CEO’s Report: How the Infrastructure Investment and Jobs Act affects public power

President Joe Biden signed into law the Infrastructure Investment and Jobs Act on November 15. The bill includes $1.2 trillion in funding, including $550 billion in new federal spending that was not previously authorized.

The bill includes $7.5 billion in federal spending for electric and alternative fuel vehicle infrastructure, $65 billion for broadband infrastructure, $65 billion for electric and grid infrastructure, $7.5 billion for zero- and low-emission school buses and ferries, and $47.2 billion for resiliency, including cybersecurity.

The American Public Power Association will host a free webinar for members on Thursday, December 9 at 1:00 p.m. on what was included in the new law and what potential funding opportunities may be available to public power in the coming years as a result.

All Heartland customers are members of APPA and are encouraged to participate in the webinar. More information and registration details can be found on their website.

In the meantime, I would note a few opportunities of interest to public power.

Grid Infrastructure and Resiliency

Several sections of the bill are dedicated to electric grid reliability and prevention of outages.

One section would create a $5 billion grant program through Department of Energy to prevent power disruptions, or events in which the grid can’t be operated safely due to extreme weather or natural disaster.

Eligible entities would include electric grid operators, electricity generators, distribution providers and others. DOE may make grants directly to eligible entities in addition to a formula grant to be distributed to states and tribes. The program includes a small set aside of 30% for eligible entities that sell less than 4 million MWh of electricity per year. Additional information can be found here.

Another section authorizes and appropriates $5 billion for a new competitive DOE program called the “Program Upgrading our Electric Grid and Ensuring Reliability and Resiliency.” States, tribes, units of local government and public utility commissions would be eligible to apply for funding to coordinate and collaborate with the electric sector to demonstrate innovative approaches to transmission, storage, and distribution infrastructure that harden and enhance resilience and reliability.

It also appropriates $1 billion for a new DOE program to provide financial assistance to improve reliability and safety of energy in rural and remote areas defined as cities or towns with populations of 10,000 or less.

Cybersecurity

Enhanced grid security as well as rural and municipal utility cybersecurity will be a priority with this bill. One section will require DOE to carry out a program to promote and advance the physical security and cybersecurity of electric utilities, with priority provided to utilities with fewer resources.

$250 million will be available through DOE for a “Rural and Municipal Utility Advanced Cybersecurity Grant and Technical Assistance Program” to provide grants to utilities to detect, respond to, and recover from cybersecurity threats.

Charging and Fueling Infrastructure

A grant program funded at $2.5 billion will be available at the Department of Transportation to provide grants to eligible entities, including public power utilities, for the deployment of electric, hydrogen, propane or natural gas vehicle infrastructure along designated Alternative Fuel Corridors.

Entities are required to contract with a private entity for the acquisition and installation of fueling infrastructure. Fifty percent of the overall funding is set aside for “Community Grants” for which public power utilities would also be eligible. These grants do not require, but allow for, partnerships with private entities and can be used to deploy fueling infrastructure in public locations including parking facilities, public buildings, public schools and parks.

Other Funding of Note

In addition, the infrastructure bill includes $65 billion for broadband, $47 billion for climate resiliency, $21 billion for environmental projects and $2 billion for underserved rural areas.

I again encourage you to take part in the free APPA webinar on December 9.  APPA plans to hold an additional webinar in early 2022 to provide an overview of the federal grant process, including how to find and apply for grants, likely application requirements and any updates on the timeline for federal agencies to implement the infrastructure law.

Heartland staff will participate in the webinar and keep customers apprised of any developments related to the bill.

CEO’s Report: Emphasis on energy needed in infrastructure talks

Two infrastructure bills are currently floating through Congress, each with different meanings and implications for public power.

Each bill deals with a different type of infrastructure. One is geared towards more traditional infrastructure such as roads and bridges. The other is geared towards social infrastructure. The Biden Administration has expanded the term to include such provisions.

Social infrastructure

H.R. 5376, otherwise known as the Build Back Better Act, deals with social infrastructure. Last week the White House announced a $1.75 trillion “framework” for an agreement on the Build Back Better Act. It includes $550 billion over 10 years for clean energy and climate programs.

The package is likely to evolve, but today includes $320 billion in tax credits and $110 billion in incentives to increase domestic supply chains for solar, batteries and advanced materials.

Tax credits would be for “utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing.”

