Solar Power for Rural Electric Cooperatives in Kansas
It was only after World War II that most of rural Kansans organized themselves for centrally generated electricity. The “Area Coverage Principle” was one of the founding conditions for cooperatives to receive low-interest Rural Electrification Administration loans. It specified that as long as the cooperative was paying its bills, anyone who asked would be brought a service feeder regardless of how cost-effective that particular line was.
A typical livestock pumping system in Western Kansas
consumes only 500 to 1,000 kWh per year. It was common to run a 240VAC, single-phase feeder three or four miles to serve a single livestock water pump.
Today Evergy has about 32 meters/mile of line; Kansas Electric Cooperatives average 3.1/mile, so the cost/meter is far higher. And still, distribution lines are designed to carry the largest amount of power any member will need on the hottest day of the year. Critical peak hours demand that our residential distribution circuits be designed to their highest loads, resulting in 50% of capacity being unused 85% of the time.
Yet, 94% of these hours are cloudless in Kansas, and 4% are less than 50% overcast. The same applies to extreme cold. There is potential for huge savings using those clear skies.
For the first time as a distribution-only non-profit, you have the opportunity to sell members or citizens only the energy that keeps you in the black – baseload. Members can now generate a high percentage of their own peak load power, and you can provide inexpensive wind power from your baseload providers. For the same reasons, rural areas were the last to receive centrally generated power; they will be the first to decentralize the most expensive portion. Combining central baseload and distributed peak generation is a big part of our future.
It now makes sense for you to encourage members to install solar arrays because:
- You gain peak capacity with no out-of-pocket costs to your coop
- Generating peak power where it is used relieves the heat stress on all hardware and eases the pressure for line and substation expansions. When needed, they can be sized closer to baseload capacity
- Because the “facility” is owned by the member, as in upgrading to a heat pump… it avoids conflicts with your coop’s exclusive power provider contracts
- Since the coop doesn’t own the hardware, you aren’t liable for the additional property tax, and by Kansas law, neither are your member/generators
- It helps to avoid transmission congestion common to centralized generation
- As members generate more and more of their own peaks, you gain more leverage in negotiating peak power contracts
- It keeps your members’ money local, increasing employment and reducing the cost of living in the country, and by this, allowing you to retain community members
FHREEC helps present demonstration installations called SunRaisers for families to teach neighbors and local contractors that installing an array is not beyond the abilities of most people. The array portion of the hardware is plug-n-play, with no high-voltage DC and no live electrical work until their electrician completes wiring back to the breaker box
Saving through Buying Together
If we can network with five or six rural electric cooperatives and municipal utilities, we can order together in shipping containers instead of pallets. We can already offer prices close to matching prices of utility-scale projects – but with the advantages of peak generation at the point of use. The price advantages we can gain by buying full containers directly from the factory will be 20-30% lower than those on our most recent price sheet.
Why Is Evergy So Opposed to Rooftop Solar?
During its merger hearings, Westar estimated that only 7% of its investors reside in Kansas and is now proposing a $5.9 billion rebuild of its transmission and distribution system. Corporate investors can’t afford distribution efficiency. Savings to the distribution system through rooftop solar undercuts their argument before the Corporation Commission. For us, there is no reason to gold-plate the distribution system. It won’t add to the rate base for our “investors” but will only make our electricity more expensive. Unlike investor-owned utilities, there is no inherent conflict between ratepayers and stockholders for a non-profit municipal or cooperative utility. They are the same people – owners/citizens /members.
- USDA Renewable Energy in Agriculture Program (REAP Program)
Rural businesses and farms where more than 50% of a meter’s use is devoted to agricultural business can apply for a 25% grant toward the cost of a system.
- Federal Renewable Energy Income Tax Credit
Businesses also qualify for the 26%
- MACRS accelerated depreciation
- CoBank has been known to give negative interest loans to finance large arrays
- Rural Utilities Service
- National Rural Utilities Cooperative Finance Corporation
Financial Opportunities for Rural Electric Cooperatives & Other Rural Businesses
There is great potential for rural electric and municipal utilities to offer community aggregation. This network would be very analogous to the natural gas collection system, something rural Kansans understand:
- Rural Kansans have a culture of cooperation;
- Cooperatives have an office of KEPCo and KEC negotiators to contract power purchases – why not power sales?
- Have little peak generation of their own and buy nearly all their peak load on long-term contracts largely from Evergy;
- The infrastructure already exists with any DG member already having AMI or buy-back meters. The coop typically connects through a couple of transmission nodes, which could easily be switched to industrial buy-back meters.
- And they are out of the oversight of the KCC
It is perhaps the most ready-made aggregation in Kansas.