The 2012 Minnesota Legislative session will begin next week and is expected to be a sprint from start to finish. Since the previous session and government shut down ended last summer, there has been plenty of news to keep politicos busy. From the Vikings stadium to an unexpected budget surplus to recent scandals that installed new leadership in the Senate, things will move quickly when legislators are gaveled in. And, with 2012 being an election year in which all legislators are up for re-election (because of redistricting, which is still unsettled), legislators will want to end the session on time to hit the campaign trail.

Great River Energy will represent member cooperatives with two key issues in mind: ensuring new net metering laws do not adversely affect members and ensuring Minnesota utilities retain the first right to build transmission lines in the state.

The Division of Energy Resources plans to propose changes to the current net metering statute. Great River Energy will work with legislators, Gov. Dayton’s staff and regulators to explain why any changes to the law must:

• Be cost-neutral for electric cooperatives
• Clarify the purpose of net-metering in statute, which is to off-set individual energy use, not enable individuals to become independent power producers
• Eliminate payments and replace them with roll-over bill credits
• Require customers to pay for services they use
• Institute a system-wide cap to maintain reliability and affordability.

Another big issue could be the proposal by many utilities in the state to develop a Right of First Refusal in Minnesota to ensure that utilities in the state have the first right to build necessary transmission lines. A 2011 FERC decision removed this right, mainly as a response to utilities in the Southeast United States that have not built the necessary transmission. Instituting this statute in Minnesota will ensure that utilities who serve customers in the state can build, own and operate transmission lines that connect into the infrastructure that serves our customers.

Be sure to check out our position statements which provide information where Great River Energy stands on current legislative issues: http://www.greatriverenergy.com/cooperativeway/legislativeactivity/

Great River Energy recently completed a transaction that resulted in full ownership of Blue Flint Ethanol LLC after it purchased the remaining 51 percent ownership interests in the biorefinery from HES Ethanol Holdings LLC, a subsidiary of Headwaters Incorporated.

“Blue Flint Ethanol has been operating profitably since it began production in 2007. Great River Energy’s ownership of the biorefinery benefits its members,” explained Jeff Zueger, chief operating officer, Blue Flint Ethanol.

Great River Energy acquired 51 percent of Blue Flint Ethanol, an ethanol biorefinery located in Underwood, N.D. Prior to this acquisition, Great River Energy owned 49 percent of Blue Flint Ethanol.

Blue Flint Ethanol is a 50 million gallon- per-year dry mill ethanol biorefinery that uses process steam generated by the power plant to create a highly energy-efficient operation. In addition to ethanol production, the facility produces dry distillers grains, a high-protein, nutritious feed for livestock and poultry, and fuel-grade corn oil.

Blue Flint will operate as a wholly owned independent subsidiary of Great River Energy. The biorefinery will continue to purchase process steam and other services from Coal Creek Station. Opportunities will also continue for Great River Energy and Blue Flint Ethanol employees to support each other with shared resources from time to time.

Great River Energy was the first utility in the United States to locate an agricultural processing facility next to a coal-fired power station. Because it was built near a power plant, Blue Flint Ethanol was able to avoid the cost of building and operating a separate boiler unit. This helped make Blue Flint Ethanol one of the most cost effective, energy efficient and environmentally friendly ethanol plants in the country.

Faced with a strong growth in demand for electricity by its member cooperatives and the need for a long-term asset to provide the generation to meet that growing demand, Great River Energy started construction of Spiritwood Station, a 99 megawatt combined heat and power plant located just east of Jamestown, N.D., in October 2007.

The power plant, built at a cost of $424 million, will generate electricity for the regional electricity market, and provide process steam to a malting facility located adjacent to the plant. When fully utilized, Spiritwood Station will be about 66 percent efficient. This compares to about 30-35 percent efficient for most coal-based power plants in the United States. Also, the plant will utilize the best available emissions control technologies, making it one of the cleanest power plants in the country.

The plant in service date is being delayed. During the construction phase, the United States was unexpectedly hit by the recession, and Great River Energy’s five-year forecasted growth dropped from a strong 2.5 percent prior, to a marginal 0.5 to 1.0 percent. Prices also dropped in the regional electricity market, and the loss of a proposed ethanol plant that would have used process steam from the plant, resulted in a challenging short-term outlook for Spiritwood Station.

