Minnesota farmers, Rural Electric Associations at odds

MINNESOTA - Glen Rohlik is like a growing number of farmers these days. He installed a small wind turbine on his farm in Redwood County and pumps electricity back through the wires of his local Rural Electric Association when the winds produce more power than he needs.

Brian Jeremiason is the energy service manager with the Renville-Sibley Power Cooperative, and is like a lot of managers with farmer-owned REAs.

He's becoming increasingly wary when it comes to the power that farmers like Rohlik want to sell back to the cooperatives.

"A disadvantage for the cooperative is an advantage for the person," said Rohlik while joining in a discussion on an energy dilemma that is slowly charging up in rural areas. Both were participants at a Renewable Energy Conference held recently in Olivia and hosted by the Renville County HRA/EDA, Southwest Minnesota Initiative Foundation, and the Southwest Clean Energy Resource Team.

It's an unusual dilemma in the making: REAs see a need for new sources of electricity and many of their member-owners are eager to become the generators.

But small wind power can be too much of a good thing for REAs.

They serve 28 percent of the population in Minnesota, but receive 64 percent of the production from small wind generation, according to the Minnesota Rural Electric Association, which represents electric cooperatives across the state.

It's costly power: REAs and utilities are required by law to pay the net retail rate for that electricity.

Purchasing power at a retail price means the cooperative is not covering its full costs associated with distributing the power acquired from small wind generators, Jeremiason told conference participants.

Those costs are "socialized" to the members, he explained.

He said the small wind power also creates challenges for the cooperative in its relationship with its major power suppliers. Contracts with suppliers can make it difficult to curtail the amount of power being purchased when local winds might happen to be blowing.

"REAs support wind power," said Joel Johnson, legislative representative for the Minnesota REA when contacted separately.

But Johnson said REAs have an interest in seeing that small wind power is brought into the system in ways that are both fair and smart.

Paying the "net" retail rate for electricity forces REAs to pay well above the market price for electricity when the wind is blowing at 2 a.m. and power demand is very low, he pointed out.

Small wind generators can also be placed on the distribution system at undesirable locations, said Johnson. That forces REAs to add expensive equipment to handle the added power and transmit it where needed.

Minnesota law defines small wind as power generation up to 40 kilowatts. There is discussion about expanding the definition all the way to 5 megawatts, which raises fears among REAs that they would bear the cost of accommodating large wind turbines as well.

Ironically, the concerns about small wind power come at a time when rural cooperatives are looking for new energy.

Current projections show that electric demand in the region will grow by 30 percent by 2030, said Jeremiason.

He said the best way to meet that growing demand will be to develop new generation, including new power from renewable energy sources.

The cooperative is also encouraging more efficient energy use and conservation. It is currently in the midst of installing an automatic meter infrastructure that will provide better system-wide control over electric usage.

Johnson said small wind generation is not a major problem for REAs when the number of generators is small. There are currently only a couple of small wind electric generators on the Renville-Sibley system right now, Jeremiason said.

The problems come as the number of small wind generators increase, especially since some of the greatest interest is occurring on the smaller, and most rural REAs, Johnson explained.

There are benefits to local REAs when farmers are producing power from wind, others at the conference noted. The local wind power can be counted toward the local REA's obligation to meet the state's renewable energy standard.

And, small wind systems represent added generation capacity to the system that requires no outlay of capital by the REA.

Wind power proponents at the conference also noted that currently, there are not enough small wind generators in the countryside to create a significant issue for most rural cooperatives. There are currently only a couple of small wind electric generators on the Renville-Sibley system right now, Jeremiason said.

Johnson said REAs are concerned that growing interest in small wind generation will lead to large numbers of generators on systems. That's especially a concern for some of the smaller, and more rural REAs where wind resource and interest is also the greatest, he explained.

So far, this region has not seen any significant problems. Kandiyohi Power Cooperative has won kudos from small wind developers for its willingness to accommodate them. Dan Tepfer, with the Kandiyohi Power Cooperative, said the system currently has six small wind and two solar power contributors on the system. They represent at most a "miniscule" cost toward the system and do not challenge it, he said.

While many farmers are becoming interested in supplying electricity to their local distribution system, only a few are willing to pay a premium for the opportunity to use wind-produced electricity. Jeremiason said Renville-Sibley Cooperative offers its customers the opportunity to buy green electricity at a cost of $1 per 100 kilowatt hours block of power.

To date, only five of the cooperative's 1,956 members have signed up.