The legislation would extend existing tax credits for wind and solar projects. It would also create a greenhouse gas reduction fund and provide state grants for electric vehicle charging stations.

The bill has undergone significant changes since the first draft was released, including dropping the $150 billion Clean Electricity Performance Program, which would have rewarded electric providers for meeting clean energy targets and penalizing those that didn’t.

CEPP would have placed unrealistic targets on utilities and created financial burdens for ratepayers.

House and Senate Committees must next move to flesh out details of the agreement and then finish drafting it as legislative language. While this process is underway, there is still time to modify the final contents of the bill.

The bill could be held up by Sen. Joe Manchin, (D-W.Va.), who has demanded more time to evaluate the projected economic impact of the bill. The bill would likely require votes of all 50 Democrats in the Senate for passage, as no Republicans are expected to support it.

The American Public Power Association will continue to work to ensure that any extended and expanded energy tax credits are available to public power as refundable, direct payment energy tax credits; and ensure that an expansion of energy tax credits include hydropower tax credits as proposed by Senator Maria Cantwell (D-WA).

Traditional infrastructure

H.R. 3684, the Infrastructure Investment and Jobs Act, deals with more traditional infrastructure such as roads and bridges. The $1.2 trillion bipartisan bill passed the Senate and awaits passage in the House.

Headshot of APPA CEO Joy Ditto

The bill includes $550 billion in new spending, including money for roads, bridges, railroads, airports, broadband infrastructure and more. It also includes $65 billion for the power grid to update power lines and cables and prevent hacking of the grid. Clean energy funding is also included.

APPA CEO Joy Ditto recently penned an opinion piece for The Hill, sharing thoughts on how the infrastructure bill represents a significant opportunity to support public power.


“It is no exaggeration to say that our energy infrastructure is the lifeblood of our economic and national security and is vital to the health and safety of all Americans…We urge congressional and White House negotiators to continue to treat energy infrastructure as a front-burner issue.”

Joy Ditto, APPA President & CEO

You can read her piece here at The Hill.

As always, Heartland will continue to monitor both bills and their potential impact on public power utilities.

New Ulm benefits from increased demand for renewable energy

Heartland facilitates sales of excess RECs

The electric grid is complex.

When electricity is generated, whether it be from coal, natural gas, wind, or solar, it flows where it’s needed. The grid can’t distinguish the source or direct it to go to a certain location.

Utilities in Minnesota are required to generate or procure 25% of their total retail electric sales from renewable sources by the year 2025.

Since utilities can’t control where power flows on the grid, a special system had to be created to identify and claim renewable sources of power.

Renewable Energy Credits, or RECs, are proof that electricity was generated by a renewable energy source and delivered to the electric grid.

New Ulm Public Utilities recently worked with their wholesale power supplier, Heartland Consumers Power District, to sell excess RECs, providing a financial boost to the utility of over $300,000.

How do RECs work?

Each time one megawatt-hour of electricity is generated from a renewable resource such as wind, one REC is created.

If you own the renewable energy source, you own the REC generated. It is your choice to claim the credit or sell it. Claiming the credit also retires the credit and shows proof of utilizing renewable energy.

The Midwest Renewable Energy Tracking System (M-RETs) tracks renewable energy generation and assists in verifying compliance with renewable portfolio standards, such as Minnesota’s.

M-RETS creates a renewable energy certificate for every MWh of renewable energy produced in the region. The system is used to verify, manage and trade RECs.

Once a REC is retired, it cannot be used again.  RECs are uniquely numbered and include information such as where they were generated, the type of renewable resource they came from and a date stamp of generation.  This is done to prevent the double-counting of renewable generation. 

By purchasing RECs, the owner has certified proof of using renewable energy without having to install a renewable system on their home or business. Purchasing RECs also supports the renewable energy market. RECs are tradable, non-tangible commodities.

Increased demand drives up prices

New Ulm Public Utilities acquires RECs through their wholesale power supplier, Heartland Consumers Power District. Heartland’s resource mix includes wind energy from the Wessington Springs Wind Energy Center, a 34 turbine, 51 MW wind farm in Jerauld County, SD.

Wessington Springs Wind Energy Center in Jerauld County, SD.
Heartland’s resource mix includes the Wessington Springs Wind Energy Center in Jerauld County, SD.

