Director, Transmission & Security; Neil Rowland

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Can you spare some change? I know I can!  I have change all around me, and I will be happy to share it with you.  Unfortunately it is not the type of change that jingles in your pocket, but the inevitable “things never stay the same” type of change.  The electric Utility industry is always changing, and keeping up with those changes is a big part of what KMEA does for its members.  The Southwest Power Pool (SPP) Regional Transmission Organization (RTO) is continuously updating its rules and regulations.

Those rules are kept in the SPP Tariff, a living document that would be out of date as soon as you finished printing it.

SPP has a group called the Regional Tariff Working Group (RTWG) that meets each month to review and approve changes to the Tariff made by other stakeholder groups and committee’s within the SPP. Stakeholder groups will submit a Tariff Revision Request (TRR) that details the planned change.  It is up to the legal team at SPP and the members on the RTWG to make the words fit the intent of the new change.

You could say it is Tariff-fying work, but in reality, it is important to review and look at planned changes from the Municipal point of view. Making sure that the new rules are fair and not burdensome or overly beneficial to any specific group of members is very important.

After the RTWG has finished its work the changes to the tariff are sent to the Markets and Operations Policy Committee (MOPC), a committee where each SPP members gets 1 vote, and then to the Board of Directors for their approval before they are submitted to FERC.

Because KMEA has an active member on the RTWG it can stay abreast of all the new changes that are coming out of the SPP member driven processes. Hopefully in the end that knowledge will allow all of us to better handle our change.

Labor Pooling Meeting in Goodland

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Representatives of the Cities of Colby and Goodland toured the Goodland Power Plant and discussed the possibilities of pooling labor services for plant operators.  The cities continue to research the pros and cons of pooling and how it could impact each city and the region.

Charlie Herr from Arthur J. Gallagher met with representatives of five Cities in Russell

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Charlie Herr, Arthur J. Gallagher Risk Management Services, Inc. explained the benefits of Pooling insurance coverage as well as stop loss self insurance to representatives of the Cities of Russell, Colby, Goodland, Moundridge and Burlingame. The meeting was hosted by the City of Russell on March 8th.

From the Desk of Managing Director, Electric Operations – Sam Mills

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As you know, the electric utility industry is and has been changing for some time. The transformation as it is called by some is being driven by a number of key factors. A recent online survey conducted by Utility Dive revealed many of the same issues that we discuss regularly. An aging workforce, regulations, aging infrastructure, integrating renewable energy, and stagnant load growth are the top five concerns of the respondents.

The top pressing challenge is….you guessed it, an aging workforce. I thought I was the only old one around here but obviously not. The challenge presented by the retirements of employees and the knowledge that leaves with them is leaving a void in the industry that is concerning and may be crippling to some small systems.

As regulation of the industry has expanded over the years it has brought with it a variety of issues. One of which is finding money to deal with these regulations within a budget that is already stretched to the max.

Wind energy and solar energy installation have presented some unique challenges to the industry as a whole. Wind has become a much larger force in the SPP footprint than most everyone imagined. In the past several months wind has been responsible for producing at or near 50% of the energy in SPP. Residential solar installation brings different challenges to your utility, metering and recovery of the fixed costs of your utility are just a couple of them.

Stagnant or negative load growth is another aspect of the electric utility transformation. This puts a strain on rates as the utility tries to generate revenues to address the increasing cost of operation. At some point in the future will your load begin to grow? Nobody really has the answer.

I found this survey very interesting and quite telling of the industry as a whole. I have only written about a small portion of the survey but you can click on the link to read it in its entirety.

Enjoy!

https://s3.amazonaws.com/dive_assets/rlpsys/state_of_electric_utility_2016.pdf

KMEA Offers Electric Distribution System Assessments to Member Cities

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In 2016, KMEA contracted SEGA Engineering to complete Distribution System Assessments for the cities of Girard and Garnett in order to determine the value of the Assessments.  After reviewing the results, it was determined that these assessments were indeed valuable and could assist cities in determining problem areas, future projects and funding needs.  
KMEA has again contracted with Sega Engineering and will offer these assessments without charge to all member cities.  
Contact Gerry Bieker at Members Services for more information or if you wish to include your city in these assessments.   
913-660-0232

City of Garnett Distribution Assessment – FINAL

EMP 3 Cities Meet in Neodesha

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The February EMP 3 Meeting was held in Neodesha.  Along with the normal agenda items, EMP 3 member cities listened to a presentation by William Hiller, Maurice Moss and Aiden Smith from the Southwestern Power Administration providing information on 15 year contract renewals.

Natural Gas Industry – 2016 Review, Dixie Riedel

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In the history of the natural gas industry, 2016 will be remembered as an eventful and record setting year.

Excess natural gas at the end of 2015 and warm winter temperatures kept prices low at the start of 2016. The summer of 2016 reversed the trend as natural gas-generated electricity hit record levels and by summer’s end, expectations for a colder winter drove natural gas prices up.

Mid-continent daily index prices posted a low of $1.28/MMBtu on March 5th and a high of $3.73/MMBtu on December 17th.  US natural gas active futures hit $3.99/MMBtu on December 28, 2016. This was the highest level since December 2014.

Storage levels ended the winter withdrawal season (03/31/2016) at the highest end-of-season on record.  Storage inventory reached an all-time record high level of 4,047 Billion Cubic Feet (Bcf) for the week ending Nov 11th.  Much colder weather in December led to back-to-back weekly withdrawals greater than 200 Bcf; dropping storage levels below the five-year average for the first time all year last.

In August the active natural gas rig count fell to 81.  This is the first time in 29 years natural gas rig count fell below 100.  A year prior the active rig count was 233.  The rig count peaked at 1,606 rigs on September 12, 2008,

2016 was the first year the U.S. became an exporter of natural gas.  This came about with exports of Liquefied Natural Gas (LNG) and more cross-the-border pipelines being built to take gas into Mexico.

Looking ahead, the EIA (U.S. Energy Information Administration) estimates natural gas prices averaging $3.27 per MMBtu in 2017. Prices averaged $2.49 per MMBtu in 2016 and $2.63 per MMBtu in 2015.

K.C. Wolf Visits KMEA

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Dixie Riedel was the target of K.C. Wolf on Valentines Day!  Dixie’s husband Phil had a little something to do with K.C. Wolf delivering Flowers and Chocolates to her at the KMEA offices.  Of course, the entire staff knew about the surprise and anxiously awaited his arrival.

Dogwood Energy Facility Visit

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KMEA Staff met with SEGA Engineering and Dogwood Energy Staff on February 9th, 2017. Steven Hilger, P.E. (NAES), Plant Manager provided a tour of the facility and gave an in depth report on operations.  The meeting took place as part of the “Due Diligence” process prior to KMEA entering into an agreement with Dogwood Energy.