Say Anything Blog

I had a reader email me a scan of the newsletter he gets from his electrical coop.  You can see it for yourself.

The background is that a few years ago, Minnkota Power committed to leasing a bunch of wind generation to comply with requirements put upon them by the Minnesota and North Dakota state governments.  (Stupid is as stupid does). 

Reading this newsletter and the one from the president of Minnkota (page 10) it seems that Minnkota didn’t NEED the power.  And it seems they couldn’t use the power because of base load considerations.  That is they have to keep their coal fired plants up and running in case the wind quits blowing. 

So their business plan to comply with the mandates was to sell power on the open market.  Well it turns out that the open market isn’t what it used to be.  For whatever reason they aren’t able to sell the electricity for what it costs Minnkota to have it produced for them.

Because of that Minnkota is increasing the amount they charge to the local cooperatives.  (Minnkota produces power and sells it to the regional cooperatives that own them). 

So the bottom line is that customers of the regional cooperatives are going to be paying an extra

half-cent for every kilowatt they use.  It only costs Minnkota two cents to produce a kilowatt, so that’s a pretty significant increase.  On the retail side, Nodak Electric which sells Minnkota generated electricity locally charges 7 cents a kilowatt and 5 cents a kilowatt offpeak.  So the consumer is paying a surcharge of between 7 and 10 percent. 

This is what happens when state legislatures meddle in things that are too complicated for them to understand.  Why in the world should you or I get stuck paying for electricity that didn’t need to be generated to satisfy a bunch of Bismarck hippies?

But the money’s spent so what’s to be done.  I think we should go the the state legislators and tell them that they caused this mess and that they should dig deep in their pockets and pay up the 20 million dollar shortfall themselves.  It’s time for them to step up. 

*note I wrote nickel before when I meant half cent.  I must be losing it.  I had my percentage comparisons right so I knew that it was an half cent.  Sorry.  I blame the fact that UND is transitioning to Division 1 football.