New Ulm currently receives 5.5 MW of wind energy around the clock from Heartland. Of the 167,000 MWh of energy New Ulm purchases from Heartland, about 29%, or 48,000 MWh is from wind energy.

Therefore, New Ulm acquires 48,000 RECs each year.

Heartland helps administer New Ulm’s RECs through M-RETs. Data from the wind farm is submitted by a third-party so RECs can be created based on energy generated. Heartland maintains a separate New Ulm holding account under Heartland’s M-RETS account to keep track of their quantity of RECs and the year each was created. Heartland is then able to retire RECs on behalf of New Ulm.

Demand for RECs has risen dramatically over the past year, pushing REC prices higher. Heartland approached New Ulm about selling excess RECs because of the higher prices.

Because New Ulm purchases more wind energy than necessary to meet the state standard, Heartland marketed New Ulm’s surplus RECs and sold them for a net price of $5.04 each, totaling over $317,000.

“Heartland continuously monitors the REC market,” said Heartland Chief Operations Officer Nate Jones. “Like any market, the recent increase in demand for RECs has driven the price up. That proved beneficial as New Ulm had excess certificates to sell. We are happy to provide this service on their behalf.”

CEO’s Report: Cold weather creates energy emergency

Customers asked to conserve energy to protect electric grid

Subzero temperatures may not seem that unusual in the Midwest. But, the electric grid was hit with unprecedented demand the week of February 14 as record low temperatures extended up and down the central portion of the United States.

Utilities across the region were thrust into new territory as calls came for consumers to conserve energy. Rolling blackouts were carried out in some areas to prevent damage to the electric grid.

Heartland customers stepped up to help their fellow utilities by echoing requests for residents and businesses to conserve electricity. Public power ideals shone through.

While the state of Texas made headlines during the extreme weather event, limited interruptions of service in Heartland’s service territory were seen. While Heartland customers are situated in two different regional transmission organizations (RTOs), Southwest Power Pool experienced conditions unlike ever before.

Understanding how SPP works

Southwest Power Pool (SPP) operates the electric power grid in a 14-state region on behalf of member utilities. Their service area stretches from North Dakota down into parts of Texas.

SPP does not own electric generation resources or transmission lines, but rather balances the supply and demand of electricity minute-by-minute to ensure power gets to customers.

When electricity is generated, it goes into a “pool,” and from that “pool,” SPP manages the energy market throughout the central portion of the U.S. They ensure the amount of power sent is coordinated and matched with power received.

They are like the “air-traffic controllers” of the electric grid.

When one area is affected by extreme weather or another event, power generated in other areas can be dispatched to meet demand.

However, this event created record cold temperatures throughout SPP’s service territory. Areas with typically mild weather were below freezing and northern states stayed below zero for several days. This created an unprecedented demand on the electric grid.

It also put a strain on the available resource pool. Demand for natural gas, both as a heating source and for electrical generation, increased substantially. This caused supply shortages, exacerbated by the impacts of unusually cold temperatures on generation facilities in southern SPP.

During this period, SPP also experienced unusually low wind levels, significantly impacting available wind generation. A combination of seasonally unprecedented demand with these supply constraints created a “perfect storm.”

Energy Emergency Alerts declared

SPP declared the first Energy Emergency Alert (EEA) early on the morning of February 15 as the electric grid throughout SPP’s operating area saw increased strain.

SPP fluctuated between three different levels of emergency status through February 19. At level 1, enough generation is available to meet demand, but backup resources are below necessary levels. This could be considered the warning stage.

At level 2, all generation requirements can no longer be met and outside assistance is requested to meet demand. Consumers are asked to conserve energy to prevent power shutoffs.

SPP entered a level 3 EEA twice, once on February 15 and once on February 16. At this level, there is not enough electricity being generated to meet demand and power outages may be utilized to reduce demand and protect the system.

Two Heartland customers were affected by the controlled outages included Tyler, MN and Valentine, NE.

This marked the first time in SPP’s 80-year history it declared Energy Emergency Alert Levels 2 or 3 for its entire region. It is also the first time the grid operator has had to direct member utilities to implement controlled, temporary service interruptions to prevent widespread blackouts.

When the demand on the system outweighs the amount of electricity available, potential for catastrophic damage exists; damage that would result in much longer outages.

Market benefits

Heartland joined SPP in 2015. The integration provided greater flexibility and increased options for buying and selling power. While this particular weather event did create some inconveniences, market participation still comes with many benefits.

