Climate Challenge Participation Letter

DOE's Energy Partnerships for a Strong Economy

The Climate Challenge Program is a joint, voluntary effort of the United States Department of Energy ("DOE") and the electric utility industry undertaken in pursuit of the President's goals for reducing greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Memorandum of Understanding dated April 20, 1994 ("Climate Challenge MOU"), (see Attachment A to this Participation Accord).

This Participation Accord describes the actions that East River Electric Power Cooperative (East River) and DOE have committed to undertake under the Climate Challenge Program. East River's commitments include specific activities and efforts to reduce, avoid, or sequester greenhouse gas emissions. DOE's commitments include specific actions designed to assist East River in achieving its Climate Challenge Commitments.

East River is a private not-for-profit wholesale power supply cooperative which serves 24 distribution rural electric cooperatives and one municipal electric system in eastern South Dakota and western Minnesota. On behalf of the 25 distribution systems, East River contracts for the bulk power supply from the Federal government and Basin Electric Power Cooperative. East River also owns and operates 2,500 miles of high voltage transmission line and 200 substations. (For more detailed information on East River see Attachment 1).

Additionally, the electric cooperatives listed in Attachment B have an ownership interest in and receive bulk electric power from East River. Due to this ownership and power supply relationship, the cooperatives in Attachment B will participate in the Climate Challenge Program through East River.

I. East River Commitments.

A.
Consistent with Paragraph II.B. 1. and Exhibit B of the Climate Challenge Program MOU, East River has or will undertake the following actions:
• Demand-Side Management
• Transmission Efficiencies
• Renewable Energy Generation Technologies/Wind Power
• Ethanol Use
• Industry-wide Initiatives on Geothermal Heat Pumps

See Attachment 1 for more information about East River's commitment.

B.
East River will report to DOE annually on its activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to [[section]] 1605(b) of the Energy Policy Act and the Supplemental Guidance on Commitment Definitions and Reporting in Exhibit B of the Climate Challenge MOU. The first such report may include a description of the activities and achievements of East River prior to its becoming a participant in the program, expressed on an annual basis to the extent possible.

C.

East River will confer with DOE no later than October 31, 1996 regarding East River's participation in the Climate Challenge Program. The purpose of such meetings will be to evaluate East River's progress towards achieving its Climate Challenge commitments and possible adjustments to these commitments based on the availability of reasonable, cost-justified activities for reducing greenhouse gas emissions.

D.

The Climate Challenge representative for East River will be Mr. Scott Parsley, Assistant General Manager-Member Services, P.O. Drawer E Madison, South Dakota 57042. East River will notify DOE prior to or, in any event, no later than 30 days after any change in contact.

II. DOE Commitments.

A.
DOE will perform the actions and fulfill the commitments set out in section III of the Climate Challenge MOU.

B.

The Climate Challenge representative for DOE will be Mr. Larry Mansueti, Director, Climate Challenge Program, Office of Utility Technologies (EE- l0); 1000 Independence Avenue, S.W., Washington, DC 20585, (202) 586- 2588. DOE will notify East River prior to, or in any event, no later than 30 days after any change in representative.

C.

DOE will meet with East River upon request regarding possible adjustments of the Climate Challenge commitments set forth in subsection I.A. of this Participation Accord.

D.

DOE will consider requests by East River to intervene in proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to East River for purposes of addressing Climate Challenge Program issues, it will provide notice to East River.

E.

To the extent permitted by applicable law and regulations and by the availability of funds, DOE will consider East River's participation in Climate Challenge as a factor to be weighed positively

in evaluating applications for financial and other assistance submitted to DOE in support of commitments made by East River under this Participation Accord.

F.

DOE agrees to provide public recognition to East River for its Climate Challenge activities. DOE will, among other things, prepare an annual report summarizing results achieved under Climate Challenge and highlighting any outstanding achievements or innovative approaches of East River.

A.
Use of any DOE-developed materials by East River will be governed by the provisions of section IV of the Climate Challenge MOU.

B.

In addition to the foregoing provisions, DOE and East River agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provisions set forth in subsections V.A., V.B., V.C., V.D., V.F. and V.G. of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.

