America’s peak demand is forecast to grow by 38 gigawatts through 2029 — the equivalent of adding another California-sized state to the nation’s power grid. At the same time, power producers plan to retire more than 110 gigawatts of baseload (always-available) generation by 2033.
When demand outpaces supply of any commodity, prices tend to increase. In addition, there’s increasing concern about the potential for rolling brownouts and blackouts as power providers struggle to meet peak demands. Co-op members may not notice the impact of the supply/demand, but it’s captured the attention of electric co-op directors and staff.
“The leadership at many electric co-ops is seeing unprecedented growth in demand,” explains Stephanie Crawford, NRECA regulatory affairs director. A decade ago, a huge commercial project might have boosted a co-op’s total load by 20 or 30 megawatts. “Now they’re getting multiple requests for projects in the hundreds of megawatts. … It’s not only a question of needing to build or obtain more capacity, but in many cases, [it] also creates questions about the availability of transmission and distribution.”
For electric co-ops, the efforts fall into two categories: increasing knowledge and building relationships. A generation ago, power supply discussions were a straightforward and easily understood process for co-op directors, given the widespread availability of baseload generation. Today’s directors increasingly find themselves learning about sophisticated and challenging issues as they weigh decisions affecting their co-op’s operations and financial viability for years to come.
Co-ops have long emphasized relationship-building, and Crawford stresses the importance of doing that with companies developing large projects.
“Early and frequent conversations between the co-op and the entities seeking additional energy are critical,” she explains. “That has to include honest conversations about the costs and timelines involved.”
For example, while a project might ultimately need a significant supply of megawatts, if its operations are phased in gradually over several years, the co-op may have additional time to prepare for the maximum load. They might consider creating a partnership with the project owner to develop new generation assets on the project’s site, reducing transmission concerns.
In addition to preparing for projects from organizations new to the co-op, Crawford notes the importance of co-op leaders keeping a finger on the pulse of their existing commercial accounts. “Being proactive and reaching out to understand how a commercial account’s energy needs may be changing in the coming years will inform conversations and decisions about timing, rate design and other factors, even if they’re not making specific requests yet. That will help the co-op serve emerging needs while protecting reliability for all its members.”