Market Pricing, Possible Blackouts & EECA
We are fielding many questions from our consumer-members from price increases to possible blackouts this summer. Please read the information below for more detailed data, explanations, and site references to learn more about EECA and our affiliates.
Press Release from 6/14/2022: EECA Press Release 06-14-2022
How is EECA connected to the ‘grid’?
Every consumer-member of Egyptian Electric Cooperative (EECA) is connected to the electric grid via the same wires that provide your electric service. These local, or distribution, wires are owned and maintained by EECA. The EECA electric system is interconnected to our high voltage transmission provider, Southern Illinois Power Cooperative (SIPC), who is located south of Marion, Illinois.
SIPC also owns and operates electric generation (power plants) that produce much of the electricity used in your home. The electric grid owned and maintained by SIPC is a part of the complex network of interconnecting power plants and high voltage power lines that connects regional areas and multiple states. This makes SIPC our generation & transmission provider when you hear the term – G&T. To learn more about SIPC, visit sipower.org.
Who controls the electric grid?
The federal government has tasked the Department of Energy (DOE) with the oversight to ensure that we have safe and reliable electric supply at all times. Within the realm of the DOE is the Federal Energy Regulatory Commission (FERC). FERC has the task to regulate the interstate transmission of electricity and natural gas. FERC also regulates the wholesale sale of electricity across state lines. To accomplish these tasks, FERC divided the country into regional areas and created Independent System Operators (ISOs) that have the ultimate task of regional coordination of the electric grid. Here locally, we are a part of the Midcontinent Independent System Operator, also known as MISO.
MISO is the regional transmission operator and dispatcher of generation resources for parts of 15 states in the Midwest region – from (and including) Canada to the Gulf of Mexico. MISO is divided into 10 zones in the Midwest with most of Illinois being in zone 4. To learn more about MISO, visit: misoenergy.org.
What affects market power pricing?
Each year, MISO requires each utility provider to secure enough electricity to meet the peak needs of its customers and consumer-members. This annual process is known as the MISO Planning Resource Auction (PRA). For the 2022-2023 planning year, the auction price for zone 4 increased from $5 per Megawatt-Day to $236.66 per Megawatt-Day. Results for MISO’s PRA can be found at 2022_PRA_Results (misoenergy.org).
Although the PRA auction is not the only factor leading to increased electricity costs, factors such as rising fuel costs, inflation, and supply chain concerns also add to the market issue. Other factors include an anticipated increase in electricity consumption in a year with a projected decrease in electric supply. This pricing signal was an outcome of perceived supply and demand.
You may have seen or heard in the news that consumers purchasing electricity from an investor-owned utility (IOU) and/or through municipal aggregation programs, are being warned of significant upcoming rate increases. Recent media reports are stating that these increases could be as high as double-digit percentages. The rate increases for investor-owned utilities and municipal aggregation participants are largely due to the prices being paid for electric capacity, often billed as part of the “electric supply” line of the bill, as set at the recent capacity resource auction.
To learn more about these potential rate increases, we suggest you start with the Citizens Utility Board (CUB) at Citizens Utility Board.
As a consumer-member of EECA you, like other inquires we have been getting, may have questions about how these recent price market changes will impact you. While inflationary and supply pressures are a concern looking into the future, we want you to know that rates at your electric cooperative are stable and that we are not projecting any rate increase in the near future. In fact, our residential rates have declined 3.4% since January 2020. In January of 2021, we revised our billing format so you can easily see what you pay for, with consistent terms and added details. For example, our standard residential electric rate (Rate Schedule A) lists our residential electric supply “kWH Charge” as $0.0363/kWh, and our residential distribution “delivery charge” as $0.0692/kWh, that is reflected in your monthly bill.
Why are we hearing of potential blackouts and brownouts this summer?
Because of the perception of power scarcity that affected market pricing, MISO also warns of the potential for rolling blackouts due to fewer dispatchable generation resources available this planning year. “The reality for the zones that do not have sufficient generation to cover their load plus their required reserves is that they will have increased risk of temporary, controlled outages to maintain system reliability,” said Clair Moeller, MISO’s president and chief operating officer, “from a consumer perspective, those zones may also face higher costs to procure power when it is scarce.”
The physics of the electrical grid require enough generation of power to match the load at any given second in time, meaning the supply must be greater than or equal to the demand. Electricity is not like other commodities and cannot be economically stored and used when needed.
