Manager’s Column
Damaging Surges Are Everywhere
Are your electronics protected?
Common sense and historical records confirm
It was a warm July
the foolhardiness of swinging a golf club, flingafternoon. Cumuloniming a graphite fishing rod, or standing on Devil’s
bus clouds were building
Tower during a thunderstorm, and yet, on average,
in the west, and prairie
73 Americans die each year from lightning. Just
falcons rode the updrafts
as we looked over the Belle as there are common sense precautions to protect
ourselves, there are reasonable ways to protect our
Fourche River valley. I
electrical equipment.
sat on the rolling prairie
landscape next to an ofJust as there are common sense preficial looking sign that read,
Dan Hutt
cautions to protect ourselves, there
“No Climbing Beyond
dhutt@bhec.coop
this Point.” A thunderclap
are reasonable ways to protect our
sounded two miles away,
electrical equipment.
and I felt a tingle while I watched in awe as the hair
We often receive calls this time of year that go
on the guy next to the sign stood straight up. Even
something like this: “Lightning came in on your
as a 22-year old, I had sense enough to know that
power line and took out my TV (or phone, or
being on top of Devil’s Tower during a thundercomputer),” or they report, “When the power came
storm wasn’t good planning. We just managed to
back on after the outage, the TV didn’t work,” or,
scamper over the edge and set the ropes for the first
“There were power surges that everyone saw and
rappel when lightning jolted the stuffy silence. We
reached the boulder field at the bottom only slightly you’re going to buy us a new TV.” Most are surprised when we readily admit that damaging surges
battered by hail and rain and thus avoided (by 15
occur frequently on our power lines (and on every
years) becoming the first climbing fatalities at the
other communications and power company line in
national monument. We were lucky.
the world). They are not at all happy that we won’t
Roy Cleveland Sullivan was lucky, too…if you
pay for their TVs. We’re fair and reasonable. Why
consider surviving seven lightning strikes lucky. Afwouldn’t we pay?
ter the fourth when he reportedly extinguished his
There are two reasons: utilities can’t prevent
burning hair in a toilet, he began carrying a bucket
surges, and utilities can’t protect your equipment.
of water with him. The last time in 1977 he was
The laws of physics make it impossible to provide
fishing when he suffered burns
adequate power at the
to his head, chest, and abdomen.
meter and still protect
As he stumbled to his car, he was
sensitive electronic
confronted by a black bear intent
equipment throughout
on enjoying a trout supper. Roy
your home. You can’t
fought it off with a stick and
do it at your entrance
managed to drive himself to the
panel either. You must
hospital. He became known as the
have high-quality surge
“Human Lightning Rod”, and it
suppressors at every
always bothered Roy that people
piece of electronic
ran away from him when a cloud
equipment. If you
appeared. There is no evidence
don’t, you’ll be like Roy
that Mr. Sullivan actually attractSullivan. The number
ed lightning. He was just in the
of TVs and computers
wrong places at the wrong times.
you lose could set a
We should all take reasonable
Lightning can induce surges on phone lines,
Guinness world record.
steps to protect ourselves and our power lines or any cable entering your home.
property from lightning damage.
High-quality surge suppressors can help.
2 July 2012 • COOPERATIVE CONNECTIONS
News
Briefs
Limited Number of Seats Remain
(ISSN No. 1531-104X)
Board President – Al Perry
Board of Directors
Dwayne Breyer – Vice President
Glen Reaser – Secretary
Jim Preston – Assistant Secretary
Gary Kluthe – Treasurer
Dave Lindblom
Alan Bishop
General Manager
Dan Hutt – dhutt@bhec.coop
General Counsel and
V. P. of Administration
Walker Witt – wwitt@bhec.coop
V. P. of Operations and
Engineering
Alan Michalewicz – amich@bhec.coop
Manager of Marketing and
Member Services and Cooperative
Connections Editor
Mike Chase – mchase@bhec.coop
Several seats still remain for BHEC’s annual tour of cooperative facilities in North
Dakota. Above: Steam rises from Antelope Valley Power Station’s cooling towers as
seen from the Coteau Mine. The picture below is of one of three large drag lines used
at the coal mine to remove overburden to expose the coal seam. The top of the seam
is about 90 feet below the surface. Cost is $25 per person for the two-day tour which
includes all tours, meals, room and air-conditioned coach. Participants will tour the
Antelope Valley Power Station, the Great Plains Synthetic Gas Plant, Coteau mine
and Garrison Dam. The tour will be September 5 and 6 and is open to any BHEC
member who has not already taken the trip. The remaining seats will be filled on a
first-come, first-served basis. To register, send payment with the form below.
