 of the nation’s 353 persistent poverty counties. We must do better for our people, and we are hopeful the justice system will take our arguments into account and rural America will prevail.

WHAT ROLE DOES RENEWABLE ENERGY PLAY IN BASIN’S POWER SUPPLY, AND WHAT KINDS OF RENEWABLES DOES THE COOPERATIVE USE?

Basin Electric is a recognized leader of wind energy development in the Upper Midwest. Through joint projects and purchase power agreements, we have added approximately 719 megawatts (MW) of wind energy to our energy portfolio in the past decade and have invested more than $1 billion in renewable resources. By year-end 2016, Basin Electric will have more than 1,570 MW of green and wind-generation capacity.

Several of Basin Electric’s members have asked about incorporating solar as a resource option. The cooperative is considering how to best incorporate both small and large solar into its generation fleet. Basin Electric will work with the membership as it develops a solar resource strategy. As of March 22, 2016, Basin Electric purchases the output from 335 small wind and solar projects owned by member-consumers throughout the cooperative’s service territory. The output totals more than 8.8 MW. Additionally, Basin Electric purchases the output from eight recovered energy generation sites along the Northern Border Pipeline: Culbertson, Mont.; Manning, St. Anthony and Zeeland, N.D.; Wetonka, Clark and Estelline, S.D.; and Garvin, Minn. Each generates 5.5 MW of renewable energy from exhaust heat produced by the pipeline’s compressor stations. The sites produce power with virtually no incremental emissions and are considered carbonfree generation. They are owned and operated by subsidiaries of Ormat Technologies of Reno, Nev.