Rural Missouri - October 2022 - 25

Associated's current generation portfolio is diverse:
coal and natural gas plants, wind and hydropower.
What future changes can we expect?
David: The biggest change will be adding megawatts to
our existing fleet to shore up reliability for the future. Over
the past few years, as other regions have been retiring
baseload power plants, we felt there could be a scarcity
of generating capacity across the entire region that
potentially could impact us. Following notification to the
appropriate regulators, we've been adding megawatts to
our existing natural gas fleet, which is the most efficient
and cost-effective way to add capacity.
For example, Unionville Power Station, a liquid-fuel plant,
was idle and not needed for many years, but we are bringing
its 44 megawatts back online soon. Improvements at
our existing natural gas plants are adding incremental
but valuable generating capacity. Every megawatt we add
of natural gas is good for members and the environment
because it is dispatchable and roughly 50% cleaner than
coal generation.
To that point, we are executing the early phases of a plan
to add up to 900 megawatts of additional natural gas
generation to our fleet. These additions are to address
new load growth on our system, shown very clearly in our
February 2021 energy peak - which was an all-time high
for Associated - and the peaks this past summer. I expect
that new gas generation to be available in late 2026.
Some advocate for renewable energy now at the
expense of fossil-fuel generated electricity. How do
you answer people who favor that approach?
David: We are looking for generation technologies that
actually work and can be financed to replicate the reliability
of a coal power plant. That technology doesn't exist
today, anywhere in the world. Companies are retiring coal
plants, claiming they will reduce carbon significantly or
be carbon-free by a date certain, but they do not have any
plan to replace dispatchable megawatts with a technology
that is proven.
In a word, that is stupid. Associated is not in the business
of doing things that are stupid. We've proven we aren't
against renewable energy, but we do oppose bad decisions
that will make our system less reliable and less affordable
for members. Associated is already a leader in wind development
in the Midwest with 1,240 megawatts. The most
recent addition of about 470 megawatts came online in
2020. We also have modeled the possibility of adding solar
to our portfolio and have been searching for viable sites on
our system where we could add solar projects. The supply
chain shortages and issues with production of solar panels
have increased prices significantly and slowed that process
down. We think the right thing to do for now is to wait until
costs settle down. When it's the right price and the right
place, which means " good for members, " I think you'll see
us pursue some level of solar development.
Looking into the future, are there any cutting-edge
generation technologies you're excited about?
David: Excited is a relative term - many ideas sound
great in the concept stage, but the devil's in the details,
as they say. Are they reliable? Are they affordable? Earlier
this year, we signed an agreement with a company
developing small modular nuclear reactors. Three large
developers are working to put this technology online. Our
agreement with one of these developers is basically to
observe the process as this technology develops and is put
into production. The earliest one of these units could be
online is 2028 and the regulatory process around any sort
of nuclear project can be a wild card. Technologies like this
aren't near-term solutions, but we're staying involved to
see how it develops.
As a three-tiered cooperative system, which is not
common in the industry, talk about how that system
works. Pros and cons?
David: I don't believe there are any cons. Associated's
three-tiered system works very well - better than other
types of systems - because it is structured to enable
each tier to focus on their core competencies and do what
they do best. For example, distribution cooperatives are
really good at serving residential and commercial memberowners.
They don't have to worry about the transmission
because the transmission cooperatives - which own Associated
- are really good at operating their transmission
systems. And Associated doesn't have to worry about the
quality or challenges with respect to transmission - our
six transmission cooperatives take care of that. Our role is
to provide generation, which is Associated's core competency
and what we focus on to provide value to the system.
With all of the challenges ahead, do you think the
future is bright for electric cooperatives?
David: Absolutely. Electric cooperatives are well positioned
not only to survive but to continue to thrive as we meet the
challenges ahead. The business model for electric cooperatives
works. When the customer and the shareholder are
the same person, goals are in alignment. At an investorowned
company, there is a natural conflict between the
customer's electric costs and the shareholder's desire for a
maximum rate of return on their investment.
The customer is paying to make a shareholder happy, and
the customer will always pay more in that scenario. In our
case, the members are our shareholders and they want
affordable, reliable and responsibly produced electricity.
That alignment of mission and values between those we
serve and the three-tiered system is the secret to success
today and, I believe, well into the future.
OCTOBER 2022 | RURALMISSOURI.COOP 25
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Rural Missouri - October 2022

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