From Western Farmers Electric Cooperative CEO Gary Roulet
For years, ever since the Hugo Power Plant went commercial in 1982, WFEC has operated from an excess capacity condition. Early on, excess capacity caused wholesale rates to be non-competitive. (Excess capacity raises wholesale rates because it is capacity that is paid for by current load.)
For a period, WFEC fixed the demand charge for each member, and let them pick up as much energy sales as possible without paying for the additional capacity that was used. Also, WFEC picked up quite a few new municipal loads to help reduce the excess capacity from overbuilt generation to used generation.
Back then, everyone complained about the coal plant. However, times did change, and eventually the coal plant excess was used, stabilizing wholesale prices. As excess capacity began to go away, WFEC’s Board of Trustees released the contracts of many municipals. (Vernon and Electra in Texas, Anthony, Kansas, the cities of Laverne, Mooreland, Mangum, and Lindsay in Oklahoma, and Clarksville in Arkansas). Today, only the City of Anadarko and City of Burlington remain.
In 2010, WFEC began service to four distribution cooperatives in New Mexico. Their current wholesale supplier had given them notice that their current full-service contracts would not be renewed. Eventually, they decided to become members of WFEC. Southwestern Public Service (SPS) agreed to phase them out of full service over a period of 16 years, with the amount of power they supplied decreasing every few years.
In the middle of the transition, reserves and loss requirements transferred to WFEC from SPS. The phase out of service would have been completed in 2026, however, all four cooperatives have now fully transitioned to WFEC service. WFEC signed a long-term contract with the Oneta Combined Cycle Natural Gas Plant near Tulsa for 280 MW of generation to help serve New Mexico load. Today, their load, without reserves is about 360 MW. This excess over the 280 MW used up a little more excess capacity.
Then, load growth returned after Covid. This growth included cannabis load, which was significant. Today, we find ourselves with just a little excess capacity – about enough to cover routine load growth.
While it took some time to reach where WFEC is today – from excess to no excess – load growth has played a major role, leading WFEC to build new capacity that is currently underway.
What fuels did WFEC use in 2024?
Unofficial records show that WFEC burned 1,415,000 tons of coal – about 41,850 MMBtu a day of natural gas or 15,276,000 MMBtu of gas for the year – 564,000 MWh of hydro – 2,425,000 MWh of wind, and 186,000 MWh of solar. WFEC also purchased 2,316,000 MWh from the SPP market.
Has WFEC ever used eminent domain for wind or solar projects?
The answer is no, and additionally not aware that anyone has, even though it is a hot topic in the legislature and newspapers recently. I think the business plan for developers generally is to initially lease property for future wind or solar development much like petroleum companies lease property for future oil and gas development. If and when a project develops, the landowner is paid royalty for the wind in a price per kWh, or a price per wind turbine. This is similar to royalty on oil and gas. There is no “taking” of property at all, and the landowner continues to own the property. It has limited use if there is a solar project, however, I have seen cattle grazing around wind turbines, and for land in production, people just farm around them.
How many times does WFEC use eminent domain to route lines?
Over the past 10 years, WFEC has contacted landowners of about 1,466 properties. Of those contacts, only 53 have resulted in the start of eminent domain procedures. Less than 10 of the 53 cases have actually made it through the process, with 43 of them settled during the process.