The goal of an RTO like SPP is to provide the lowest cost wholesale energy possible through the least cost generation dispatch.

With a vertically integrated utility, where the utility owns generation, pays for transmission and sells power directly to the consumer, there is more risk. During an event like we saw in mid-February, if our generation source was unable to perform, all customers would have been affected.

Participating in a market reduces that risk by having access to the entire pool of generation resources. The same is true any time of year. If for any reason, our generation is limited, we draw from the pool to serve customers.

Owning generation in the market also comes with benefits. Market prices fluctuate and during the February polar vortex, prices escalated as demand surged. Utilities that depend largely on the market for power were subject to those increased prices, such as we heard about in Texas.

Heartland, on the other hand, also sells generation into the market, which helps balance out our position. Our diverse resource mix helps protect customers against market swings.

Public appeals

Heartland issued public appeals to consumers to conserve energy throughout the energy emergency.

We continually communicated with customers, keeping them informed of which level SPP was operating at and measures they could take to control demand. We also blasted social media with energy conservation tips, and did our best to keep everyone apprised of the situation.

Utilities served by Heartland orchestrated their own appeals to consumers and took available measures to conserve electricity in their communities.

Every simple action taken helped protect the entire system. As public power communities, our customers gave new meaning to the term “community powered.”

Barbara Sugg, SPP president and chief executive officer, thanked SPP members, neighboring systems and the millions of people in the region for their response to the historic event.

“This has been a case study in everyone doing their part on behalf of the greater good. We take our responsibility to keep the lights on very seriously and appreciate the trust placed in us to do so. Thanks to voluntary conservation by people across our 14-state region, the quick actions taken by local utilities, and the dedication and expertise of our operators, we’re thankful we could keep the region-wide impact of this storm to a minimum.”

Fortunately, the energy emergency ended by February 19  and SPP returned to normal operations as warmer weather moved across the region.

Water system hack should alarm electric utilities

Electric utilities should pay close attention to a recent cyber incident in Oldsmar, Florida. Hackers broke into the city’s SCADA system at a water treatment plant and tried to poison the supply.

Unlike SolarWinds and other headline-grabbing breaches, this attempt was not sophisticated. Rather, the hackers exploited the city’s outdated operating system and weak passwords.

Although city employees thwarted the attack, the threat was real. Security experts say it illustrates the importance of cybersecurity for critical infrastructure providers.

Poison attempt

Cyber criminals broke into Oldsmar’s SCADA controls on two separate occasions on February 5. Once in, they tampered with the levels of sodium hydroxide, or lye, in the water treatment process.

Gone unnoticed, the change would have threatened the health of Oldsmar residents. But plant employees caught it immediately–even before SCADA detected the manipulation.

They corrected the dosing amount and the process and water supply remained unaffected.

Vulnerabilities exposed

The FBI is investigating the compromise along with state and local authorities. In a joint advisory with the Cybersecurity and Infrastructure Security Agency (CISA), it blamed the event on several attributing factors.

The cyber actors accessed the system using TeamViewer, a remote access, desktop-sharing software. Oldsmar personnel used TeamViewer to conduct system status checks and respond to issues throughout the plant.

The FBI and CISA say TeamViewer is “a legitimate popular tool that has been exploited by cyber actors.” It gives hackers unauthorized control over computer systems in a less suspicious manner.

Another vulnerability existed in the city’s computer systems. Every computer within the plant used the outdated operating system, Windows 7.

Microsoft ended support for Windows 7 in January of 2020. Some users can still buy security updates and patches, but on a limited basis and only until January 2023.

Experts say the technology is obsolete and continued use puts organizations at risk. In an interview with “Cybersecurity Dive,” security researcher John Hammond offered this analogy: “Leaving an outdated, unsupported and overall dead technology running in production isn’t ‘like leaving the door open’ — it’s like there is no door at all.”

Finally, authorities say the city lacked basic protective measures. The computers shared the same password for remote access and connected to the Internet without a firewall in place.

Power industry should pay attention

The FBI and CISA say the Oldsmar attack is a sign of a growing trend. Organizations in the critical infrastructure sector — including electric utilities — should be on high alert.

Gary Kinghorn is a marketing director at Tempered, which specializes in network security. He believes the similarities between water and electric utilities make them equally vulnerable.

