Western Farmers Electric Cooperative (WFEC) is a generation and transmission cooperative that provides essential electric service to 21 member cooperatives, Altus Air Force Base, and other power users. WFEC has been in existence for 75 years, and has grown into Oklahoma’s largest locally owned power supply system. WFEC was organized in 1941 when western Oklahoma rural electric distribution cooperatives found it necessary to secure an adequate power supply at rates farmers and rural industrial developers could afford.
On February 21, 1941, representatives of nine rural electric distribution cooperatives met in Oklahoma City to form a generation and transmission cooperative to be owned by the cooperatives it served. The incorporators provided for individual rural electric cooperatives to petition for membership. On April 25, 1941, the cooperative approved the membership of six cooperatives. These six members were joined by four other cooperatives later that year.
In April 1942, Anadarko was chosen as the location for WFEC’s headquarters. Thirty acres of land was purchased just outside the northeastern city limits. In cooperation with the government, the Board of Trustees shut down construction at the start of World War II, and released the newly acquired generators to be used in the war effort “to aid in the defense of our country.” When the war ended, WFEC added an eleventh member, and after construction was complete, WFEC started producing power in 1950.
During the Sixties:
Eight eastern Oklahoma rural electric distribution cooperatives joined WFEC in 1968, bringing the total number of member-owners to 19.
Also in 1968, another 125,000 kilowatt (kW) addition was completed at Mooreland. Sales and income continued to increase and rates remained stable. Power plants at Anadarko and Mooreland received high marks in the early 1970’s, based on operating efficiency.
Highlights from the Seventies:
As gas contracts expired, WFEC faced prices that were much higher than the original deals. A fuels division was created in 1974, and for the first time WFEC became involved in the production of natural gas. In 1975, Mooreland’s capacity was again boosted by 135,000 kW.
Due to inflation factors, the cost of generation in the mid-1970’s jumped from 8.66 mills per kilowatt-hour (kWh) to 13. For the first time, WFEC leaders began to explore coal and nuclear generation as alternatives. One bright spot during the turbulent 1970’s was the completion of the 300,000 kW combined cycle unit at Anadarko, which was 10 times the size of the original system. It was praised then as the most thermal efficient concept in the world.
By 1976, engineering studies began for a 400,000 kW coal-fired generating plant in eastern Oklahoma. At a news conference in October 1977, after considering 51 possible sites, it was announced that the coal plant would be built near Fort Towson, east of Hugo.
Also in 1976, WFEC entered into agreements with Public Service Company of Oklahoma and Associated Electric Cooperative of Springfield, Missouri to be part owner of the giant Black Fox nuclear facility to be built in northeast Oklahoma. Groundbreaking at the Black Fox location was hosted in August 1978. Site preparation work had been given the go-ahead and numerous permits had been received.
To control peak demands, a load management program was considered, following a survey in which members indicated that they were already practicing energy conservation.
Into the Eighties:
As the time approached for the Hugo Power Plant to come online in the early 1980’s, six miles of railroad was built into the coal yard, along with 330 rail cars being purchased. The Hugo Plant went commercial on April 1, 1982. While construction at Hugo moved ahead steadily, the Black Fox project was at a standstill, due to nationwide opposition to nuclear generation following the Three Mile Island accident. In February 1982, the three utility owners agreed to terminate Black Fox and withdrew licensing application, which had been pending since 1975.
In Anadarko, a four-story addition was added to the office facilities, with completion in 1980.
In the late 1980’s, a push began to sell surplus power. Cities, including Anadarko, Cordell, Ft. Supply, Lindsay, Mooreland and Anthony, Kan., Electra, Texas and Clarksville, Ark. began looking to WFEC for direct service.
On to the Nineties:
As WFEC approached the 1990’s, assets were in excess of $650 million, with a total generating capacity of 1,338 megawatts. Power was sent along some 3,200 miles of line to more than 220 substations. Employees totaled around 418.
In 2001, the planning phase for capacity studies was completed, with WFEC’s growth rate averaging in excess of 3 percent, calculating to approximately 35 megawatts (MW) a year.
