A new joint CFC/NRECA special report, “Planning for and Managing Indeterminate Electric Loads,” is now available as a PDF download from the CFC Member Website.
The report includes four electric cooperatives case studies that describe different approaches to plan for and manage emerging indeterminate loads. These loads can be characterized by their size, power usage requirement, growth rate and location on the grid.
Cannabis grow houses and cryptocurrency mining are two examples of indeterminate loads that are becoming more common in cooperative service territories. These businesses reflect how new technologies, societal shifts and public policy changes have ushered in new, energy-intensive loads and, along with them, new risk factors.
Electric Cooperative Case Studies
The case studies featured in the report spotlight different approaches cooperatives are taking to evaluate and manage risk from these loads.
Indian Electric Cooperative (IEC), a northeastern Oklahoma-based distribution system, currently serves roughly 150 cannabis operations with about 15 MW of total load. One of the key strategies IEC uses to manage risk from these loads is assessing full construction costs. For each installation, IEC requires three steps of compensation, including contributions-in-aid-of-construction (CIAC), an impact fee, which is the CIAC for the transmission and substation upgrades, as well as a two-month deposit. When working with cannabis growers, IEC also emphasizes planning ahead and communicating expectations clearly.
Tri-State Generation and Transmission Association (Tri-State), one of the largest G&Ts in the United States, now has 10 years of experience with cannabis farms. In that time, the cooperative has learned effective strategies to serve these unique loads and maximize the business potential. While the Colorado systems did not assess additional fees or create a separate rate class for growers, they did ensure their line extension policies were clear, and many required an upfront deposit equal to two times the highest monthly bills from the growers.
The report also provides examples of how cooperatives are managing large loads from cryptocurrency mines. In the case of Grundy County Rural Electric Cooperative, a distribution system based in northeast Iowa, an interruptible rate structure was developed that consisted of a price-per-kWh plus a demand charge. The cooperative also worked out an agreement where the commercial member who owned the mine agreed to pay for all the connection and construction costs involved. With Swisher Electric Cooperative (SEC) in Texas, the risk had less to do with the load itself, since the crypto mining facility in question is not connected directly to the distribution system, but rather potential risk exposure from the commercial member doing business in ERCOT.
The cooperative sought legal counsel and required the member to put down a security deposit and pay a monthly royalty payment. Most significantly, SEC reached an agreement with the member that it would only draw power from the windfarm it owns and not power from the cooperative’s transmission line.
To learn more about these projects, download the report.