“They are both mission critical and there is a chance to do real damage,” he told “Cybersecurity Dive.”

Both utility systems are difficult to maintain, patch and secure, and yet remote access is a necessity. Kinghorn said more people must take the situation seriously. As remote access becomes more commonplace, systems must become more secure.

Organizations must also stop using outdated software. Despite its flaws, Windows 7 is still widely used. By some estimates, roughly 100 million computers use it in the U.S. and twice that world-wide.

It is especially rampant in small- and medium-sized organizations, or those averse to updates. Utilities using the antiquated system leave the infrastructure – and the communities they serve – exposed.

Mitigations available

After the attack, experts offered cyber hygiene measures to help protect critical facilities.

Kinghorn suggested identity-based remote access policies and military grade encryption.

The FBI and CISA urge upgrading outdated operating systems and using multi-factor authentication with strong passwords.

Other recommendations include:

  • Restrict all remote connections to SCADA systems, specifically those that allow physical control and manipulation of devices within the SCADA network.
  • Keep computers, devices, and applications, including SCADA/industrial control systems (ICS) software, patched and up-to-date.
  • Install a firewall software/hardware appliance with logging and ensure it is turned on.
  • Train users to identify and report unusual activity and attempts at social engineering.

Beyond the simple measures, utilities might also consider an investment in cybersecurity tools and technology. After all, electric utilities have a responsibility to maintain a strong electric grid.

Lessons learned

The residents of Oldsmar were lucky. Poor security hygiene left the city’s system and water supply exposed. Had it not been for attentive staff, the story could have had a much different ending.

Security experts say this event is a cautionary tale. The industry should learn from Oldsmar’s mistakes before it’s too late.

Because the next attack is coming, they say, and could be more sophisticated. Electric utilities and other critical infrastructure providers should remain vigilant.

Featured image: Chris Urso/Tampa Bay Times via ZUMA Press, ABC News

What is SPP and how do their actions affect you?

A message from Heartland CEO Russell Olson

Over the last few days, we’ve experienced an unprecedented bout of cold weather. Record low temperatures were recorded across the 14-state region covered by the Southwest Power Pool (SPP), which stretches from North Dakota down into parts of Texas.

As a result, you were asked to conserve energy and, in some cases, controlled power outages were implemented to prevent longer, sustained outages.

You may be wondering what was so unusual about this cold snap. Why did we have to curb usage during what many of us consider a normal weather event?

First, you have to understand how SPP works.

Chances are you never heard of SPP before now. SPP is a regional transmission organization that operates the electric power grid on behalf of member utilities.

Essentially, the power grid is shared across the 14 states SPP serves. SPP does not own generation (electricity production) or the transmission lines (movement of electricity).

Rather, it balances the supply and demand of electricity minute-by-minute to ensure power gets to customers. Think of SPP as the grid’s “air traffic controller.”

When electricity is generated, it goes into a “pool,” and from that “pool,” SPP manages the energy market throughout the central portion of the U.S.

SPP ensures that the amount of power sent is coordinated and matched with power received. This allows the grid to be operated more efficiently and reduces costs.

So why does cold weather in Oklahoma affect how you use electricity?

Typically, extreme weather is limited to a smaller portion of the region. Power generated in one area can be dispatched to another area that needs it. It’s akin to neighbors helping neighbors.

However, the extreme cold of the last few days stretched across the region. Areas with typically mild weather saw unusual negative temperatures. This created an unprecedented demand on the electric grid.

It also put a strain on the available resource pool. Demand for natural gas, both as a heating source and for electrical generation, increased substantially because of the extreme cold. This caused supply shortages, exacerbated by the impacts of unusually cold temperatures on generation facilities in southern SPP.

During this period, SPP also experienced unusually low wind levels, significantly impacting available wind generation. A combination of seasonally unprecedented demand with these supply constraints created a “perfect storm.”

To protect the system, SPP has had to implement controlled outages throughout the region. This is a first in the company’s 80-year history. These decisions are not made lightly and are done as an absolute last resort. Though inconvenient at best, the shutoffs prevent damage to the transmission system, which would result in much longer outages.

Fortunately, warmer weather is on the way, easing system strain. SPP ended the energy emergency alert the morning of February 18. At this time, we don’t expect to see further scheduled outages.

We appreciate your cooperation in helping conserve and limit energy during this historic, trying time. Your small efforts helped create a greater impact that protects all electric customers.

