There's no electricity tooth fairy by Ron Williamson The electrical power woes in California have basically stopped all discussion of electric power deregulation in South Dakota.
Statements have even been made that we have plenty of power in South Dakota for present and future needs. Such complacency today can lead to major problems in the future and even more importantly negates the study and understanding of South Dakota's position relative to future state energy needs, the transmission of power from and through our state, the generation of electrical power in South Dakota, the utilization of the state's water and energy resources, an understanding of the Midwest power grid, and the list goes on.
Without an ongoing study of deregulation and the "electricity business" in South Dakota, we could find ourselves literally left out in the cold. South Dakota needs a long term strategic plan regarding electricity and a state energy policy.
South Dakota is a part of the Midwest Power Grid, which is made up of about 18 million people in the United States and Canada who receive their power from utilities, co-ops and cities that belong to the Mid-Continent Area Power Pool. This pool oversees the buying and transmission of electricity throughout the upper Midwest to include South Dakota, which represents only about 4 percent of the total power grid population. Analysts project that the pool may not have enough power generation capacity within the next few years.
Where does that leave South Dakota? Perhaps South Dakota should encourage power plants in South Dakota, which are environmentally sound and would provide jobs and revenue in our state. Presently the Black Hills Corp is building a $100 million power plant in Wyoming, which will be a model for future coal-fired power plants.
Granted this plant is being built in Wyoming because that is where the coal is. Perhaps with the proper incentives and encouragement these power plants could be built in South Dakota.
With an understanding of future power needs, cost/benefit studies, public policy direction and support, South Dakota could perhaps be a major source of generation.
The North American Electric Reliability Council projects that the nation needs about 10,000 megawatts of new generating capacity each year through 2008 to keep up with an annual rise in demand of 1.8 percent. The Mid-Continent Area Power Pool projects that South Dakota, six other states and two Canadian provinces will need a total of 5,300 megawatts of capacity to avoid shortage by 2009 but utilities only plan to build 1,183 megawatts of capacity.
Where does that leave South Dakota with only 4 percent of the pool population? Since the country and the Midwest Pool need generation, is it "time to build" in South Dakota?
Another area of generation is that of wind energy. Experts say that South Dakota, along with North Dakota, have the most favorable conditions in the U.S. It is estimated that we are capable of generating enough power to supply the needs of more than 110 million homes, but wind energy has barely gotten off the ground.
The major problem is that of transmission lines. South Dakota already has several of these lines across our state which would perhaps be enhanced or replicated to encourage the development of wind power. If the opportunity is there we need a plan to develop and transmit the wind generated electrical power.
The Missouri River with its large hydropower dams also provides possible additional power generation resources. In addition to the dams there is "pump, storage" generation where water is pumped to a higher level at non peak, low cost times and released for generation at high peak, high cost times. These approaches on the river along with the available transmission could also position South Dakota as a "player" in power generation.
Whether or not South Dakota deregulates is probably not a priority issue today, but the future of electric power generation and transmission in the Midwest and the country is a major issue for us. We have the resources, we have the space, and we have a business climate that understands the environmental issues.
With only 4 percent of the people served by the Midwest power grid, South Dakota could be a major factor in the future of power generation. With the proper perspective and an energy policy, we could have a bright future.
To be generation rich in today's energy market is a good thing. Because of South Dakota's location there is power loss through transmission lines, however we can sell excess power to neighboring states allowing other plants to sell power to the west and east.
Our task is to encourage willing investors to accept extraordinary risk with the opportunity for a return on their investment that benefits all of South Dakota.
Ron Williamson is president of Great Plains Public Policy Institute, a research and educational institute. More information is available at www.greatplainsppi.org.