Either party may withdraw from this Participation Accord or any of the activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

U.S. DEPARTMENT OF ENERGY

(Original Signed By)
Hazel O'Leary
Secretary of Energy

EAST RIVER ELECTRIC POWER COOPERATIVE

(Original Signed By)
Jeffrey L. Nelson
General Manager

Attachments:

Attachment A - Climate Challenge Program MOU and Exhibits
Attachment B - Distribution Cooperatives Which are Participating in the Climate
Challenge Program through East River

Manager              Cooperative                              Address



Ron Koupal            Bon Homme-Yankton Electric       P.O. Box 158, Tabor, SD 57063



Mark Mengenhauser     Charles Mix Electric Assn.       P.O. Box 10, Lake Andes, SD 57356



Paul Roberts          Clay-Union Electric Corp.        P.O. Box 317, Vermillion, SD 57069



Bert Voegele          Codington-Clark Electric Coop.   P.O. Box 880, Watertown, SD 57201-0880



Robert Rademacher     Dakota Energy Cooperative        P.O. Box 830, Huron, SD 57350-0830



Merlin Goehring       Douglas Electric Cooperative     P.O. Box 370, Armour, SD 57313



David Holland         FEM Electric Association         P.O. Box 468, Ipswich, SD 57451



Gary Cramer           H-D Electric Cooperative         P.O. Box 1007, Clear Lake, SD 57226



Loren Noess           Intercounty Electric Assn.       P.O. Box 850, Mitchell, SD 57301



Dennis Kruse          Kingsbury Electric Coop.         P.O. Box E, Desmet, SD 57231



James Mammenga        Lake Region Electric Assn.       P.O. Box 341, Webster, SD 57274   



Gordon Crawford       Lincoln-Union Electric Co.       P.O. Box 105, Alcester, SD 57001-0105



Michael Buckle        Lyon-Lincoln Electric Coop.      P.O. Box 639, Tyler, MN 56178



Darrell Kirby         McCook Electric Cooperative      P.O. Box 250, Salem, SD 57058



Dennis Hagny          Northern Electric Cooperative    P.O. Box 457, Bath, SD 57427



Vernon Jutila         Oahe Electric Cooperative        P.O. Box 216, Blunt, SD 57522



Robert Westby         Renville-Sibley Cooperative      P.O Box 68, Danube, MN 56230



Jim Kiley             Sioux Valley Empire Electric     P.O. Box 216, Colman, SD 57017



Sherry Baloun,        Spink Electric Cooperative       P.O. Box 40, Redfield, SD 57469
Acting Manager                   



Don O'Leary            Traverse Electric Cooperative   P.O. Box 66, Wheaton, MN 56296



Clarence Moshier       Tri-County Electric Assn.       P.O. Box 130, Plankinton, SD 57368  



Brad Schardin          Turner-Hutchinson Electric      P.O. Box 388, Marion, SD 57043-0388



Larry Cheney           Union County Electric           P.O. Box 459, Elk Point, SD 57025



Brad Scott             Whetstone Valley Electric       P.O. Box 512, Milbank, SD 57252



Virgil Barrett,         City of Elk Point              P.O. Box 280, Elk Point, SD 57025
Utilities Superintendent 

East River purchases about 50% of our bulk power supply from the hydropower resources of the Western Area Power Administration Pick-Sloan Eastern Division. The balance of our bulk power supply comes from Basin Electric Power Cooperative and is primarily coal-fired generation located in North Dakota and Wyoming.

Because East River has a bulk power supply mix that is 50% hydro and 50% coal- fired, those activities that we undertake in terms of energy efficient equipment promotion, demand-side management and transmission system improvements serve to maximize the utilization of our hydroelectric resource as we always use this resource before purchasing the coal-fired resource.

The following action items by category are the commitments made by East River Electric Power Cooperative and its members to reduce, avoid, or sequester greenhouse gas emissions.

Demand-Side Management:

Load Management System:

Since 1984 East River has owned and operated a load management system on behalf of its member systems . East River will continue to operate this load management system, which covers a geographic area of approximately 36,000 square miles or the entire East River service area in eastern South Dakota and western Minnesota. All of East River's member systems utilize the load management system by providing demand-side management on water heating, home heating, air conditioning, crop drying, irrigation and commercial and industrial applications. East River has several agricultural and industrial loads, as large as 3 MW, that are controlled by the load

East River's member systems offer incentive rates to encourage end consumers to utilize the load management system. As part of East River's Strategic Plan, we encourage customers, particularly large load industrial customers to install standby generation in order to maximize the load management system. Again incentive rates are offered to enhance this application. In total East River operates and positively controls approximately 40,000 electrical devices in homes and business and industry throughout its entire service area.

Through the use of East River's demand- side management program East River is able to both reduce KWH usage and shift KWH usage to a non-peak time. Kilowatt hour usage is reduced by controlling home heating systems with dual fuel systems. When the electric heating system is controlled another system fueled by an alternate energy source satisfies the home heating requirements, thus totally avoiding the KWH usage. In those systems that store heat through ceramic bricks or water the reheating of bricks or water occurs when we are in a non-peaking mode, thus maximizing the use of the hydroelectric bulk power supply.