Your efforts are what living in public power communities are all about. The last few days have given new meaning to term “community powered,” and we are grateful for your actions.

CEO’s Report: Advocating for our customers

Later this month we will travel to Washington. D.C. to participate in the annual American Public Power Association Legislative Rally.

Each year, electric utilities, and public power utilities in particular, face new issues and regulations that impact our ability to provide affordable, reliable power.

This year is no different. We plan to spend our time in D.C. wisely, educating our Congressional leaders on the value public power provides and the impact decisions they’re making in D.C. has on our customers.

Some of the topics we plan to broach this year include protecting federal ownership of the power marketing administrations, market concerns, solar distributed generation, as well as grid security.

#1: Preservation of the PMAs

It seems every few years the notion of privatizing the federal power program gets brought up. While the idea has never gained any real traction, the Trump administration recently proposed selling the transmission assets of the federal Power Marketing Administrations (PMAs).

Many Heartland customers receive cost-based hydroelectric power produced at federal dams and marketed by the PMAs. Therefore, Heartland will continue to advocate on their behalf and oppose these measures which could result in substantial, unjustified electric rate increases.

#2: Congressional oversight of FERC market policies

While participating in the RTO-operated wholesale energy markets, such as the Southwest Power Pool, can produce benefits for public power utilities in terms of cost savings and additional opportunities to sell power, there are still potential problems with the markets that require oversight. One of Heartland’s main concerns is the ability of some generators to strongly influence market prices, most of which is downward pressure.

For example, generators located away from load centers can provide a burdensome downward pressure on the market due to transmission constraints. Pricing influence can also be upward during emergency conditions. FERC has traditionally taken a hands-off approach as to whether resulting rates are just and reasonable within the RTOs. Heartland and APPA support congressional oversight of FERC market policies to ensure fairness.

#3: Fair governance of solar distributed generation

Utility customers across the country are installing distributed generation (DG) facilities that employ small-scale technologies to produce electricity. The price of solar panels continues to decline, and incentives are made available to offset the price of installation, leading to growth.

While solar installations can play an important role in energy production, solar DG customers must still pay their fair share of costs of keeping the grid operating safely and reliably.

Heartland and APPA oppose any attempts by Congress or federal agencies to federalize standards for DG implementation or rate designs. These are matters of state and local regulation and should be designed to reflect costs and assure that those who benefit from the grid are sharing the costs of building and maintaining it.

#4: Grid protection against cyber threats

Cyberattacks are becoming more predominant and the strength of the electric grid remains a top concern. While the industry has made great strides in addressing cybersecurity threats, there is still much work to be done.

Heartland continues working with industry partners to protect our customers, but will also be addressing necessary regulations and legislation to ensure the grid is protected.

Heartland board members and staff met with U.S. Representative Kristi Noem (R-SD) during the 2017 APPA Legislative Rally.

These are only some of the issues we will bring before our members of Congress later this month. In past years we have met with legislators from every state in which Heartland has a customer or resource including Minnesota, South Dakota, Kansas, Wyoming, Iowa and Nebraska.

During some meetings, we provide education on public power, Heartland, our resources, and our customers. Others already have a great knowledge of public power and the issues facing our industry.

If there are specific concerns your utility or your customers have that you’d like addressed at the Rally, please let us know. We are there to advocate for our customers and look forward to productive meetings with our representatives.

To learn more about APPA’s position on key issues, visit their website at www.publicpower.org/policy-positions.

CEO’s Report: Know the issues, know what you can do

Public Power’s 2017 legislative priorities

Heartland serves as an advocate for our customers, promoting policies that put our customers first while ensuring a stable supply of electricity and protecting the environment.

Our ability to supply affordable and reliable power is shaped heavily by regulation.

Pending regulation such as the Clean Power Plan includes mandates that could negatively impact both of Heartland’s coal-fired generating resources, Laramie River Station and Whelan Energy Center Unit 2.

LRS has seen many upgrades over the years to keep it operating efficiently and investments were made at WEC2 at the start. We are concerned about the environment and have been taking necessary steps to ensure we’re doing our part to protect it. Regulations can often force expensive and unnecessary improvements beyond that, which comes at a greater cost to ratepayers.

The future of the Clean Power Plan and other regulations remains uncertain with a new administration in place. We are hopeful President Trump and the team he has assembled will be friendly to the industry, but we will continue to watch closely and advocate on behalf of our customers.

