Beth Fondell joins SMMPA as Chief Financial Officer

Beth A. Fondell joined Southern Minnesota Municipal Power Agency (SMMPA) on April 13 as the Director of Finance and Accounting & Chief Financial Officer. She replaces John Winter who is retiring from SMMPA after thirteen years with the Agency.

Prior to joining SMMPA, Fondell served as CFO and Director of Financial and Administrative Services at Owatonna Public Utilities (OPU) since 2011. In addition to overseeing all financial operations for the utility, she led the project to successfully replace the organization’s enterprise resource planning (ERP) system.

Prior to joining OPU, she served as Vice President of Finance and Facilities at Riverland Community College in Austin, MN and as Regional Audit Coordinator for Minnesota State Colleges and Universities.

Fondell holds a Bachelor of Science degree in Accounting and Business Administration from Minnesota State University – Mankato and is a Certified Public Accountant.

“We are delighted to welcome Beth to our team and thank John for his thirteen years of service to the Agency,” says SMMPA Chief Executive Officer Dave Geschwind. “Beth has an excellent background, a great understanding of the utility industry, and she knows our organization well. We look forward to her financial leadership in helping SMMPA and its municipal utility members meet the needs of their customers.”

SMMPA plans to be 80% carbon-free in 2030

Southern Minnesota Municipal Power Agency (SMMPA) today announced its plan to reshape its generation portfolio through the retirement of the Sherco 3 coal-fired power plant and replace it primarily with wind and solar generation. The plan would result in a 90% reduction in CO2 emissions from 2005 levels and 80% carbon-free energy on an annual basis in 2030. “We have a unique opportunity to reimagine SMMPA and are excited to take the Agency in this new direction,” said Dave Geschwind, Executive Director and CEO. “We will be taking our commitment to sustainability to a new level while maintaining our legacy of reliability and affordability.”

SMMPA currently owns 41% of the 900-megawatt Sherco 3 coal-fired generating unit located in Becker, Minnesota. Sherco 3’s majority owner, Xcel Energy, announced plans in 2019 to retire the plant in 2030. SMMPA expects all its outstanding debt on Sherco 3 will be paid off in 2027.

Natural gas and other non-coal fossil-fueled generation will continue to play an important role in maintaining reliability for SMMPA’s members. The Agency expects these facilities to provide a relatively small percentage of its energy needs on an annual basis, but to continue to facilitate the increase in intermittent renewable resources, like wind and solar, while maintaining reliability and affordability.

“SMMPA’s member communities support this strategic initiative to reduce carbon emissions,” said Joe Hoffman, SMMPA Board President and Preston Public Utilities general manager. “We are excited about capturing this opportunity to address important environmental objectives while maintaining an affordable energy supply.”

Geschwind cautions that there are still important decisions to be made. “While we are optimistic that technological breakthroughs are on the horizon, the cost of achieving the last 10-20% reduction in carbon emissions in the power sector is currently projected to be prohibitively high with today’s technology. We believe society will need to evaluate whether further reductions beyond 80% in this sector are the most economical and practical path to deep carbon reductions economy-wide.”

In outlining its strategic direction, SMMPA also highlighted the potential of beneficial electrification in applications like electric vehicles (EV) as well as energy efficiency to be important elements of meeting societal sustainability goals.

In November 2019, SMMPA announced plans to create an “EV Charging Network” connecting its member communities. SMMPA’s energy efficiency programs have been recognized four times with ENERGY STAR® Awards from the Environmental Protection Agency.

Geschwind says SMMPA will need the support of the member communities, elected officials and SMMPA staff to successfully implement the plan. He also urges policymakers to provide utilities with flexibility and to resist one-size-fits-all mandates where there is clear evidence the industry is already moving to meet public policy goals.

SMMPA understands this transformation will not happen overnight and will not be easy. Nonetheless, the Agency says it will strive to keep its rates competitive and limit wholesale rate increases to levels at or below the rate of inflation during the transition. As it launches this strategic initiative the Agency labels as “SMMPA 2.0”, it is adopting a new logo and tag line - “Your Partner for a Bright Energy Future.”

“We are proud of our past and honor the successes achieved by SMMPA for the forty years we’ve been in existence,” said Geschwind. “We are building on that legacy but also recognize this is a turning point for our organization. The new logo and tag line capture that spirit and our excitement as we begin this new strategic journey.” To learn more about SMMPA’s strategic initiative, please see www.smmpa.com/SMMPA2.0.

SMMPA Begins Taking Energy from 100 megawatt Stoneray Wind Project

On January 1, Southern Minnesota Municipal Power Agency (SMMPA) began taking energy from the 100-megawatt Stoneray Wind Project under a contract with EDF Renewable Energy (EDF.)  The project consists of 39 wind turbines manufactured by Siemens Gamesa and is located in Pipestone and Murray counties in Southwestern Minnesota.

The wind farm began commercial operation in December of 2018.  EDF has been selling the energy to others until January 1, when SMMPA began taking delivery under the 20-year term of the agreement.  

The Stoneray project, combined with the 100.5 MW Wapsipinicon Wind project and eight megawatts of SMMPA-owned wind turbines, will increase SMMPA’s wind generation portfolio to over 200 megawatts.  With the 5-megawatt Lemond Solar Center and other biomass/biogas generation, SMMPA is positioned to meet the requirements of Minnesota’s renewable energy standard for the foreseeable future.

“We are happy to take this next step in increasing our renewable energy portfolio and creating a brighter energy future for our member communities”, said Dave Geschwind, SMMPA’s Executive Director and CEO. 