If the electricity demand is greater than the available generation, the last resort is that consumer-members would be taken off the grid to keep the electrical system from collapsing, causing a major blackout. Based on the results of the auction, 7 of the 10 zones (MISO zones 1-7) in the north were short generation. This is not to say we will have rolling blackouts, but the potential is greater than ever. These blackouts could happen to any electric consumer, regardless of if you are a consumer-member of Egyptian Electric or a customer of another power provider in the MISO region.
The problem is generation can’t be built overnight. Building generators typically requires a 4-to-7-year timeframe depending on the type of generation. With today’s available technology, dispatchable generators that can be reasonably built are mostly powered by carbon-emitting fuels, such as coal, diesel, or natural gas, which are challenging to build for environmental reasons.
How are EECA & SIPC positioned to these blackout warnings?
EECA has an all-power purchasing agreement with our generation & transmission (G&T) provider SIPC. Each year, SIPC must own or purchase enough electricity to meet the MISO Planning Reserve requirement. SIPC does this annual planning to ensure we have enough electricity, not only for the current year, but for many years to come.
For this planning year, SIPC was not exposed to the high auction prices. Instead of paying for electricity in the MISO planning auction, SIPC generates much of its own power needs. The SIPC generation portfolio includes the Marion Generating Station, which includes 110MW of coal generation and 140 MW of Natural Gas generation. SIPC is owned by seven electric cooperatives in southern Illinois. SIPC is a 7.9% owner of the Prairie State Energy Campus – giving us access to 125MW of electric generation from coal. The SIPC portfolio includes much more than thermal-fossil based resources. SIPC receives 28 MW of electricity from the Southeastern Power Administration, part of the Tennessee Valley Authority (TVA), 10MW of wind generated electricity from the Pioneer Trail Farm located in Paxton, IL, and 100 MW of solar generated electricity from the Big River Solar Farm located in rural White County, IL.
Owning generation assets helps protect our consumer-members financially from the high auction prices but cannot protect our consumer-members from rolling blackouts because we are part of the larger interconnected electric transmission grid, MISO. If the grid fails, or there is not adequate generation available to meet electricity demand, rolling blackouts would be implemented, likely to cause some, or all, of our members to be without electricity for a period of time(s).
While we hope this never happens, we assure you that we have been planning for this scenario for some time to minimize any impacts to our membership. Please know that we are working daily to provide a safe, reliable, and affordable electric supply to your today, and into the future. Below is additional FAQs for rolling blackouts, but should you have any questions, please contact us at (800) 606-1505 to speak with our live and local member services team.
What are rolling blackouts?
Rolling blackouts (that can also be called rotating outages) are intentional systematic temporary power outages that are implemented with the intent to bring balance to electrical grid in a region. Rolling blackouts are a last-resort method of “load-shedding,” when the demand of electricity is greater than the supply, at a given time.
Energy conservation is a method all of us can implement every day to reduce stress on the electric grid, especially during extreme weather conditions. Here are a few everyday tips to help us, help you.
How do rolling blackouts occur?
Our governing agency overseeing the power grid in our region, MISO (Midcontinent Independent System Operator), would call the order to the need for rolling blackouts. The electric utility will administer temporary, rolling outages to one area at a time to limit the duration of the outages for each area. Rolling blackouts are the last step in a series of emergency procedures after a power supply shortage is detected and flagged in the market. Before MISO would call for a blackout, there is a series of steps to help lessen the demand on the system. First steps would include:
- MISO would instruct all load serving entities to bring all available generation online.
- If the call for all generation is not successful, EECA would ask all consumer-members to voluntarily reduce electric consumption to reduce the system demand.
- If the call for voluntary demand reduction is not successful, it will become necessary to shed load to reduce the overall system demand. Each MISO event may require different load amounts be shed. The utilities, like us, normally get little to no notice about the need for these outages.
Why do we have rolling blackouts?
If the electricity supply is less than the demand, the demand must be curbed by intentional orderly and shorter outages. Temporary outages can help prevent everyone in the area from experiencing an even longer blackout.
How long do rolling blackouts last?
The duration of a rolling blackout will depend on the severity of the event – many instances driven by weather conditions. The electric distribution providers, such as ourselves, will usually attempt to limit the duration of outages in each area. The rolling blackout will conclude when the emergency is ended.
Where will rolling blackouts occur?
When rolling blackouts in an affected area are called for – you should expect most, if not all, homes will experience a rolling blackout. Some consumer-members could experience multiple blackouts while others could experience no blackouts at all, depending on where they are located, and which substation and feeder.
Who decides what areas will receive blackouts?
Your electric utility will determine which circuits, and in which order, in their service areas will receive blackouts. Some areas, such as those with medical centers, hospitals or downtown areas may or may not be affected by rolling blackouts.