The upcoming American Public Power Association Legislative Rally is one place we will be making our voice heard.

During this year’s rally, held February 27 through March 1, Heartland will be meeting with senators and representatives from each of the states we have customers and resources in. Below is an infographic outlining the issues we will be discussing during those meetings.

Reducing Cyber Risk: Where to Start

By Nathan Mitchell, senior director of electric reliability standards and security, American Public Power Association
Contributed Story. Originally appeared in the November-December 2015 issue of Public Power

Innovation opens doors for opportunity. But it also opens new doors to risk. As those who would like to harm the electric grid find new and better ways to infiltrate the system, the industry must step up to the plate to make sure bad actors don’t get in. APPA recently held a webinar on cybersecurity challenges — part of a seven-part series on cybersecurity topics. Brad Luna, senior vice president of sales for n-Dimension Solutions in Dallas, Texas, laid out these basic steps to reduce cyber risk.

  1. Monitor network for threats It’s essential to identify a person or a team to be responsible for monitoring beyond a firewall. Common things to look for include malicious behavior and misconfigured systems.
  2. Perform vulnerability assessments This goes beyond monitoring. Your utility has to systematically seek out “open windows” through which bad-actors can get to your secure information. This includes threats facing desktops, servers and other IT systems.
  3. Watch for network configuration errors This often time comes down to your IT staff keeping on top of best practices and system updates (while handling other company issues).
  4. Ensure IT has the necessary knowledge Your IT professionals either need to be cybersecurity experts themselves or have access to experts. This often requires outside help.
  5. Establish policies and procedures In most cases, this is your first step toward success. Before you can successfully defend your utility from intrusion, you need to lay down the cybersecurity ground rules.
  6. Conduct awareness training Once you have in place policies and procedures regarding information security, you need to engage staff and get buy-in by delivering training.

Heartland recognizes the importance of protecting your data and has partnered with Helix Security to help you cover each of these steps and more. Helix has a proven reputation and can provide your utility with the resources needed to prevent a cyber attack.

For more information on cyber-readiness, check out APPA’s series of seven webinars on cybersecurity for electric utilities. Learn how to protect your utility, customers, community, and the electric grid from potentially damaging interruptions. Register online at www.publicpower.org.

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2015 Recap: Evolving to meet customer needs

Over the past several years, one might say the buzz word surrounding Heartland has been transition. From operations to leadership to customer programs–change has been a reoccurring theme. While 2015 was no exception, the transitions within Heartland echo a national and global energy landscape in flux due to increasing state and federal regulations, threats to security and rapidly changing market and usage trends. However, Heartland found over the past year that change comes with opportunity. As challenges present themselves, Heartland continues to grow, adapt and evolve in order to meet the needs of our customers and uphold our promise of exceptional customer service and reliable power supply.

SPP Integration

After years of preparation, functional control of the Integrated System (IS) was turned over to the Southwest Power Pool (SPP) on October 1. Joining a regional transmission organization proved to be the best possible scenario for the IS, ensuring efficient and reliable delivery of power by removing transmission barriers between buyers and sellers. SPP was found to be the most customer-friendly, least-cost option for IS owners Heartland, Western Area Power Administration’s Upper Great Plains Region and Basin Electric Power Cooperative.

The move was historic for Heartland, altering operations with a new and expanding workload. The most significant changes since beginning operation within SPP are how we operate our generation facilities and handle coordination with WAPA. Heartland also acquired additional duties on behalf of  customers who receive WAPA allocations within both the SPP and Midcontinent Independent System Operator (MISO) markets. Although we are not required to physically perform scheduling for WAPA, we are responsible for creating forecasts and producing load schedules to be used by WAPA for their daily scheduling.

In order to succeed in today’s rapidly evolving industry, flexible planning and dynamic response to demands will be key. The SPP market will provide greater flexibility for buying and selling power as well as increase price transparency and efficiency.

Cybersecurity

Buzz Hillestad, principal consultant and managing partner at Helix Security, discusses the importance of cybersecurity at Heartland's Summer Conference in July.
Buzz Hillestad, principal consultant and managing partner at Helix Security, discusses the importance of cybersecurity at Heartland’s Summer Conference in July.

