Residents of Stevens County write down questions during the "Our Energy Future" event.

Our Energy Future: Stevens County Questions Answered

On December 6th, we cohosted the event Our Energy Future with the Institute for Agriculture and Trade Policy in Stevens County, Minnesota. We kicked off the evening by reviewing the basics of the energy system, presented by local experts. With this information in mind, residents broke up into small groups where they discussed what excited them about the energy system, the concerns they had, and what they wanted the system to look like in the next 10 years.

The event wrapped up with a few unanswered questions, which we will dive deeper into during our next event in Stevens County on February 28th, 2018. Residents will have the chance during the evening to map out steps the community can take to make their energy goals a reality.

In the meantime, here are the questions we’ve explored so far:

Brian Draxten, Manager of Resource Planning at Otter Tail Power Company, answered the following:

How do we make sure that when Otter Tail puts in LEDs in Morris that they are the right temperature? (not too blue, and only as bright as needed)

Otter Tail, as well as other Minnesota utilities, have done extensive research on these issues.  OTP has worked with the City of Bemidji who has the most stringent lighting requirements in our area.  As we went through the process, we actually changed the bulb we planned on using based on research.  OTP ended up choosing a bulb the same as Minnesota Power and very similar to Xcel.  The City of Minneapolis was very involved in Xcel’s choice of bulb.

How do you expect Otter Tail electricity peak demand to change with electric cars?

I believe the goal would be to do most EV charging in the Off-peak, not on-peak.  So, while there would definitely be some impact to peak-time loads, it wouldn’t be the whole impact of EV’s.  I don’t have an exact answer now but that is something we are beginning to do research on in earnest.  This is also a national issue so there should be a lot of good information coming out in the future.

What assumptions regarding electric vehicle use are used in Otter Tail’s projected demand? [chart showed flat projected demand]

That chart you refer to was from our last resource plan filed in mid-2016.  It included zero to very little EV penetration.  In our next resource plan which is due June 30 2019, we will have to address that issue and will likely include several sensitivities that include varying degrees on market penetration.

Why is Otter Tail retail electricity > $0.10/kWh, if energy costs < $0.02/kWh?

Keep in mind that there are a lot more cost than just the energy.  First, the $0.02 number is what the day-ahead and real-time markets are running at today.  OTP’s embedded cost of energy is probably more around $0.03.  In addition to that, we have the cost of high-voltage transmission, local distribution, trucks and other vehicles, labor, administrative and general costs, buildings, and of course and regulated amount of profit.

How much renewable energy do you think Otter Tail could integrate into its mix?

That is a difficult question.  The real question to ask is “How much renewable energy could MISO integrate into its system?”  You need to remember that MISO runs the transmission grid and that is one big machine that OTP itself has very little impact on.  Different studies come up with different amounts.  If reliability and cost are taken into account, maybe 40%-60% depending on the ratio mix of the renewable energy (i.e. wind, solar, storage, etc.). As these renewable technologies become more efficient, lower cost, and more diverse, that percentage will increase.

How much extra does it cost to get ALL green electricity through TailWinds?

Our Tailwinds program supplies green energy at a premium of $0.013 per Kwh.  The customer could look at their bill to get their monthly kWh usage and multiply it by $0.013 to see what the total monthly premium would be to get all green electricity.  The customer should keep in mind that OTP’s energy mix is made up of about 20% renewable energy so that before purchasing any additional Tailwinds energy, they are already 20 % green. This will increase to about 30% over the next 2-4 years.

When do you think natural gas prices will increase?

From sources we see, it appears that NG prices will remain low through 2025 or so.

Do you think Otter Tail will ever build another coal plant?

No, not in the foreseeable future.

If the goal is local self-sufficiency, what support is there from the power companies for local power production?

Otter Tail’s support is for projects that are affordable, reliable, and environmentally friendly.  Also, we wouldn’t favor cross-subsidization.  In other words, projects that would give financial benefit to one group of customers at the expense of another group of customers.  However, we are happy to work with local entities to see if power production projects could be structured to meet the goals of all parties simultaneously.

Mike Reese, Renewable Energy Director at the University of Minnesota Morris West Central Research and Outreach Center:

Do you think natural gas depletion will follow Hubbert’s peak curve?

Hubbert’s peak postulates that the production of oil in a given geographical area will follow a bell curve. In other words, production increases rapidly in the beginning as the rate of new discoveries and infrastructure development is high and tapers off at the end when there is no more to discover and infrastructure is not a limiting factor. This means there is a peak in the middle where production is at a maximum.

I am not an expert in the field of fossil fuel extraction, but Hubbert’s curve seems to govern experience with oil and gas extraction in the past except for two factors: significant changes in technology or policy. For example, the idea that we had reached peak oil was accepted as true a few decades ago until the technologies of horizontal drilling and fracking dramatically increased the amount of recoverable oil (and gas) in some geographic areas. This essentially shifted or reset Hubbert’s curve. A big change in policy like a price on carbon could do the same (but in the opposite direction) by making known reserves unprofitable to recover.

So my answer is yes, natural gas production is in accordance with Hubbert’s curve, but any big change in technology or policy could change that. So I think Hubbert’s curve is descriptive when looking back, but may not be predictive when looking forward.

Is the best way for me to reduce my carbon footprint to use less KwH or convert some technologies from gas?

The most cost effective way to reduce an individual’s carbon footprint is to use less energy whether it is electricity, natural gas, propane, fuel oil, gasoline, or diesel fuel.  Once efficiency is maximized, then look for other options such as switching from fuel oil to natural gas (which burns cleaner) or adding a solar PV system to your home and displace grid power.

Do you live in Stevens County and have questions or concerns about the energy system? Let us know by texting “energy” to 63735, or chat with us at bit.ly/rcd-energy!

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