Will critical care consumer-members be affected by rolling blackouts?
Critical care consumer-members may also be subjected to rolling blackouts, so consumer-members who rely on electricity for life-sustaining equipment should always have a backup plan in place in case of rolling blackouts or other weather events that could cause outages outside of the utility’s control.
How do I prepare for a rolling blackout?
As with any power outage, it helps to be prepared with the right supplies and know what to do to keep yourself and your family safe and comfortable. Read below for tips for what to do before and during an outage.
What can I do to help prevent rolling blackouts?
When extreme weather leads to an increase in electricity demand, the best thing you can do to help is to lower your own electricity demand by lowering your usage. Use these tips to reduce your energy usage in extreme weather:
Raise the temperature on your thermostat two to three degrees, especially at peak hours of the day, which can likely be 2pm-8pm. Set it at a higher temperature when nobody is home. Lower hot water heating setting to around 115-degrees. Use ceiling fans to circulate cool air. Set them to turn counterclockwise to produce a downdraft that creates a cooling sensation in the room. Turn off and unplug lights and electronics when not in use. Avoid using large appliances from 2pm-8pm such as a washer, dryer, dishwasher, pool/spa pumps, etc.
EECA has also been a part of two interviews: WSILTV (Missouri and Illinois at risk for rolling blackouts during energy shortage | News | wsiltv.com) and WJPF (Newsradio WJPF interview with Shane Hermetz, Brad Austin, and Brooke Guthman | Newsradio WJPF)
To view other energy efficiency ideas, visit here: 101 Ways to Conserve Energy
Before a Blackout:
- Build or buy an emergency preparedness kit, including a flashlight, batteries, cash, and first aid supplies.
- Make sure you have alternative charging methods for your phone or any device that requires power. A crank or solar powered radio/flashlight/cell phone charger is a good alternative to battery powered ones.
- Always keep your cell charged and have a supply of batteries on hand.
- Know where the manual release lever of your electric garage door opener is located and how to operate it.
- Purchase ice or freeze water-filled plastic containers to help keep food cold during a temporary power outage.
- Keep your car’s gas tank full. Gas stations rely on electricity to power their pumps. If you use your car during a blackout to re-charge devices, do NOT keep the car running in a garage, partially enclosed space, or close to a home, this can lead to carbon monoxide poisoning.
- Learn about the emergency plans that have been established in your area by visiting your state’s or local website so you can locate the closest cooling and warming shelters.
- If you rely on anything that is battery-operated or power dependent like a medical device, determine a back-up plan.
During a Blackout:
- Only use flashlights or battery-operated lanterns for emergency lighting. Candles and kerosene lanterns can cause fires.
- Leave one light turned on so you’ll know when the power comes back on.
- Keep refrigerator and freezer doors closed. Most food requiring refrigeration can be kept safely in a closed refrigerator for several hours. An unopened refrigerator will keep food cold for about 4 hours. A full freezer will keep the temperature for about 48 hours.
- Remain cool if it is hot outside. In intense heat when the power may be off for a long time, consider going to a movie theater, shopping mall or “cooling shelter” that may be open in your community. If you remain at home, move to the lowest level of your home, since cool air falls. Wear lightweight, light-colored clothing. Drink plenty of water, even if you do not feel thirsty.
- Put on layers of warm clothing if it is cold outside. Never burn charcoal for heating or cooking indoors. Never use your oven as a source of heat. If the power will be out for a prolonged period, plan to go to another location (the home of a relative or friend, or a public facility) that has heat to keep warm.
- Turn off or disconnect appliances and other equipment in case of a momentary power “surge” that can damage computers and other devices. Consider adding surge protectors.
- Only use generators away from your home and NEVER run a generator inside a home or garage, or connect it to your home’s electrical system.
- Avoid unnecessary travel, especially by car. Traffic lights will be out and roads will be congested.
- If electrical power lines are down, don’t touch them, Keep your family and pets away. Report downed lines to your utility company.
During a Blackout:
- Throw away any food that has been exposed to temperatures above 40° F (4° C) for more than 2 hours or if it has an unusual odor, color, or texture. When in doubt, throw it out!
- If food in the freezer is colder than 40° F and has ice crystals on it, you can refreeze it.
- Contact your doctor if you’re concerned about medications having spoiled.
- Restock your emergency kit with fresh batteries, canned foods, and other supplies you used.
How to Be More Prepared:
Keep well stocked emergency survival kits in the home, at work and in your cars. Here are products that can help your family and you prepare for a blackout or other emergency.