The electric grid has served America well for more than 100 years, keeping our homes heated, our rooms lit and our computers running. It is a complex network of power plants, substations, transformers, wires, sensors and poles that carry electricity across miles of transmission lines to be distributed to homes, schools and offices. Information changes hands many times throughout the process of delivering electricity, and the smallest margin of error along the way provides an opportunity for a cyber attack.

Speaking at Heartland’s recent Winter Conference, WAPA CEO Mark Gabriel revealed that WAPA’s system has experienced hundreds of thousands of attacks annually from across the globe, including from within the United States. While the electric power sector and government partners continue to take steps to manage risks, utilities of all sizes must also be held accountable. Because everything is interconnected, the grid is only as strong as its weakest link.

With this in mind, Heartland partnered with Helix Security in 2015 to launch a new program to help customers protect their valuable data. Helix provides cybersecurity services in five phases, starting with the fundamentals and building towards a fully functioning security management package. Data protection such as this is vital for any utility, and with Heartland sharing in the cost, the program is very affordable and potentially one of the most important services we provide our customers.

Growing Customer Base

Garden City MainHeartland continues to pursue new opportunities to expand our customer base and strengthen our company. In 2015 we announced the addition of Auburn, Iowa, a community of approximately 320 people located in West Central Iowa. Situated within the Midcontinent Independent System Operator (MISO), Auburn has a peak demand of 600 kilowatts. Our contract with the city is for ten years, during which time Heartland will supply all of Auburn’s wholesale power supply needs beyond their federal WAPA allocation as well as act as the scheduling agent for that allocation.

Heartland began supplying power and electricity to Garden City, Kansas January 1. The Garden City commission approved a power supply contract with Heartland in June, agreeing to a supply of 15 megawatts for five years from Heartland resource Whelan Energy Center Unit 2 with the option to extend the contract for another five year term.

Situated within the SPP, Garden City’s electric department provides service to over 11,000 electric meters, maintains nine electric substations, 245 miles of overhead power line and 40 miles of underground power line throughout the city. This is Heartland’s first customer in Kansas, and Garden City’s proximity to WEC 2 as well as its location within SPP make it a perfect fit.

Customer Service and Advocacy

In 2015 we remained as dedicated as ever to our customers by finding new opportunities to provide assistance, additional funding, recognition and more.

  • Enhanced customer service programs: Heartland boosted both our energy efficiency and economic development programs with the addition of new opportunities for customers, including new energy efficiency rebates for lifetime warranty electric water heaters, residential LED light bulbs and commercial refrigeration, as well as new assistance programs for communities concerning Certified Ready Sites and spec buildings.
  • Riley Bullington, left, worked with Director of Economic Development Ryan Brown, right, on the customer research project in 2015.
    Riley Bullington, left, worked with Director of Economic Development Ryan Brown, right, on the customer economic development research project in 2015.

    Economic development research: Riley Bullington, a Dakota State University college student, spent several months interning at Heartland completing a research project aimed at helping our customers with business retention and recruitment ventures. Bullington collected demographic information and key economic development data for each of our customer communities to help Heartland determine where and how to invest resources in order to make the most impact. The information will also be used when meeting with prospective businesses, community developers and site selectors.

  • Distinguished Service Award: Heartland established the Distinguished Service Award in conjunction with Public Power Week, an annual opportunity for public power utilities to remind customers and stakeholders of the distinct advantages public power offers. It is designed to showcase public power utility employees in Heartland customer communities who are exceptional in service and who have made outstanding contributions to their municipality, community and other organizations. The inaugural recipient was Gary Horton, city administrator for the city of Akron, Iowa.
  • PURPA assistance: Because small renewable energy projects are growing more popular with homeowners and business owners, Heartland has taken steps to ensure our customer utilities are in compliance with the Public Utility Regulatory Policies Act of 1978 (PURPA). Our assistance included filing a motion with the Federal Energy Regulatory Commission to define both Heartland’s and our customer utilities’ roles regarding PURPA as well as assisting with the creation of policies should a qualifying renewable project arise in one of our customer communities.
  • Clean Power Plan: The Environmental Protection Agency published it’s final, controversial Clean Power Plan rule in the Federal Register October 23. That same day, a group of more than 20 states asked a federal court to strike it down, arguing the rule is “illegal and will have devastating impacts upon the states and their citizens.” Among the states challenging the rule were South Dakota, Nebraska, Kansas and Wyoming.