Dive Brief:
- Dairyland Power Cooperative, a generation and transmission cooperative with over 250,000 customers and 6.7 billion KWh in electricity sales last year, appears to be poorly positioned to get in line with the new Environmental Protection Agency CO2 emissions reduction targets for Wisconsin.
- The EPA wants the state to reduce CO2 emissions from utilities in the state by 34% by 2030. The cooperative gets about 88% of its electricity from fossil fuel-fired generation.
- The new regulations come as the cooperative announced increased profits in 2013, with revenue up by more than 5% on the previous year and electricity sales up by 15% over the same period. A combination of extreme weather conditions last year and the growth of the sand mining and biotech industries in the region led to the increase, according to Dairyland.
Dive Insight:
As the cooperative moves forward, meeting the EPA's new regulations will be the group's biggest challenge, according to CEO Bill Berg. The cooperative has already invested $325 million in emissions reduction technologies at its generation facilities but far more stringent measures are needed if the coop wants to successfully meet the state's targets. (All of Dairyland's coal-fired generators reside in Wisconsin.)
But scaling back these plants generating capacity, or even shutting them down, may not solve the problem. Regardless of how much electricity the plants produce, there will still be a cost to customers as the cooperative would either have to invest more in improving operations at existing plants or in developing alternative generation resources, such as wind and solar. “There’s going to be a dramatic impact on cost,” said Berg. “There has to be.”