BLACK HILLS ELECTRIC COOPERATIVE CONNECTIONS
is the monthly publication for the members of Black Hills
Electric Cooperative, 25191 Cooperative Way, Box 792,
Custer, S.D. 57730-0792. Families subscribe to Cooperative Connections as part of their electric cooperative
membership. Black Hills Electric Cooperative Connections’ purpose is to provide reliable, helpful information
to electric cooperative members on matters pertaining to
their company and living better with electricity.
In accordance with federal law and U.S. Department of
Agriculture policy, Black Hills Electric Cooperative, Inc. is
prohibited from discriminating on the basis of race, color,
national origin, age, disability, religion, sex, and familial
status. (Not all prohibited bases apply to all programs.)
To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, 1400 Independence Avenue,
S.W., Washington, D.C. 20250-9410 or call (800) 7953272 (voice) or (202) 720-6382 (TDD).
Subscription information: Electric cooperative members
devote 50 cents from their monthly electric payments for
a subscription. Non-member subscriptions are available
for $12 annually. Periodicals Postage Paid at Black Hills
Electric Cooperative, 25191 Cooperative Way, Custer,
S.D. 57730-0792, and at additional mailing offices.
POSTMASTER: Please send address changes to Cooperative Connections, P.O. Box 792, Custer, S.D. 577300792. Address all other correspondence to: Cooperative
Connections, P.O. Box 792, Custer, S.D. 57730-0792
Telephone: (605)673-4461 Fax: (605) 673-3147
e-mail: bhec@bhec.coop
2012 Bus Tour Registration Form
NAME(s): ___________________________________________________
__
ADDRESS: ________________________________
CITY: ________________________
STATE: _____
PHONE: ________
ZIP: _______
Complete form and mail to: Black Hills Electric, Box 792, Custer, SD 57730.
Attach $25 per person non-refundable registration fee. Deadline is July 20.
COOPERATIVE CONNECTIONS • July 2012 3
Co-op
News
Peak Demand Rate Discussed at Annual Meeting
More than 300 people were in attendance for Black Hills Electric Cooperative’s 67th annual meeting Friday, June
1, at Hot Springs.
Leroy Schecher, a BHEC member
from the Rapid City area and former
manager of Grand Electric Cooperative
in Bison, S.D., was the recipient of the
Black Hills Electric Cooperative Good
Neighbor Award. The award is given to
a BHEC member who has served his or
her community through being a good
neighbor.
Jori Broberg, winner of this year’s
Washington, D.C. Youth Tour trip, was
recognized as were BHEC’s two scholarship winners, Bill Hendricks and Melissa
Bucknall.
In their combined state of the
cooperative address, Board President Al
Perry and General Manager Dan Hutt
told members what to expect from the
electric industry in the next few years.
“I don’t know whether you noticed or
not, but over the last couple years, your
electric bill has gone up,” said Hutt. “I
thought at one time I might be able to
retire without ever implementing a rate
increase. If the federal government hadn’t
got in the way, I think we could have
done it.”
BHEC went 20 years without a rate
increase, lowering rates nine of those
years. Recently, federal energy and environmental policy has lead to increases
beyond the cooperative’s control.
In 2007, the co-op began putting a
Barb Lampert waits to see what her prize
will be after spinning the big wheel. Her
husband, Art, looks on. Bill Brisk, left and
Alan Michalewicz, background, handled the
prize wheel during registration.
10 July 2012 • COOPERATIVE CONNECTIONS
BHEC employees register members prior to the start of the co-op’s 67th annual meeting.
power cost adjustment line on members’
bills. “We expected federal regulations
would cause large increases in wholesale
power costs and we wanted you to know
just how much,” said Hutt. “That line is
now over 25 percent of your bill.”
Despite the co-op’s efforts to keep
rates low, wholesale power costs make up
more than half of each member’s bill and
have increased by 60 percent in the past
four years. “That’s the cost of trying to
comply with an Environmental Protection Agency that is determined to make
conventional generation so expensive
that plants will be shut down,” said
Hutt.
Three-fourths of the electricity in
this region is produced from coal. Coal
produces the lowest cost electricity and
the U.S. has more coal reserves than any
other country.
“Since 1970, coal-fired power generation has tripled while total air pollution has gone down 32 percent,” said
Perry. “The EPA issued new regulations
in March which essentially prohibit
any new coal-fired power plants. EPA
Administrator Lisa Jackson warned that
next year, they will target existing power
plants.”
