Winter Storm Fern unleashed extreme cold weather, heavy snow, and ice across most of the Midwest and the East Coast at the end of January. In our region, below normal low temperatures coupled with unplanned power plant outages (due to weather or maintenance) and low wind generation strained grid reliability. This storm resulted in an increased demand for energy across the Midwest while there were decreased energy resources available. To meet this demand, more expensive sources of energy were required resulting in higher energy and natural gas prices. 

As this occurred, our wholesale power provider – Dairyland Power Cooperative – was unable to utilize one of its primary “baseload” power plants due to an unplanned maintenance outage. Baseload refers to a facility that can operate consistently and bring stability to the grid when needed. Baseload plants most commonly are powered by coal, natural gas, or nuclear energy, while intermittent generating resources, like wind and solar, may only be available at certain times (when the sun shines and the wind blows). This forced Dairyland to purchase power at higher prices than budgeted from the regional power market (MISO). As a result, actual wholesale power costs for January were considerably higher than forecasted, triggering a power cost adjustment (PCA) charge on upcoming Price Electric Cooperative’s (PEC) wholesale power bills. This event cost Dairyland Power Cooperative $30 million. This amount is being divided across the 24 Member-owner Distribution Cooperatives of Dairyland Power, one of which is PEC, and our share is roughly $408,000. 

PEC expects to implement an estimated monthly PCA charge of $.0166/kWh on the March through June monthly bills (for February through May electricity use). This charge is a pass through from Dairyland Power. For our average member using 1,000 kWh per month, that would be an extra $16.60 per month. 

Throughout the event, the majority of Dairyland’s other generation resources and load management tools contributed to grid stability, avoiding further cost escalations. Had the generation resources not been available, the PCA charge would be more severe. Additionally, members’ participation in the load management program and reducing energy where you could, helped support Dairyland Power and PEC in avoiding the need to purchase even more additional power from the grid during this time of very high pricing. If the energy available on the grid was not adequate to this significant increase in demand and available to purchase through the MISO market, PEC may have been required to implement its Emergency Load Reduction Plan which entails scheduled rolling 30-minute outages throughout the service territory.  Thank you for making a difference at a critical time.  

This event is a reminder that power prices are volatile and subject to extreme weather conditions. Dairyland, as our G&T Cooperative, remains committed to a diversified resource portfolio and enhanced transmission infrastructure to help mitigate future unforeseen financial impacts.  

“This storm had a major impact across most of the United States, including the Northwoods we call home, and we are experiencing the effects of that. We will continue to work with Dairyland Power to help reduce the impact of another storm like Fern on Price Electric members,” said PEC CEO Jeff Olson.