need for more baseload
Costly coal-fired power plants are the
of a reliable electric system
You flip the switch
and the light comes on. You plug in the refrigerator and it gets cold.
The temperature rises and the air conditioner kicks on. That’s
the way things are supposed to work. Barring an ice storm or strong
winds that knock down power lines, that’s the way
things do work day in and day out for members of Missouri’s electric
The reason power
flows to the light bulb when you flip the switch is because Missouri
is blessed by an adequate supply of baseload generation. But as the
membership grows, builds larger homes and adds more electronic gadgets,
the need for new baseload generation has arrived.
And when these baseload plants are built their cost will be one of
the factors driving up the price you pay for electricity.
In the meantime,
members will see a series of rate increases over the next 3-5 years
caused by many other factors, including increases in the price of fuel
used to generate power.
The term baseload
refers to power plants that are cheap to run and operate around the
clock. They are designed so if you need that light late at night, the
energy to operate it will be there.
If a baseload power plant was a car, it would be a minivan: reliable,
cheap to operate, and capable of holding the entire family, plus
some groceries and maybe even the dog. Like a family with a three-car
garage, your electric cooperative has a mix of electricity-generating
resources that help meet your needs.
A family might have
a minivan or station wagon for the long haul. It might have a pickup
truck for the odd job around the farm. It might also have a sports
car, fast and easy to handle, that’s only used occasionally.
similar to the way your electric cooperative’s “fleet” of
power plants works. For the long haul, Associated Electric Cooperative,
the supplier of electricity to all of Missouri’s electric cooperatives
except Citizens Electric, generates low-cost power from four coal-fired
power plants located at Thomas Hill, New Madrid, Chamois and Oklahoma’s
Grand River Dam Authority.
|The New Madrid Power
Plant is one source of baseload power for Missouri’s electric
cooperative members. As energy use grows, however, new baseload
power plants need to be built or members will be left in the dark.
Associated Electric Cooperative plans to build a new coal-fired
power plant near Norborne. These plants cost a lot to build but
are cheap to operate.
If it were possible,
your electric cooperative would use these projects to meet all of your
energy needs. But as energy use increases throughout the day, and especially
on the coldest and hottest days of the year, the capacity of these
plants can be outpaced by the member load.
another set of power plants kicks in to meet the need. The far-sighted
individuals who do the planning at Associated built intermediate generation
plants fueled by natural gas. For Associated, these plants are located
at St. Francis in the Bootheel, Chouteau in Oklahoma and Dell in Arkansas.
plants are cheaper to build than a baseload power plant but much
more expensive to operate. For example, in 2006 it cost 4 times more
to operate a combined-cycle gas plant than a coal-fired plant. But
since these plants don’t operate
all the time, they are an important part of the mix.
consumption really picks up, your electric cooperative has another
ace up its sleeve to ensure reliability. Several simple-cycle gas
plants — essentially
jet engines hooked to a generator — start up. Because
these plants are so expensive to operate, they run for short
periods that get your cooperative past the times of peak demand
for electricity, then shut down. In 2006, simple-cycle gas
plants cost nearly 7 times more to operate than coal.
wind energy is popular with consumers, it is not considered baseload
generation. While Missouri's electric cooperatives will distribute
power produced at three northwest Missouri wind farms, the power
these turbines produce is not as consistent or as predictable
as baseload generation, like coal-fired power plants. In summer
and winter, when power is needed most, wind speeds are often
at their lowest.
the cooperatives have adequate resources to generate the
power members use is a task handled by planners at Associated and,
ultimately, its board. The board is made up of managers and
directors from the cooperatives that own Associated.
ahead, these planners predict the energy requirements of the cooperatives
Associated serves will increase 2 percent a year. That’s enough
energy to power 30,000 homes.
the Associated staff conducts what they call a resource plan,” says
John Farris, manager of M&A Electric Power Cooperative,
Poplar Bluff, and a member of the Associated board of
go out to every co-op and ask what their anticipated
load and growth will be. They put that into a package
and say, ‘Here’s
what we need, and here’s how we can
serve the load.’ A decision is made each year to
take care of those needs.”
Farris says it wasn’t
long after he joined the board seven years ago that
talk turned to the need for more baseload generation. “We
always looked at peaking units as a possibility because
that is our lowest-cost resource we can put in and
something we can put in quickly,” Farris says. “But
you can only do so much of that before you have to
go to baseload plants, or something that can be run around
The board considered
all of its options. They considered partnering with another utility
to build a plant. They looked at the nuclear option. They
studied site locations and, ultimately, proposed
building a new coal-fired power plant to be located near Norborne.
That plant is expected to cost $1.7 billion, a figure
that is 70 percent higher than estimates from just
two years ago.
on coal to fuel reliable baseload power generation. Rising construction
costs mean that new plants — like one planned near Norborne — will
significantly impact electricity rates.
Driving the cost
increases is the simple fact that utilities all across the country
are in the same boat as Missouri’s electric cooperatives
and are building power plants to stay ahead of the demand. Added to that is
global competition with countries such as China and India.
of steel, concrete and skilled labor to build these plants are causing
rates to rise, taking the price for electricity along. “There’s
such a shortage of labor and materials that we’ve seen some
record high prices,” Farris
says. “All utilities will see the same
increases we are.”
Managers like M&A’s
Farris can remember when the last baseload
generation was added 25 years ago. Its construction caused
a round of rate increases that cooperative
members had to weather in the mid-1980s.
Still, Farris says
wise decisions made years ago have put Missouri’s electric
cooperatives at a definite advantage.
consumers pay the 10th-lowest rates in the nation, and that status
is expected to continue even as rates inevitably rise.