What is going to happen when
utilities can’t build any more affordable
generation? “They simply try to squeeze
every drop of capacity out of the existing
system,” said Hutt. “On cold winter
mornings and hot summer afternoons,
this country is dangerously short of electric power. It is what is known as a peak
situation.”
BHEC’s power bill in January was
more than $895,000. Of that bill,
$576,000 was the cost of peak demand.
Historically, demand costs were low and
all utilities had rates that averaged peak
demand costs in with the kilowatt-hour
costs. But with demand costs that have
tripled in the past few years, more utilities are looking at demand rates.
Comparing two typical co-op members, Hutt explained that two members
may use the same amount of energy each
month but when they use it can make a
huge difference to the cost to the co-op.
“Average Joe gets up at 6:30 a.m.,
turns up the heat, switches the lights
on, throws a load of clothes in the dryer,
turns on the coffee maker and takes a
shower,” said Hutt. “Joe’s peak usage is
20 kilowatts and his total monthly usage
is 2,000 kilowatt-hours.”
Joe pays $182 for that month’s bill
but since his demand was on the co-op’s
peak, he cost the co-op $359 in demand
charges for the month.
“Thrifty Tom cycles his electric heat
so that only one room comes on at a
(Continued on next page.)
Co-op
News
Members were given the first opportunity to sign up for the co-op’s annual bus trip to North
Dakota. There are still seats available, see the coupon on page three to register.
time. He puts a timer on his water heater
so it only comes on during off peak
times and only turns on the light in the
room he is in,” said Hutt. “His monthly
usage is 2,000 kilowatt-hours for the
month but his peak demand is only five
kilowatts.”
Tom pays $182 for the month but
he only costs the co-op $102 in demand
charges.
“Without an individual price signal
there is no incentive for one member to
try to reduce peak demand,” said Hutt.
“Do you see why people who try to
lower peak demand costs for the co-op
might think current rates are unfair? It’s
because they are.”
In the above example, Thrifty Tom
is paying a huge part of his neighbor’s
electric bill. “And so are many of you,”
he said.
In 2011, for the first time in 24 years,
the average rate BHEC members paid
was just above what they paid in 1987.
“Seventy-five percent of your electric
bill is virtually beyond our control,” said
Perry. “Just three things make up that 75
percent: taxes, debt service and the cost
of the electricity we purchase to deliver
to you.”
Black Hills Electric has consistently
had the lowest controllable costs and
the lowest administrative costs per
consumer in the state of South Dakota
and beyond. “Unfortunately, the cost
increases you are seeing on your electric
bill are not local,” said Perry. “For several
years, we’ve asked our members to write
to elected officials and ask them to take
steps to keep electricity affordable. We
even provided an electronic link at our
website (www.bhec.coop) to make it
easier. Unfortunately, less than one percent of our membership responded.”
Perry said that unless there are major
changes in the direction of American
energy and environmental policy, the recent cost increases are just the beginning.
“We are looking for every tool we
can find to lower your costs,” Perry
said. “As our wholesale power costs
have increased, the amount our co-op
pays in monthly peak demand costs has
skyrocketed to almost two-thirds of the
total costs. That is something we can’t
control...but you can.”
The co-op is currently working on
establishing a rate that will bill everyone individually for their actual peak
demand costs instead of averaging those
costs among all members. “By billing for
peak demand costs, we will send a price
signal that will make it possible for most
of you to save a lot of money if you are
willing to change your usage pattern,”
Hutt said. “How much money? We believe we will be able to save our members
at least a million dollars a year.”
The co-op will offer tools to make
it easier for members to control peak
demand. “You will have choices,” Hutt
said. “Do nothing and pay for the convenience of using as much
electricity as you want
when you want; automate
with a demand control
system financed at cost
through your cooperative;
or manually control peak
demand yourself with tim- Gary Kluthe
ers and switches.”
Hutt said BHEC hopes
to implement the demand
rate sometime next year.
“A large part of the 75 percent of your bill that was
beyond our control will be
in your control,” he said. Al Perry
“You will be able to decide
if you want to save money
on your electric bill.
In other business,
incumbent directors
Gary Kluthe, Al Perry
and Dwayne Breyer were
unopposed and elected to Dwayne Breyer
three-year terms.
More than 300 people enjoyed dinner at the Mueller Center Auditorium.
COOPERATIVE CONNECTIONS • July 2012 11