Agency hoping for wet year, high power from Thurmond

Monday, April 29, 2013 12:16 PM
Last updated Tuesday, April 30, 2013 1:11 AM
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Higher lake levels could mean a smoother year for the federal agency that markets hydropower from Thurmond Lake and 21 other U.S. Army Corps of Engineers projects.

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(Emily Rose Bennett/Staff)  Power from the J. Strom Thurmond power plant is produced and sold by the Department of Energy's Southeastern Power Administration (SEPA). SEPA expects to spend $22 million less this year on alternative power purchases due in part to improved water conditions.     EMILY ROSE BENNETT/STAFF
EMILY ROSE BENNETT/STAFF
(Emily Rose Bennett/Staff) Power from the J. Strom Thurmond power plant is produced and sold by the Department of Energy's Southeastern Power Administration (SEPA). SEPA expects to spend $22 million less this year on alternative power purchases due in part to improved water conditions.

“We certainly hope it’s going to be better,” said Virgil Hobbs, the assistant administrator for finance and marketing for the Southeastern Power Administration.

That U.S. Department of Energy agency, based in Elberton, Ga., sells electricity to 491 customers – mostly rural electric cooperatives and small municipalities – in 10 states.

In wet years, contracts are easy to fulfill. During droughts, when falling water levels reduce production, the agency must purchase alternative power elsewhere to fulfill its contracts.

During fiscal year 2012, the agency spent $7.6 million in peak replacement energy. Those costs are expected to be much lower for the remainder of fiscal 2013 and into fiscal 2014.

“We would prefer not purchasing any off-system power and have our customers getting all the power from inflows and the river,” Hobbs said. “But we do purchase power because, with a drought, and working with the corps under their Drought Contingency Plan, we stay within the releases they provide us.”

The corps’ drought plan requires incrementally lower releases from dams as lake levels fall, which can reduce power production and shift the priorities for the available water.

Thurmond Lake, for example, has “authorized purposes” that include flood control, navigation, hydropower, recreation and fish and wildlife – in addition to providing drinking water and maintaining sufficient river flow to assimilate industrial and municipal wastewater.

As reservoir levels fall and releases are reduced, water supply and water quality rise to the top of the priority list.

Thurmond Lake has risen more than 10 feet since Jan. 1, and is currently at its highest levels in 18 months, with forecasts calling for continued recovery.

“It’s anybody’s guess what the weather is going to do, but if you look at trends, even if we have a bad water year in 2014, because of lower natural gas prices we would expect to spend less on alternate power,” he said.

Although 2012 was a significant drought year, the cost of replacement power was nowhere near the high of $41 million spent in 2008, the height of the most recent “drought of record.”

The hardships of low water that bring complaints from homeowners, recreation interests and real estate brokers also affect SEPA’s power customers.

“Through recent droughts, since October of 2005, federal hydropower customers have spent $282 million above and beyond their contract rates to support higher lake levels in the Savannah River Basin,” Hobbs said. “Hydropower customer interests are no different from recreation proponents, shoreline homeowners and environmental advocates. We all want to keep reservoir elevations high.”

HOW IT WORKS

• Electricity from the U.S. Army Corps of Engineers dams is marketed by the Southeastern Power Administration, an arm of the U.S. Department of Energy.

• SEPA, with revenues of more than $200 million a year, sells power to 491 utilities and electric cooperatives representing 13 million customers in 10 states.

• The proceeds are used to cover production and transmission costs, and to repay the U.S. Treasury for the costs, plus interest, of hydropower dams and lakes.

• During wet years, plenty of power is generated. During droughts, when low water reduces generation, SEPA must buy power elsewhere – often at higher prices – to fulfill its contracts.

• During normal-to-wet years, Thurmond Dam typically generates around 700,000 to 800,000 megawatt-hours, and around 300,000 MWH in drought years.

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