Western Nebraska Observer - Observations all along the line - Kimball & the Southern Panhandle First

By Sydney Yalshevec
Reporter 

Kimball officials discuss changes with MEAN

 


Kimball will be seeing a rate increase in their electricity bills in April. In an effort to prepare residents for the increase, the city has had letters published explaining the purpose for the rate increases. MEAN is the company through which Kimball obtains power and, unfortunately, they only see the prices going up in the foreseeable future.

On Tuesday, February 18, The Board of Public Works and City Council held a joint meeting. At this meeting MEAN representative, Andrew Ross, explained to the best of his ability the current situation in which MEAN has found itself.

“I want to do my best to summarize what’s going on as best I can and help you understand. Just a little background first. MEAN is an organization that is a wholesale electrical provider only, does not own transmission, provides energy to wholesale customers only,” Ross said.

MEAN is not owned by investors and when MEAN does make money they don’t worry about paying investors. MEAN also carried an advantage in that it was situated in the middle of the grid that the United States has set itself up with. The grid is a way for the country to divide itself in order to more effectively disperse power. It’s split into the east, the west, and Texas.

“MEAN had the ability to move electricity in different markets in 2000 and 2001. Basically there was a mess in California concerning power. MEAN was a benefactor of that, because we operated in both grids,” said Ross

After witnessing the problems California had faced, MEAN made a decision to try for more full ownership of power plants. This would allow MEAN to be independent from the electricity market should they ever find themselves in a mess like California.

“MEAN made a decision in 2001 to build a coal power plant. Now due to the great cost and the time it takes to get the plant up to regulation, the plant did not start producing until about ten years later,” Ross said.

Ideally, MEAN had planned to own its own power plant so that it wouldn’t have to depend on others for power and be at the mercy of market prices when concerning power. As good of an idea as it had been at the time, thirteen years later the plan they had isn’t doing so well.

“Now remember that was ten years ago that the plant was planned for, and now we kind of have this production of natural gas that’s exploding. Hydrolic fracking is a way to drill vertically and horizontally in order to release natural gases. That results in there being a bunch of natural gas in the country which has tanked the price,” Ross said.

The price of natural gas has gone down a considerable amount since 2008. In 2008, the price for natural gas was twelve dollars a unit, now it is currently three dollars a unit. In fact, there is such an abundance of natural gas that some companies that are drilling for oil keep hitting natural gas and just burn off that natural gas. It’s so cheap and in such quantity that people are not afraid to waste it.

“What does that mean for MEAN? Well they just made a long term commitment to coal which is a stable power source right as the natural gas prices tanked,” Ross said.

Unlike natural gas which is a “load following”power source, coal must always be ran at full power, there isn’t a way to fluctuate the amount of power put out based on need. Coal plants are run at maximum power and then the excess power is generally sold. Unfortunately, with the cost of natural gas so low, MEAN is having little luck selling that power.

“Also, with things like planet conservation and global warming, there are restrictions and regulations placed on coal power and production,” Ross said.

This all adds up and causes it to be difficult not only for MEAN to produce their power but also for them to sell their power. MEAN can no longer sell at wholesale prices. Extra power from different places is pooled and sold at an average rate. This means that MEAN has energy that costs quite a bit to produce.

As a result of this, MEAN has to raise the prices of the power that they are selling for prices they can choose.

“I want to be honest with you, I don’t see the prices going down in the foreseeable future. MEAN is like a big ship, and we didn’t see the obstacle in our path until it was too late for us to turn and avoid it,” Ross said.

The City Council wanted to know if there was anything that residents could do in order to lessen the burden on themselves without maybe throwing MEAN to the wolves. The logic being, if prices on power go up, people stop using as much power in attempt to keep their costs down.

“Well, we do discourage power use during peak hours. If there is more power usage during the peak hours, the plant has to work harder to produce that power and that costs more for MEAN,” Ross said.

Ross made suggestions for people to try to hold off on using a lot of power, cooking, doing laundry, until after the peak hours. By doing that, residents will not only save themselves money, but also save MEAN some money.

“However, these power conserving techniques only really work if everyone does them. We understand we can’t change people’s habits, but if everyone tried to make a change like this it would be beneficial for everyone,” Ross said.

Ross made it clear to the council that he was available to answer any questions that might pop up concerning MEAN. The council has the ability to get into contact with Ross if any other questions come up from either the council or residents.

“We understand that no one likes this situation. We don’t like it either. We just want to try to offer the best explanations possible so everyone understands,” Ross said.

 

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