evolving energy needs Wyoming Infrastructure Authority / 2018 Fall - - PowerPoint PPT Presentation
Solutions to Wyomings evolving energy needs Wyoming Infrastructure Authority / 2018 Fall Conference Aaron Carr and Chris Kilpatrick Agenda Black Hills Energy overview Wyoming history Changing electricity landscape
Wyoming Infrastructure Authority / 2018 Fall Conference Aaron Carr and Chris Kilpatrick
2
Utilities
Gas
Arkansas Colorado Iowa Kansas Nebraska Wyoming*
Electric
South Dakota Colorado Wyoming*
Non-regulated Energy
Power Generation
Black Hills Electric Generation
Coal Mining
Wyodak Resources
We're based in Rapid City, South Dakota at Horizon Point, our corporate headquarters. We serve more than 1.2 million electric and natural gas utility customers in nearly 800 communities.
3
*Utility supplies electric and gas service to Cheyenne, Wyoming and vicinity and gas service to northeast and northwest Wyoming
4
Wyoming 172,000 customers 57 communities served 429 employees 5,879 miles of gas system infrastructure
Natural Gas Utilities Electric Utilities Power Generation Coal Mine Natural Gas and Electric Utilities
5
in the United States
cooled condensing technology installed at the Neil Simpson I plant
combined cycle power plant in the state at Cheyenne Prairie Generation Station
well in excess of $1 billion
6
7
8
Generation fuel pricing has shifted from coal and hydro to natural gas and wind in the West
9
Fluctuating price per MWh 2007-2016
10
RTO’s and market access to new participants has led to the rise in products accessible to large commercial and industrial customers
Lack of RTO in Rocky Mountain region
to large industrials/hedging
market based products Global competition for technology based companies
cryptocurrency mining can more readily locate anywhere Black Hills Energy has to be creative and agile to serve our existing and potential customers’ changing needs
11
12
Approved by the Wyoming PSC- July 2016
users
Company or customer takes price risk
13
Protect current retail customers
Allow Microsoft to grow their business on their timeline
capacity and energy to supply their data centers and also builds their data centers with backup generation behind the fence (Microsoft owned) to provide 99.999% (5-9’s) reliability Black Hills Energy partnership
through the new tariff
14
Correctly allocating costs
Data Center
Energy Charge - $/kWh based on actual market purchased energy costs Transmission Costs (Load Ratio Share and $/kW-mo) Microgrid Customer Charge $/kW-mo Administrative Costs $/kW-mo
15
Typical business model
40 MW
Data center owns backup generation to maintain reliability
+
40 MW
Black Hills Energy builds generation or contracts with IPP to meet new load
Proposed partnership
40 MW
Data center owns backup generation to maintain reliability
+
40 MW
Black Hills Energy meets need through market purchases to avoid costly generation redundancy.
Partnership benefits
16
2018 Smart Energy Decisions Innovation Award, nominated by Microsoft Quote from the award: “Our judges were particularly impressed with the openness and flexibility Black Hills demonstrated to make this complex undertaking work.”
17
18
New large customer class
high energy density and large energy demands.
<200 MW
appropriate economics
energy
19
New Wyoming laws centered around blockchain and cryptocurrency passed in 2018
Money Transmitter Act exempting virtual currency from licensing requirements.
exemptions from state securities and money transmissions laws for developers, sellers and persons who facilitate the exchange of “open blockchain tokens.” if exchangeable for goods, services or content.
authorize corporations to use a blockchain or other distributed electronic database to create, record and store corporate records.
20
21
22
23
Key drivers:
24
Chelan County PUD, Chelan, County Washington Inundated with requests for several hundred megawatts due to area’s cheap hydroelectric generation. Influx of new load has strained the system and used up the existing and inexpensive baseload resources causing price increases.
is driven by market prices
25
Continued
New York Power Authority
cryptocurrency miners using up all available allocated low cost hydroelectric electricity resulting in price increases to all customers.
customers increased nearly $10 in January because of the two cryptocurrency companies operating there.
a 5 MW increase in electricity delivery. "If Akron were to comply with the request at existing rates, Akron’s annual average bulk power supply costs would have increased 54 percent with a direct impact on retail rates
26
Continued
municipal power companies could charge higher electricity rates.
to negotiate with municipal power authorities in the area. By so doing, utility companies can review the energy demands of miners individually to come up with suitable contracts for each cryptocurrency mining facility.
27
Filed with Wyoming PSC-Sept 28, 2018
Company or blockchain customer takes price risk
their own electrical infrastructure costs
28
Continued
purchased power costs
separated from PCA
and
29
Drafting Legislation
Economic Development Provide support for the Wyoming Public Service Commission
30
Protect current retail customers
investments and all direct or reasonable assigned costs related to the utility’s service to the customer. Allow customers to grow their business on their timeline
ten megawatts Black Hills Energy partnership
from entering into the agreement with the customer.
31
Black Hills Energy
access to low cost energy to match their specific needs.
Wyoming territory
32