By Mark Fritsch, General Manager
Last March I describe some of the damage to the Sherco 3 unit that occurred back on November 19, 2011 and said the root cause would be out soon. The cause of the failure was recently determined to be from the failure of turbine blades. These blades act like propellers to turn the steam produced by the boiler into electricity by rotating a shaft connected to a generator. These blades are connected to the rotor shaft by pins. Metal cracking in the area of the turbine blade pin connections caused these turbine blades to become detached, resulting in massive failure of the turbine and generator equipment.
News of this cause will be shared in the hopes of preventing similar occurrences. The unit is still on schedule to be back in service by the end of September, 2013.
Since eighty-five percent of the electricity we receive from SMMPA is generated by Sherco 3, it could have had a significant impact on us. The badly damaged electric generating turbine in Becker, Minn., is co-owned and operated by Xcel Energy Inc., the Minneapolis-based electric utility.
I’ve been asked many times time how we have been able to avoid a major impact to rates with the Sherco unit unavailable for over 22 months. Since 41%, 360 MW is SMMPA’s share of this unit, and we purchase all of our energy from SMMPA, this event could have had a significant financial impact. We were able to weather this event due to SMMPA having a good purchasing strategy, favorable energy prices and sufficient financial reserves due to solid financial policies. Financial operating reserves act as a shock absorber to manage unforeseen expenses without impacting rates. SMMPA used operating reserves while still maintaining a reserve level within the financial policy.
The other key actions you, as a customer, take to help keep our rates low are to respond to energy alerts. Sometime during the summer on a really hot day many of you have probably read in the newspaper or heard an announcement on the radio that it’s a “Peak Alert” today. What we’re asking our customers to do is to conserve electricity until after 8:00 p.m.
A large portion of the cost we incur from our wholesale provider, SMMPA, is based on what our demand (the total consumption from all of our customers for a particular hour) is during the hour that SMMPA incurs its peak demand (the highest consumption during a one hour period for all 18 SMMPA members). This is called the coincident peak and it affects the price OPU will pay for electricity for the next 12 months. Therefore, we try to lower our demand when we believe SMMPA will incur its peak demand. We do this by curtailing our water pumping, curtailing a number of large commercial and industrial customers, cycling air conditioners, and asking customers to voluntarily reduce electricity use through our Peak Alert messages.
Simply put. It’s an important day for OPU and our electric wholesaler SMMPA because it means they are potentially setting a total annual summer peak for electric usage. A higher peak in the summer means we could have higher costs during the lower electric demand months in the winter. By controlling our electric demand during the coincidental peak in the summer will help to hold down rate increases for everyone in the future.
Turbine blades that failed, connected to turbine rotor
Turbine blade, disconnected from the turbine rotor