August 2022 Editorial

Electricity cost remains stable

Marshal Albright, Cass County Electric Cooperative president and CEO

With most goods and services up in cost because of inflation, disposable income is likely dwindling for many cooperative members.

I am delighted to say the cost of electricity from Cass County Electric Cooperative has remained stable over the past year despite the impacts of inflation. Thanks to Minnkota Power Cooperative keeping our wholesale power price stable, coupled with robust electricity sales in 2022 and continued growth, the cost to deliver electricity to our members has remained unchanged since last year.

Many of our goods and services have increased in price due to high demand and low supply issues. Most noticeable is the price of gas at the pump. This past winter, members who heat their homes and businesses with natural gas paid nearly double the cost compared to the prior year. The high price of natural gas impacts the cost of electricity for utilities that use natural gas for power generation. Cass County Electric purchases our power from Minnkota Power Cooperative, which uses coal, wind, and hydropower to fuel most of our energy needs. Fortunately, the fuel sources Minnkota uses for power generation have not been impacted as much by inflation.

In 2022, the wholesale power market price has increased considerably year over year because of high natural gas prices, and is why some utilities have raised their price to consumers. The higher market prices are good news for Minnkota because they receive a higher price for excess wind energy sold into the market, resulting in unexpected revenue.

If inflation remains high, it could ultimately affect the cost of supplying electricity to our members.

Inflation Reduction Act (IRA)

As I wrote this editorial, the U.S House and Senate passed the Inflation Reduction Act. The bill includes increasing the 45Q carbon capture tax credit to promote clean energy from $50/ton to $85/ton. In North Dakota, power producers will now have the opportunity to take advantage of the credit with our coal-fired power sources and ideal geology to safely and permanently store the CO2 miles beneath the surface. This is a significant provision in the bill approved by Congress that will impact electric cooperatives nationwide.

Congress extended the tax credits for installing renewable energy for another ten years. There is also a $7,500 tax credit for buyers of electric vehicles. Additionally, the bill includes a direct payment option to utilize federal incentives to install renewable energy for not-for-profit cooperatives like Minnkota Power.

As more details of the bill emerge, we will share this with our members.

Fall outage

This fall, Minnkota will perform a major outage at the Young Station Unit 2 for about three months. The maintenance outage will replace critical components inside the boiler to ensure the long-term reliability of the units. Major outages typically occur every three years, during spring or fall to avoid peak demand seasons. The historical availability of our coal-fired units to produce electricity is around 90%, and one of the reasons Minnkota has been able to provide low-cost and reliable electricity to the region.