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Keith Olson offered our invocation and President Anthony followed up with reminders for events that have since occurred (reading Josh the Otter at McKinley, clean-up of the bush line we planted by the water tower, and groundbreaking for Spies Park) and one still to occur -- working the Rotary set-up at Summerfest this coming Friday and Saturday. Brags and fines followed: John MacFarlane noting we were not meeting at the park; Keith Olson reporting on an enjoyable outing to various state parks, including Moose Lake, St. Croix and Jay Cooke; this writer for spelling pavilion wrong in one of two places in the prior Rounds; Pete Wasberg to express his appreciation to our speaker for the day; Kathy Austvold in anticipation of missing two weeks, the second week taking a river cruise from Memphis to New Orleans; Randy Kempfer for lobbying the Minnesota's congressional delegation on behalf of the American Optometric Association and donning the otter costume for OLV students; and Jamie Larson for his lobbying state and national legislators the prior week on behalf of insurers. John MacFarlane then introduced Brad Tollerson, Vice President of Energy Supply at Otter Tail Power Company. John noted Brad is a proud graduate of NDSU (there seemed to be an unspoken question by John of how that could be possible). Born and raised here, Brad said he first visited our club when he received an award for the Four Way Test essay he wrote in high school and then came back about 15 years ago to report on a trip he made to Cuba. He has been with Otter Tail for 25 years and noted that it has some of the lowest electrical rates in the country while at the same time being one of the best utility companies for reliability nationwide. Talking about the history of coal use, Brad stated that in 2020, we were using only one-third of what coal was as a percentage of electrical production at its peak. Right now, about 30% of Otter Tail Power's electrical production comes from wind (from 2005 to 2012, the company added approximately 240 megawatts of wind resources, accounting for about 20% of its electrical supply). Alternate energy sources have been encouraged by government subsidies -- the production tax credit for wind (equal to about one-half of the cost of the first ten years of operation) and the investment tax credit for solar (allowing a company to recoup up to 30% of upfront capital costs). Change has been necessitated by increasingly stringent environmental regulations on coal units, concerns over global climate change and the desire to prevent the global temperature from rising two degrees Centigrade. At the same time, electrical production using natural gas has exploded, with fracking driving prices to an all-time low. Costs associated with wind and solar are primarily in the construction phase with low marginal costs. And, as to solar, costs have gone from $125 to less than $45 per megawatt hour ion the last five years. The problem, of course, is that renewable generation is intermittent, necessitating "dispatchable" resources to cover times when the renewables are not generating sufficient power. This means continued reliance on coal, natural gas or hydro; Brad said that carbon emissions from natural gas generated electricity is about half that of what coal generated plants emit but that they are still working to improve that ratio. New technologies that offer hope in this area are improved battery storage, hydrogen generation and carbon capture and sequestration; all of these, however, will take time. Brad talked about the Hoot Lake coal plant, indicating it first generated electricity in 2017. The first major coal unit on the site, referred to as Hoot Lake 1, was built in 1948 and operated until 2006. The two units that have just now been shut down were built in 1959 and 1964; the first of the two shut down the evening prior to our meeting and the other one was down to an estimated 24 to 31 hours of operation as of our meeting. The closure was made possible by various new generating capabilities. The first was the construction of the Merricourt Wind Energy Center ("MWEC"), a 150 megawatt facility that started operating this past December, and which contributed to the largest rate base increase in Otter Tail's history. This wind farm has 75 wind towers located over 14,000 acres. Otter Tail also brought on line the end of this past April its Astoria Station, a 250 megawatt natural gas facility, sitting on four acres. The company is now embarking on the Hoot Lake Solar Farm; when completed, it is expected to happen in May of 2024, 35½% of its electrical production will be through renewable resources. That means by 2025, Otter Tail will have reduced its carbon emissions by 50% since 2005. The solar farm will provide up to 49.9 megawatts of alternating current electricity, utilizing tracking solar panels (following the sun). Brad was asked about the life expectancy of wind turbines and he responded that they are expected to run for 35 years. A problem still being addressed is how to dispose of the blades which have a fiberglass outer surface over a steel frame. This was a very informative presentation and we thank John for arranging it and Brad for his thoughtful presentation. |
