Detroit Lakes Public Utilities Customers Should Not See Higher Rates From Winter Storms

DETRIOT LAKES (KDLM) – Detroit Lakes Public Utilities’ customers should not see higher electric rates as result of winter storms across the United States.

Detroit Lakes Public Utilities says they do not expect to raise rates to its electric customers, due to the historic cold weather that caused significant increases in energy demand on the U.S. power grid last week. Detroit Lakes Public Utilities also does not expect a rate increase from its power suppliers.

Severely cold temperatures throughout the region caused a high demand for electricity. At the same time, many electric generating plants failed to perform during the extreme weather event, particularly in the Southern U.S.

Wind units failed to perform due to lack of wind in the region, along with icing conditions in the south. Solar failed to perform due to heavy cloud cover. Coal and gas generation in southern states failed to perform due to freezing of gas wells or freezing at the plants themselves. In addition, limited gas supplies across the region played a significant part in the crisis.

Detroit Lakes Public Utilities has two power providers. Western Area Power Administration (WAPA) supplies a specified amount of hydroelectric power to our community from the dams on the Missouri River. Missouri River Energy Services (MRES) supplies the remainder of the power for Detroit Lakes Public Utilities. MRES has a diverse mix of resources in terms of both fuel sources and geographic locations, including hydroelectric, coal, natural gas, wind, solar, diesel, and nuclear.

All MRES electric generation plants operated to the fullest extent possible during the emergency event and performed well. The natural gas power plant, located in central Iowa and operated by MRES, switched to diesel fuel operation when natural gas was curtailed.

During the winter storm, several MRES member communities in Iowa, Minnesota and South Dakota successfully operated their local diesel generators to support power supply in the Southwest Power Pool region. SPP is one of two regional transmission organizations (RTOs) serving MRES members that oversees the reliability of the electric grid and operates a wholesale power market in the central U.S. Members with generating units in the Midcontinent Independent System Operator (MISO) RTO region were not asked to run their generators.

“The diverse resources in the power supply mix that serves Detroit Lakes Public Utilities, provide protection for our community against the unavailability of particular fuel sources, such as wind and natural gas during this event. Along with providing energy and reliability support for the region, the generating assets of MRES provide protection against high market prices,” a press release said.

The MRES generators, which operated during the crisis, will be paid the market price for energy generated. These market payments will cover the costs of generation. Additionally, MRES has an energy risk management program that enables it to maintain stable rates during extreme events, like the polar vortex. Under the program, MRES makes advance energy purchases in the MISO market at fixed prices. These fixed-price purchases lessen the exposure to fluctuating prices in the energy market and add another layer of financial protection for MRES and its members.