The individual cooperative members do not have control over the load management system but it is rather an integrated system balancing East River's entire load. The load management system is operated in accordance with a pre- set operating procedure that dictates the order in which loads will be removed from the power system and restored to the power system, thus avoiding shadow

Incentives to Acquire Energy Efficient Appliances and Equipment:

East River has and will continue through its member systems to offer rebates for end consumers to purchase energy efficient water heating, home heating, air conditioning and industrial equipment. In addition to its rebates, East River and its member systems offer low interest loans for the purchase of energy efficient equipment. For the past several years the consumer rebates have amounted to approximately three-quarters of a million dollars while the loans made available for the purchase of energy efficient equipment have averaged approximately $1.2 million per year. East River and its members will continue to offer this type of rebate and loan program through the year 2000.

These rebates are available primarily for air-to-air and ground source heat pumps, high efficiency electric resistant water heaters, natural air crop drying systems and automatic restart equipment for irrigation systems. Low interest loans are available to supplement equipment costs over and above rebates and for crop drying and industrial applications, particularly as they relate to incorporation of use of the load management system.

Transmission Efficiencies:

As East River operates and maintains its high voltage transmission system and substations and makes improvements to those facilities we continually look for the most energy efficient conductor and transformers in order to reduce line and transformation losses. East River will continue utilizing the most efficient equipment for system improvements in the future.

Therefore, we estimate a reduction of CO₂ emissions by approximately 166 short tons in the year 2000 and a total reduction of approximately 1,000 short tons of CO₂ for the time period between 1995 and 2000.

Renewable Energy Generation Technologies/Wind Power:

East River and its member systems purchase off system approximately 234 MWH of wind energy annually. These purchases are from small (under 40 KW) wind generators privately owned by our electric customers.

East River will continue to purchase power generated by these systems, assuming they will continue to be operational in the year 2000. Given that assumption we estimate that these purchases will account for reduced CO₂ emissions by approximately 200 short tons in the year 2000 with a total of 1,000 short tons of CO₂ reductions between 1995 and 2000.

Ethanol Use:

East River operates a fleet of vehicles. sedans, light duty pickup trucks and other vehicles that burn gasoline and travel approximately 750,000 miles annually. All of the gasoline purchased by East River for these vehicles is a 10% ethanol blend fuel. According to the Environmental Protection Agency (EPA), regular gasoline emits approximately 21.5 pounds of CO₂ per gallon while 10% ethanol blended gasoline emits approximately 5.25 pounds of CO₂ per gallon. East River purchases approximately 35,000 gallons of 10% ethanol blended gasoline annually. The environmental results for East River between 1991 through 1994 based on ethanol use are a reduction of CO₂ emissions by 1,138 short tons. East River will continue to use ethanol, resulting in estimated CO₂ emission reductions of approximately 300 short tons in the year 2000 and 1,450 short tons between 1995 and 2000. East River also has one E- 85 flexible fuel vehicle in its fleet. This vehicle is capable of burning fuel from straight gasoline to an 85% ethanol-blend. We have facilities available in the area to purchase 85% ethanol- blended fuels commercially and do utilize 85% ethanol-blend in this vehicle. All future vehicles purchased by East River will be specified as flexible fuel E-85 vehicles, therefore enhancing the reduction in carbon emissions and increasing the oxygenated emissions from East River's vehicle fleet.

East River was a founding member of the Prairie Heat Pump Association. This Association's membership is made up of local utilities, rural electrics and investor-owned utilities and HVAC contractors. The Prairie Heat Pump Association provides training and certification for HVAC contractors in the sales, installation and maintenance of both air-to-air and ground source heat pumps. Through our association with the Ground Source Heat Pump Training and Research Facility, we have provided scholarships for contractors to attend training programs on heat pump installation and maintenance as well as scholarships for vocational college students who are studying heating, ventilating, cooling and air conditioning.

East River has and plans to continue helping financially support demonstration installations and heat pumps primarily at regional vocational colleges that offer HVAC instruction. To date we have worked with the Department of Energy, Basin Electric Power Cooperative, our member systems and area vocational

colleges in installing two ground source heat pumps, one at the Mitchell Vocational College in Mitchell, South Dakota, and the second at Southeast Vocational College in Sioux Falls, South Dakota. These vocational colleges use these heat pump installations for a training program for their students. Our goal in this program is to train students to work on heat pumps which will lead to more application of this technology by these students as they enter the HVAC contracting business.

Please send comments to:

Lawrence.Mansueti@hq.doe.gov