GRE: Dedicated to serving its members

Great River Energy, Arrowhead Electric Cooperative’s wholesale energy provider, is a not-for-profit electric cooperative owned by 28 member distribution cooperatives. The organization generates and transmits electricity for those members. Great River Energy’s member cooperatives range from the outer-ring suburbs of the Twin Cities, to the Arrowhead region of Minnesota, to the farming communities in the southwest part of the state. Its largest distribution cooperative serves more than 123,000 member-consumers, while the smallest serves approximately 2,400.

Great River Energy’s cooperative structure has proven to be central to its continued success in delivering on its mission. Collaboration with members, stakeholders, community leaders and employees has made Great River energy the strong organization it is. Like other cooperatives, Great River energy exists to serve its membership and is dedicated to helping the communities in which it operates.

Great River Energy is member-controlled and governed by a democratically elected board of directors who are electric cooperative members themselves. Board members establish rates and develop policies in the best interest of Great River energy and its members.

Great River energy owns and operates nine power plants which generate more than 2,650 megawatts (MW) of electricity, plus the cooperative purchases additional power from several wind farms and other renewable energy generating facilities. Great River energy’s generation capability consists of a diverse mix of baseload and peaking power plants- including coal, biomass, natural gas and oil plants.

Great River Energy owns and operates more than 4,500 miles of transmission line and owns or partly owns more than 100 transmission substations. Great River Energy’s more than 860 employees are dedicated to serving its member cooperatives with integrity and accountability in an environmentally sensitive manner.

Serving members with reliable electricity

Great River Energy continues to make improvements to existing plants and upgrade its electricity delivery system. While the demand for energy has slowed due to current economic conditions, Great River Energy must continue to prepare for future generation needs.

In July 2009, Great River Energy’s newest peaking facility-Elk River Peaking Station- came on line. The 175-MW natural gas peaking plant will normally operate during times of highest electrical demand. Great River energy also brought online the Arrowhead Emergency Generation Station- an 18-MW, diesel-powered emergency standby electric generator built to help improve the reliability of electric service in the Arrowhead region of Minnesota.

 Construction continues on Great River Energy’s newest power plant, Spiritwood Station, a unique combined heat and power plant in North Dakota. The facility will provide electricity to the grid and steam to power a nearby malting facility; it is expected to begin operations in late 2010.

Great River Energy continues to be one of the several regional utilities developing the first major upgrade of the electric transmission infrastructure in more than 25 years. Known as CapX2020, the project will help ensure continued reliable service for years to come. The CapX2020 projects continue to move forward, reaching several major permitting milestones in 2009. In April, the Minnesota Public Utilities Commission granted the CapX2020 utilities a Certificate of Need to construct three 345—kilovolt electric transmission lines in Minnesota.

DryFining, Great River Energy’s world class technology designed to refine or beneficiate lignite coal through a drying and segregation process, began operation late in 2009. The DryFining system supplies refined lignite coal-called DryFine- to Coal Creek Station, Great River Energy’s largest generation facility. This coal beneficiation process will increase plant efficiency and reduce emissions DryFine will also fuel Spiritwood Station when it begins operations.

In May, Great River Energy became a member-owner of ACES Power Marketing (APM), a national risk management and trading services company headquartered in Carmel, Indiana. Membership in APM allows Great River Energy to better manage costs in the wholesale power market. APM acts as Great River Energy’s agent for energy market transactions and provides portfolio management, risk management and other services.

The cost of electricity

Electric rate increases at both the wholesale and retail level is a trend among utilities across the country, and one that won’t be ending soon. Great River Energy and its members must address the rising cost of power.

Great River Energy’s 2009 operating revenue was more than $150 million below budget, and $40 million below 2008 levels. Also, 2009 was the second consecutive year of cooler than normal summer weather, contributing to reduced power sales. Despite these challenges, Great River Energy was able to achieve a margin of nearly $30 million in 2009 with a power cost adjustment (PCA) to our members of less than $2 million for the year.

Great River Energy is taking the necessary steps to navigate these tough economic times. The business is running with even greater efficiency, resulting in reductions in operating and maintenance costs. The organization has delayed the in-service date of projects and postponed new infrastructure investments to reduce capital expenditures. Through a business improvement process, employees achieved more than $12 million in savings by finding better ways to conduct business. Cost management efforts led to a rate increase of only 2.3 percent in 2010 for member cooperatives, considerably less than what was projected. While 2009 proved to be a challenging year, Great River Energy remains well positioned for the future and will continue to provide its members with reliable energy at affordable rates.

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