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Lake Region Electric Coop to expand with natural gas

Tim Thompson, CEO for Lake Region Electric Cooperative, addressed members during the annual meeting June 1 in Fergus Falls. Tom Hintgen/Otter Tail County Correspondent.

Lake Region Electric Cooperative CEO Tim Thompson announced during the Thursday evening, June 1, annual meeting that LREC is expanding into the natural gas business as Lake Region Energy Service (LRES).

The partnership is with Greater Minnesota Gas, Inc., based in Le Sueur, Minnesota. Franchise agreements with the cities of Deer Creek and Parkers Prairie are in place.

"We have a $1.6 million investment in the Deer Creek and Parkers Prairie areas of eastern Otter Tail County," said Thompson.

LRES has filed with the Minnesota Public Utilities Commission (PUC) for exemption from rate regulation as a small gas utility franchise. Gas distribution facilities will be in place by late summer 2017.

Natural gas service installations to individual homes and businesses along the route will begin in late July.

Thompson told LREC members during the annual meeting, at Life Church, Fergus Falls, that Greater Minnesota Gas will provide the transmission pipeline to the Deer Creek and Parkers Prairie areas. From there, Pelican Rapids-based LREC will own and maintain the natural gas distribution system for natural gas customers.

A change with the energy mix

Lake Region Electric's wholesale provider, Great River Energy of Maple Grove, Minnesota, is changing its energy mix, said Thompson. Closed is the Stanton power plant in North Dakota which was a coal-based station.

"Great River Energy, like other electricity suppliers, is moving more and more toward wind and solar energy," said Thompson.

LREC of Pelican Rapids is in the start-up phase of GoWest Solar, with an exclusive rate offered as an alternative to net metered solar.

Dan Husted, LREC's vice president of energy services, says that LREC will sell and install small ground-mount solar installations for LREC members.

"In addition to providing renewable energy for rural homes, the GoWest program provides additional value through a bill credit offered during June, July and August by producing power during the peak demand hours of summer," said Husted.

He said that reducing peak summer demand lowers wholesale power costs and provides savings for LREC members and the cooperative as a whole. This creates an additional benefit for LREC members through cost savings.

Energy management specialists at LREC crafted a special rate of only 4.8 cents per kilowatt-hour for use of electric thermal storage water heaters.

LREC dates back 80 years

Lake Regional Electric Cooperative Board Chairman Charles Kvare of District 2, Pelican Rapids, reelected to another term on June 1, noted that LREC dates back 80 years, to 1937. The cooperative serves more than 26,000 members in Otter Tail and Wilkin counties and portions of surrounding counties.

Other board members reelected during this year's annual meeting were Dennis Mathiason of District 5, Frazee, and Sid Wisness of District 8, Battle Lake.

There had been no rate increases for four years but this year, on Jan. 1, the LREC board found it necessary to put in a rate increase of 4.3 percent. However, there will be no rate increases for dual fuel customers.

Total operating revenues for 2016 were $47.4 million with total operating expenses of $46.8 million. The net margin for 2016 was $3.5 million, up from $3.1 million in 2015.

LREC, responding to requests from members, is offering a new program for the sale of Briggs and Stratton standby generators with automatic transfer in the event of an outage. Units are sold, installed and financed by LREC.

CEO Thompson highlighted the success of Lake Region Electric's vegetation management program. LREC works in consultation with ACRT, a leading utility vegetation management consulting company.

"We have cleared our right of way and are now able to maintain a four-year management cycle," said Thompson.

LREC is also a part owner of Carr's Tree Service based in Ottertail.

"Our cooperative will benefit from this revenue stream," he said. "For many years we hired Carr Tree Service to perform our right of way clearing. Now, LREC and seven other cooperatives benefit from being owners."

The proposed casino on the southwest side of Star Lake, if constructed by the White Earth Nation and Shooting Star Casino, would become LREC's second largest customer. A new substation would serve not only the casino but also provide enhanced electric service for LREC customers in the Star Lake area.

The ethanol plant north of Fergus Falls is LREC's largest customer.

Three LREC linemen (Lucas Bakken, Anthony Spaeth and Troy Seter) spoke to LREC members about their three-week stay in Haiti as part of the National Rural Electric Cooperative Association (NRECA) international program.

The program provides hands-on assistance to help developing countries build electric distribution infrastructure with other linemen from throughout the United States. The linemen joined forces with local Haitian line workers.

"We had a lot of satisfaction in providing enhanced electric service to needy communities in Haiti," said Bakken.

In turn, their LREC co-workers donated vacation time for the three LREC linemen.