Power Supply

Bill Blackburn
Acting Vice President of Power Supply

The Power Supply Department has the responsibility of providing the power that Big Rivers’ member-systems require for meeting the needs of their more than 109,000 member-consumers. Through its PPA with one of the E.ON U.S. Parties, the member-systems’ SEPA allocations and the wholesale market, Big Rivers is able to provide economical wholesale power. In 2005, the average wholesale price to the member-systems for their rural substations was $35.19 per MWh and for large industrial customers, the rate was $30.70 per MWh.

In addition to providing the power needs of its member-systems, Big Rivers also can sell power from the PPA that is not needed to meet the member load requirements. The sale of this excess power in 2005 resulted in more than $25 million in margins above the cost of purchasing the power and any other transmission related costs. The sales of the excess power have, since the implementation of the PPA in mid 1998, resulted in more than $100 million in additional margins to Big Rivers.

Big Rivers is a member and part owner of APM, which is headquartered in Indianapolis, Indiana, with a regional office in Cary, North Carolina. APM serves as an agent in marketing some of Big Rivers’ excess power and also provides additional risk mitigation and power supply portfolio modeling services. The power marketing services are provided out of the Cary office with the other services provided from the Indianapolis offices.

MISO implemented its wholesale electricity market on April 1, 2005. While Big Rivers is not a member of MISO, it determined it would be in its best interest to participate in the new market. Through APM, Big Rivers spent considerable time and effort in the training necessary to be a registered participant and prepare for the market¡¦s debut. Big Rivers is participating in both the hourly and day ahead markets. In order to market to the southeastern portion of the country, Big Rivers maintains 100 MW of firm transmission across Tennessee Valley Authority.

In 2005, the Power Supply Department began working with personnel in the Engineering and Operations and Information Technology Departments in an effort to obtain near real time load data. Such data would allow Big Rivers to be better able to forecast member needs and market opportunities. This project should be completed in 2006 and the expected payback on the $900,000 investment is approximately one year.

A Long-Range Load Forecast and an Integrated Resource Plan were completed and submitted in 2005 to the RUS and KPSC respectively. In 2005, contracts were negotiated for firm, limited interruptible and fully interruptible power sales to Kenergy to provide a portion of power needed in 2006 to serve its two smelter loads. Power Supply also works with the member-systems in developing quotes for power on new commercial and large industrial economic development prospects.

As a part of managing the member-systems’ SEPA allocation, the Power Supply Department also participates in the Southeastern Federal Power Customers group to negotiate maintenance work for two hydroelectric facilities and work on other issues relating to the dams on the Cumberland River.