The recent widespread outages that took place in Texas because of historic winter storms catches our attention and causes us to wonder, could that happen here? While historic natural events can overtake even the best laid plans and precautions, Jackson Purchase Energy Cooperative (JPEC), along with Big Rivers Electric Corporation (Big Rivers), have taken steps to mitigate the effects of nature when it is within our control. JPEC is a member-owner of Big Rivers, which provides wholesale power needs to our service area. Big Rivers is a participant in a larger organization called the Midcontinent Independent System Operator (MISO). MISO members are required to own enough capacity to cover their own needs at peak times, plus additional reserves. The idea is that if some members have trouble with their generation, other members have reserves that can pick up the slack. Big Rivers owns over 1,000 MW of very reliable coal, hydro, and natural gas generation. At times when Big Rivers generation is offline for maintenance, they purchase energy from the MISO market. They can also purchase energy from the MISO market when it can be purchased at a lower cost than it can be generated.
There are several significant differences between the electricity markets in Texas and Western Kentucky. Not enough of the Texas wind, coal and natural gas generation was designed to operate in extremely cold conditions. When weather stressed the equipment, generation from all sources began to fail just as loads were rising. Big Rivers generation was designed to operate in extreme temperatures. Texas relies more on natural gas than Big Rivers. Transportation issues can make it difficult to get natural gas to power plants when it is needed most. At our coal plants, the fuel inventory sits next to the plant. Finally, electricity sales are deregulated in Texas. Some consumers chose to pay the spot market price for their energy, which can often be cheaper, but the price can be too volatile for individual consumers. We believe that fair, just and reasonable rates provide protection from wild market swings. The rates that JPEC consumer-members pay are set by the Kentucky Public Service Commission.
As a member-owner of Big Rivers, JPEC has a say in how Big Rivers assembles it portfolio of generation resources. We believe that a mix of fuels in well maintained/efficient generation best serves our members. Big Rivers will soon be adding solar generation to its current mix of coal, natural gas, and hydro generation, such as the McCracken County Solar development. This mix further reduces our reliance upon any one fuel source.
JPEC is part of a nationwide network of electric cooperatives. Because the national network of transmission and distribution is and interconnected grid, energy can be acquired that makes up for a lack of generation if that need occurs.