Thus, Great River Energy made a decision in August 2011 to delay the in-service date of Spiritwood Station past 2012. The delay of the in-service date will minimize the cost impact to members and will help to maintain the competitiveness of our rates. Great River Energy’s members will again need more baseload electricity in the future, and that will help make Spiritwood Station a valuable long-term investment. This will occur as demand and electricity prices increase via a turnaround in the economy, and as additional markets develop for the available process steam from the plant.

Last fall, we finished commissioning activities at Spiritwood Station with successful results. In November, employees immediately started a protect, preserve and maintain mode at plant. That included drying the boiler and piping systems, cleaning equipment, moving all coal, lime and ash offsite, and site cleanup. Current activities include monitoring preservation of equipment, running lube oil systems, running conveyors to preserve the belts, turning motors, and performing other preventive maintenance activities. A 2013 operational plan for Spiritwood Station will be developed later this year.

The first of the CapX2020 projects was energized on Dec. 20. The 345-kilovolt transmission line connects a substation in Monticello with another located near St. Cloud.

The CapX2020 Monticello-St. Cloud 345-kilovolt (kV) transmission line was energized on Dec. 20. The 28-mile segment between the new Quarry Substation near St. Cloud and the existing Monticello Substation is the first CapX2020 project to be completed and placed in service.

The project, completed on time and on budget, is an important piece of the regional transmission grid.

“This transmission line will ensure reliable electric service, provide capacity for new power generation outlets, when needed, and provide lasting benefits to the Upper Midwest,” said Will Kaul, Great River Energy vice president of transmission and CapX2020 chairman. “The CapX2020 projects will further expand and enhance the regional grid, allowing utilities to access the most affordable electricity available in the MISO footprint.”

Construction update

• Construction will begin in early 2012 between Alexandria and St. Cloud on the Fargo, N.D.-St. Cloud 345-kV project.
• Construction is scheduled to start in April 2012 on the Brookings County-Hampton 345-kV project.
• Construction is expected to be completed on the Bemidji-Grand Rapids 230-kV project in late 2012.
• Regulatory permits for the Hampton- Rochester-LaCrosse, Wis., 345-kV project are pending with state and federal agencies.

The economic downturn has resulted in an alarming trend for nonprofits: need is increasing and funding is decreasing. The generosity of Great River Energy employees has bucked that trend – the annual community giving campaign reaches new heights every year.

A group of our employees volunteering their time and labor at a Habitat for Humanity project.

The community giving campaign offers employees the opportunity to have their financial contributions matched by company dollars each fall. This year’s effort raised approximately $80,000 for nonprofit organizations in Minnesota and North Dakota.

Three Minnesota nonprofits – Sherburne County Area United Way, Greater Twin Cities United Way and Community Health Charities Minnesota – and five North Dakota charities – McLean Family Resource Center, Mercer County Women’s Action & Resource Center, Missouri Slope Areawide United Way, Jamestown United Way and Carrie’s Kids – benefited from this outpouring of financial support.

This is just one way that Great River Energy exemplifies that cooperative principle of “concern for community.” Beyond providing reliable electric service, an electric cooperative must strive for the development of sustainable communities.

By the numbers
In 2011, Great River Energy made a difference in the communities it serves in many ways. Here are just a few of our community giving stats:
• $80,000 raised during the employee community giving campaign
• 2,400 paid volunteer hours used by employees
• 48 scholarships awarded to Minnesota and North Dakota students
• 276 lives impacted by company blood drives
• 48 turkeys donated to families in need the week of Thanksgiving

Connexus Energy scored the highest reliability rating by its members compared to other electric utilities and cooperatives in the American Customer Satisfaction Index (ACSI). The survey is produced under license with the University of Michigan.

Connexus scored a reliability rating of 90, compared to the ACSI national electric industry’s average of 86 in the third quarter of 2011. “Our members took part in the survey and gave us the high ranking. I am very proud of the fact no other cooperative or utility in the country ranked higher,” said Connexus CEO Mike Rajala.

By definition electric reliability measures the consistency of electric service on demand as provided by utility companies to their customers. But according to Rajala, it means much more. “It means when you’re a Connexus member, and you flip a switch or push a button, your electric appliance or gadget will work, because electricity is there. Electricity is a crucial product that we scarcely think about, unless we don’t have it. Judging by the high ACSI rating of Connexus reliability, our members don’t think of us often and, that’s a darn good thing. I hope our members see value in getting electricity from a company that is reliable.”

