The head of the United Electric Cooperative is explaining the entity’s relationship with the Lake Region Electric Cooperative, which serves members in seven counties in northeastern Oklahoma.
AECI is part of a three-tier system that provides affordable and reliable electricity to electric cooperative members. The system is uncommon in the industry, but CEO David Tudor said he doesn’t see any downsides to it. The structure of the process allows each layer to focus on its core competencies.
“Distribution cooperatives are very good at serving residential and commercial membership owners,” Tudor said. “They don’t have to worry about transmission because the transmission co-ops that own Associates are good at running their transmission systems. Associated doesn’t have to worry about the quality or challenges of transmission; our six transmission co-ops take care of that.”
Americans have seen the national headlines about America’s electricity reliability problems. The reliability issue is real, Tudor said, as there has been a shift over the past 20 years not only due to environmental concerns, but also due to the push for renewable resources. But some companies in the utility industry have had to phase out baseload power plants on their own schedules. Tudor said the timetable was driven by the federal government because of climate change.
The summer heatwave that hit earlier this year made it difficult to keep electricity flowing. The company typically sees its hottest temperatures in July and early August, but that happened in mid-June this year, Tudor said.
The biggest challenge AECI faced during the heatwave was planned and unplanned outages at some coal and natural gas power plants. Turdor said gensets are typically able to meet energy demands in the summer and winter, but there is little room for error when units are taken offline due to mandatory repairs and planned maintenance. The company relies more on buying electricity to supplement and operate so that every megawatt is used to generate the fleet. AECI members were asked to help save electricity in the early summer.
AECI currently uses wind, hydroelectric, coal and natural gas power plants to generate electricity. The company wants to add megawatts to its existing fleet to improve reliability in the future. With baseload power plants being phased out in various regions, company employees feel that generating capacity in the region appears to be scarce, Tudor said. AECI has been adding megawatts of capacity to its natural gas fleet to increase capacity. Adding megawatts of natural gas is not only good for company members, but also good for the environment because it’s more dispatchable and cleaner than coal, Tudor said.
To help address historically high load growth and past summer peaks, the company is beginning an early phase adding up to 900 megawatts of natural gas-fired power to its fleet. Tudor said he expects to launch new gas-fired power generation in late 2026.
AECI signed a deal this year with a company developing small nuclear reactors that has three large developers trying to bring the technology online. Tudor said the protocol was used to help observe the development and post-production of the technical process. One of the earliest units could come online in 2028. Tudor said that while the technology is not a near-term solution, they will continue to be involved in the project to watch it evolve.
“This technology does not exist anywhere in the world today,” Tudor said. “Companies are phasing out coal plants claiming they will have significantly reduced or no carbon emissions by a certain date, but they have no plans to replace dispatchable megawatts with proven technology.”
Tudor said AECI was not opposed to renewable energy, but it did oppose decisions that were less reliable and affordable for members.
“Associated is already a leader in wind energy development in the Midwest with 1,240 MW. The most recent addition of about 470 MW came online in 2020. We also modelled the possibility of adding solar to our portfolio and have been Look for viable sites on our website. We can add systems for solar projects to them,” Tudor said. “Supply chain shortages and solar panel production issues have significantly raised prices and slowed the process. We think the right thing to do at the moment is to wait until costs stabilize. When the price is right and the location is right, it means ‘good for members’ ‘, I think you’ll see us pursuing some degree of solar development.”