New Ulm Public Utilities in Minnesota has been able to reap the benefits of renewable energy while boosting its revenues by about $300,000 with the help of its wholesale power supplier, South Dakota-based Heartland Consumers Power District.
New Ulm Public Utilities, like other utilities in the state, is required to generate or procure 25 percent of their total retail electric sales from renewable sources by 2025.
Aside from building a wind farm or solar power facility to generate renewable energy, one way to meet that requirement, especially for utilities that do not produce their own electricity, is to buy renewable energy credits (RECs).
Each REC is unique and represents 1 megawatt hour (MWh) of electricity. A REC can be bought or sold, or the regulatory value of the REC can be claimed by retiring it.
The validity and status of RECs is verified through the Midwest Renewable Energy Tracking System (M-RETs), which tracks renewable energy generation and assists in with renewable portfolio standard compliance and is used to manage and trade RECs.
To meet its renewable requirement, New Ulm Public Utilities acquires RECs through Heartland, whose resource mix includes wind energy from the Wessington Springs Wind Energy Center, a 51-megawatt (MW) wind farm in Jerauld County, South Dakota.
New Ulm currently receives 5.5 MW of wind energy around the clock from Heartland. Of the 167,000 MWh of energy New Ulm purchases from Heartland, about 29 percent, or 48,000 MWh is from wind energy, meaning that New Ulm acquires 48,000 RECs each year. New Ulm’s renewable energy purchases give the public power utility more wind energy than it needs to meet the state’s requirement.
In addition to providing wind energy to New Ulm Public Utilities, Heartland helps administer New Ulm’s RECs through M-RETs by maintaining a separate New Ulm holding account under Heartland’s M-RETS account.
As demand for RECs rose over the past year, pushing prices higher, Heartland approached New Ulm about selling its excess RECs. Heartland marketed New Ulm’s surplus RECs and sold them for a net price of $5.04 each, totaling over $317,000.
“Heartland continuously monitors the REC market,” Nate Jones, Heartland’s chief operations officer, said in a statement. “Like any market, the recent increase in demand for RECs has driven the price up. That proved beneficial as New Ulm had excess certificates to sell. We are happy to provide this service on their behalf.”
Heartland provides wholesale electric energy to 29 cities and municipal electric systems in South Dakota, Minnesota, Iowa and Nebraska. It also provides energy solutions to six public institutions in South Dakota and has a unit contingent contract with North Iowa Municipal Electric Cooperative Association.