SMMPA named an Honoree in Healthiest Employers of Minnesota

Southern Minnesota Municipal Power Agency has been recognized as one of the 2019 honorees of the Healthiest Employers of Minnesota, a nationally recognized awards program powered by the Springbuk Health Intelligence Platform.

Applicants to the Healthiest Employers® awards program were evaluated across six key categories, representing a holistic view of employee wellbeing: Culture and Leadership Commitment, Foundational Components, Strategic Planning, Communication and Marketing, Programming and Interventions, and Reporting and Analytics.

All companies who applied to the awards program were ranked according to the proprietary Healthiest Employers® Index, a 1-100 rubric for employee wellbeing programming.  The winners are ranked according to three different employee size categories: Under 500, 500-5,000, and 5,000+ employees. 

Southern Minnesota Municipal Power Agency, which ranked #5 among companies under 500 employees, was honored for their commitment to employee health and corporate health programming. The Agency has demonstrated a strong commitment to the health and wellbeing of their team members, and as one example, every May they celebrate Health and Fitness month in May by encouraging biometric screenings, nutritional seminars, stress management sessions, massages, and financial assistance resources.

“We congratulate Southern Minnesota Municipal Power Agency for their efforts to make workplace health a top priority for their organization and their team members. Each year, it’s our privilege at Springbuk to recognize the best of the best in corporate health through the Healthiest Employers® awards program. Across the nation, we’re encouraged by the tremendous efforts of corporate health leaders proactively investing in the wellbeing of their employee population,” said Rod Reasen, Co-founder and CEO of Springbuk.

SMMPA Members Commit to Electric Vehicle Charging Network

Southern Minnesota Municipal Power Agency’s (SMMPA) member municipal utilities have committed to establishing an electric vehicle (EV) charging network to help facilitate the transition to EVs in Greater Minnesota. Participating members will be installing a DC Fast Charger and two dual-port level 2 chargers in each of their communities by the end of 2020.

“It’s a great opportunity and an important first step to facilitate acceptance of electric vehicles, an amazing technology that will transform both the electric utility and transportation industries,” says Chris Schoenherr, SMMPA’s Director of Agency and Government Relations and Chief External Affairs Officer.

Since 90 percent of EV charging typically occurs in the owner’s garage at night, when electric demand is low, Schoenherr says utilities can generally handle that load without additional generation. However, the lack of public charging stations in most communities is a major barrier to consumers making the switch because of “range anxiety” – the fear they may not be able to reach distant destinations.

“Regardless of whether you are a small or large community, there is strength in numbers that creates economies of scale and sends a consistent message to our customers,” says Joe Hoffman, SMMPA Board President and Preston Public Utilities General Manager. “As a board, we felt it was critical to move forward together on this key initiative that will help our communities.”

SMMPA is partnering with ZEF Energy, the largest independently owned and operated DC Fast Charging Network in Minnesota and Wisconsin. SMMPA will purchase the chargers from ZEF Energy and transfer ownership to its member utilities. SMMPA will cover the cost of maintenance.

ZEF Energy was selected by the Minnesota Pollution Control Agency to install charging stations as part of the Volkswagen settlement. With SMMPA working on a similar timeline, ZEF Energy was able to leverage its expertise and purchasing power to create a package that was viable for SMMPA members.

“SMMPA is taking a market-leading approach,” says Matthew Blackler, CEO of ZEF Energy. “It is removing a major barrier to EV ownership by making charging and cross-state travel as convenient and accessible as possible.”

The DC Fast Chargers provide EV owners with a quick charge when they are traveling longer distances. The Level 2 chargers provide a charging option for EV owners while they are shopping, dining at a restaurant or conducting other business in town.

SMMPA member utilities are currently identifying potential sites for the chargers. Businesses that are interested in potentially being a site host for one of the chargers should contact their local SMMPA member utility.

Schoenherr expects it will take some time before the chargers are being fully utilized.

“In the utility business, we think long-term. A transformation begins with one step, and we are taking our first step today.”

Agency completes $26 million bond issuance, secures rating upgrade from Fitch

Southern Minnesota Municipal Power Agency (SMMPA) completed a $26 million issuance on October 8, 2019, putting in place long-term financing for the Agency’s investment in the Badger-Coulee transmission line, which was energized in December of 2018. The 161-mile, 345-kilovolt transmission line from the Briggs Road Substation north of La Crosse, WI to northern Dane County near Madison, WI addresses electric system reliability issues locally and in the Midwest, providing economic savings and supports renewable energy policy.  SMMPA was able to invest in the line based on its earlier participation in the broader CapX2020 initiative to expand transmission infrastructure in the upper Midwest.

The recent $26 million financing marks the first time SMMPA utilized project financing, allowing SMMPA members Austin and Rochester to continue project participation in the transmission line post 2030 when their current power supply agreements expire.

As part of the bond issuance process, SMMPA met with the various rating agencies.  Fitch Ratings upgraded SMMPA’s power supply system revenue bonds to ‘AA-’  from ‘A+’ in September based on the Agency’s strong financial profile. The outlook for the rating is ‘Stable’. SMMPA is now one of only five joint action agencies to have this rating from Fitch. S&P and Moody’s affirmed their current ratings of A+ and A1, respectively.

Based on SMMPA’s strong financial position, the Agency was able to put the long-term Badger-Coulee financing in place at an all-in true interest rate of 2.2%, the lowest rate in SMMPA’s history.