Connexus Energy is the largest customer-owned utility in Minnesota providing electricity and related products and services to over 126,000 homes and businesses in portions of Anoka, Chisago, Hennepin, Isanti, Ramsey, Sherburne, and Washington counties.  Additional information about Connexus Energy is available online at connexusenergy.com.

The Association of Fundraising Professionals (AFP) in Minnesota recognized Dakota Electric Association’s community involvement efforts by naming it the Outstanding Philanthropic Organization for 2011.

(L-R): Mike Ferber, president, Fundraising Solutions; Dakota Electric board member Janet Lekson; Dakota Electric president & CEO Greg Miller; AFP president Heidi Droegemueller; Dakota Electric board chair Jim Sheldon.

Professionals in the community who recognized the cooperative’s generosity over the years nominated Dakota Electric for this award. While the cooperative doesn’t have a large budget for donations, it stretches donations around its service territory, providing support for youth clubs, sporting activities, school districts, nonprofit organizations, health and human services, emergency responders, special fundraising activities and more.

Employees and board members spend time serving chambers of commerce, rotary clubs and various nonprofits and community organizations.

Each year, through the company’s internal “Dakota Cares” campaign, employees donate approximately $20,000 to local charities through the United Way, Community Health Charities and a local food shelf.

Dakota Electric’s community outreach touches individuals and groups throughout its service area.

“We do what we can to be involved in the community,” Dakota Electric President and CEO Greg Miller said. “While we are not a large company that donates a lot of money, we are happy to be recognized for our faithful support to local organizations.”

AFP gives this annual award to organizations that have demonstrated outstanding commitment through financial support and community involvement.

Great River Energy is not only a utility that generates electricity for its members, but is also a corporate citizen that can have an impact on the communities it serves beyond its business purpose.

Great River Energy sponsors events, such as the Mesabi Trail Tour, to demonstrate our commitment to the communities we serve through our member cooperatives.

To demonstrate this, each year Great River Energy partners with organizations and initiatives that have a positive impact on the community and member consumers through sponsorships.

Nothing builds a stronger connection to the environment than getting out in nature and getting your hands dirty. GreenTouch Day is a statewide partnership between Minnesota’s Touchstone Energy Cooperatives and Minnesota State Parks and Trails. On the first Saturday of every May, electric cooperative employees, members and area residents pitch in to spruce up a Minnesota state park.

The Minnesota State Fair continues to highlight agriculture, as well as farm and show animals – a characteristic of many of our cooperative communities. As a sponsor of the Minnesota State Fair Milk Run and exhibit participant in the fair, Great River Energy is able to partner with its member cooperatives to educate fairgoers about electric co-ops.

In North Dakota, Great River Energy sponsors a number of events to support both local organizations and communities near its power plants and other business locations. Some examples include the Hazen concert series, Jamestown Chamber of Commerce Ag Days, Lewis and Clark Days in Washburn and Harvest Fest in Underwood.

These sponsorships present an opportunity for Great River Energy to cultivate community relationships by demonstrating care for the communities where it has employees and members.

Safe sidewalks are an important step toward safe routes to schools. A Great River Energy donation will make it possible for students in one North Dakota community to bike and walk to class without worry.

A donation of ash produced at Great River Energy power plants will help the Safe Routes to Schools program improve the health and well-being of children by enabling and encouraging them to choose active ways to get to school. The project will use Great River Energy ash for the replacement of an existing sidewalk in Washburn, N.D.

The new sidewalks will use bottom ash as a soil stabilizer to help build a firm foundation for concrete, which will incorporate fly ash, another byproduct of coal-fueled electricity generation.

When fly ash is used as a replacement for a portion of cement in sidewalk construction the concrete has been proven to be stronger and longer-lasting. Other community benefits include the reduction of carbon dioxide emissions.

Approximately one ton of greenhouse gas emissions are prevented for every ton of fly ash used in place of cement.

Mille Lacs Energy Cooperative (MLEC) spread the word about electrical safety by offering safety truck demonstrations for students at Aitkin and McGregor schools.

The demo taught a variety of electrical safety habits and demonstrated the power of electricity. It showed the potential hazards associated with unsafe actions around power lines and household circuitry. The presentation vividly showed the effects of contacting 7,200 volts of electricity.

This creative program was designed by Connexus Energy personnel to teach the potential dangers of contacting a power line.