Dakota Energy to Lose Access to Hydropower Benefit if Lawsuit Successful
Dakota Energy Cooperative would lose access to the hydropower allocation benefit from the Western Area Power Administration (WAPA) if the cooperative is successful in obtaining a buyout number from a long-term contract it signed in 2015 with its current wholesale power supplier East River Electric Power Cooperative.
Hydropower makes up about 17 percent of Dakota Energy’s power supply that is furnished through its contract with East River Electric and is the lowest cost power available to the cooperative family. It would have a significant impact on Dakota Energy’s current rate if they didn’t have access to low-cost hydropower.
History of the WAPA Allocation
Decades ago, the allocations of hydropower from the dams on the Missouri River were divided up between the region’s consumer-owned utilities: municipal electric systems and electric cooperatives. Each system was able to access a certain amount of power based on their size at the time. The members of East River Electric agreed to aggregate their allocations from WAPA at the East River Electric level to create efficiencies and so they could all share in the benefit. That continues today, as East River Electric holds the WAPA allocation and handles the rate, billing and public policy issues that come with holding a WAPA allocation on behalf of its member systems.
Dakota Would Lose Access to Low Cost Power
Because the member cooperatives agreed to share in the benefits of the WAPA allocation, Dakota Energy’s intention to leave the East River family of cooperatives would result in a forfeiture of the benefit of this low-cost, renewable power source. If they didn’t have the benefit of the WAPA allocation, Dakota Energy’s current rate would be about 11 percent higher than it is today.
Being part of a large cooperative network has a lot of benefits – limited market exposure that shields cooperatives from a volatile energy market, operations and maintenance benefits, and stable rates. Access to low-cost, renewable hydropower is one of the most valuable benefits to being part of the cooperative power supply family.