Mark Bailey, president and CEO of Big Rivers Electric Corporation in Henderson, says, “The key issue for the local co-ops we serve is that we safely provide low-cost power to their members. When we conduct surveys on behalf of the co-ops, we find repeatedly that their customers value the importance of reliability and cost almost equally.”
Big Rivers is a not-for-profit business owned by the three local distribution co-ops it serves: Jackson Purchase Energy in Paducah, Kenergy in Henderson, and Meade County Rural Electric in Brandenburg. The 112,000 consumer-members of those three co-ops are spread over a huge area. Power from Big Rivers travels through 1,266 miles of transmission lines into substations in a system covering 22 counties.
Bailey says making decisions about this power supply system is a balancing act.
“We try to keep the power as reliable as possible,” Bailey says, “and we also ask everyone to pay their share of what it costs to serve them.”
Environmental price tag
In addition to safety, reliability, and affordability, a fourth value shared by consumers and Big Rivers personnel makes the balancing even more difficult. Bailey says, “If you surveyed about attitudes toward the environment, everyone wants a cleaner environment. The hard part is correlating at what cost.”
Electric utilities constantly compare the price of options to protect the environment. National opinion polls usually skip over those kinds of financial details. Bailey says, “Often the cost (to consumers) is not clear, and does not become clear until sometime later when the bill comes due.”
A big part of Big Rivers’ job is looking out for customers’ wallets today, while being aware that those decisions will affect the power supply five, 10, and 20 years from now.
To meet new rules from the North American Electric Reliability Corporation, Big Rivers joined a regional transmission organization in 2010. As a member of the Midwest Independent Transmission System Operator, Big Rivers personnel receive training in new ways to keep the supply of power steady.
There’s a physical benefit to joining MISO, too. A new transmission line that crosses the Ohio River includes a 15-mile segment connecting Big Rivers to other MISO members so that they can move power back and forth. When a Big Rivers generator goes off-line for maintenance, Big Rivers can bring power in from a nearby utility with no interruption in service.
Big Rivers also constantly upgrades its transmission lines and substations. That maintenance includes using helicopters to fly above transmission corridors as well as on-the-ground inspections to ensure that wires and supporting structures are in top condition and to pinpoint what needs replacing. At substations, Big Rivers also performs continuous testing of back-up devices, including capacitors and huge banks of batteries. A two-way radio system installed last year helps Big Rivers stay in touch with its member distribution co-ops.
Low-cost western Kentucky coal
Hydroelectric power from the dam operated by the Southeastern Power Administration at Lake Barkley usually provides about 10 percent of Big Rivers’ power. Until ongoing dam repairs are completed, Big Rivers is receiving a much smaller amount of power from that source.
Since the early 1960s, Big Rivers has used the low-cost fuel available from the nearby western Kentucky coalfields in nine of the generators it owns and/or operates to produce about 90 percent of the power in its system.
Big Rivers has already spent millions of dollars adding emissions control devices to many of its coal-based units wherever practical. With stricter environmental regulations set to go in effect soon, deciding what to do next is getting more complicated.
Sometimes changing fuels may be the best option to comply with a first round of upcoming Environmental Protection Agency regulations. In one change, the fuel oil-based combustion turbine at the Reid generating station was recently converted to natural gas to lower its emissions. Big Rivers is considering converting another unit at Reid to natural gas within the next three years.
Bailey says, “Previous decisions were made based on economics, and that’s how we’ll make future generating choices. We’ll continue to operate the units in our coal fleet to the extent that they comply with the laws, that they operate reliably, and that the cost to operate and maintain them remains reasonable and low. Our view is that as long as they are able to do that we will continue to operate them before we replace them.” KL
Next month: How the Tennessee Valley Authority plans its long-term electricity supply