GenCo Units 1 and 2 became operational in May 2001. The new 90 MW power plant is owned by WFEC EnergyCo, LLC.
A suite of Energy Management Services were added through the Marketing department to help in attracting new key account customers for member cooperatives. A push to increase energy efficiency was also promoted, with more than 76,000 compact fluorescent light (CFL) bulbs being given to all WFEC cooperatives for distribution to their own members.
In January 2003, WFEC became the first power supplier to sign a purchase power agreement (PPA) with a wind farm developer. This step would be the first of many into the wind farm development arena. The Blue Canyon Wind Farm, near Lawton, began commercial operation in December 2003, with a nameplate capacity of 74.25 megawatts.
A second PPA was signed in 2008 with Edison Mission Group for the purchase of wind energy from Buffalo Bear Wind Farm, an 18.9 MW facility in Northwest Oklahoma. In keeping up with trends, WFEC signed a third PPA with Acciona Energy for the purchase of wind energy from the Red Hills Wind Farm. This facility, which began commercial operation in June 2009, is located near Elk City, with a nameplate capacity of 123 MW.
Between the three purchases, WFEC had 216 MW of wind energy available, which marked close to 8 percent of WFEC’s fuel blend. However, WFEC currently does not retain or retire all of the environmental attributes from the facilities.
A long-term renewable energy purchase agreement signed in late September 2010 between WFEC and TradeWind Energy will boost WFEC’s wind energy MW total to 366 MW. This wind energy producing facility, a 150 MW site, was completed in June 2012. Named the Rocky Ridge Wind Project, this site is located between Hobart and Cordell, near the community of Rocky.
Currently, some 17 percent of WFEC’s total annual electricity production comes from power purchase agreements with wind farm generators in Oklahoma. However, WFEC currently does not retain or retire all of the environmental attributes from the facilities.
In May 2009, the WFEC headquarters’ site was struck by an EF2 tornado that caused widespread damage to numerous building structures, vehicles, transmission and substation structures, transmission and distribution maintenance buildings and the power plant. No one was injured by the destructive storm, as it hit around 9:30 p.m.
In August 2009, the new Bob Orme Combustion Turbine (CT) Units, located on the east grounds of WFEC’s Anadarko site, were completed. This capacity expansion project, used primarily for peak demand, provided an additional 145 MW of natural gas-fueled electricity generation. The new units are named after longtime WFEC employee Bob Orme, who was serving as the general manager of power production at the time of his death. Significantly, the Bob Orme CT Units represent the first new generation built that is solely owned and operated by WFEC since the Hugo Plant was completed in 1982.
In October 2010, WFEC had the unique opportunity to add four new cooperative members, all headquartered in New Mexico, bringing its total membership to 23. These cooperatives included Central Valley Electric (Artesia); Farmers’ Electric (Clovis); Lea County Electric (Lovington); and Roosevelt County (Portales).
They came to WFEC after learning their PPA agreements would not be extended with their existing power supplier. Together, these four had a total of approximately 400 MW of load. A representative of each cooperative was seated on WFEC’s Board of Trustees.
While much of the national economy continued in recessionary mode in 2011, WFEC member and municipal kWh sales grew some 5.8 percent, despite adverse drought conditions.
As 2012 brought more normalized temperatures, WFEC’s sales growth remained positive in a struggling U.S. economy. Oil and gas development within portions of WFEC’s service footprint presented members with unprecedented growth opportunities, spurring planning, construction and financing of additional infrastructure to meet these rural needs.
WFEC also experienced an optimistic year in 2013, with goals of keeping wholesale rates as low as possible; increasing equity; maintaining positive margins from electric operations; and meeting member load growth needs. WFEC budgeted over $90 million in capital projects, with the majority in the Transmission and Distribution area.
Also during 2013, WFEC spent considerable time working with the Southwest Power Pool (SPP), ACES, and its members in preparation for SPP’s Integrated Marketplace (IM) opening during the first quarter of 2014. Fuel delivery, contract issues in New Mexico, transmission rights, bid strategies, coordination with counter-parties and dozens of other issues were put in place in preparation for the market’s opening on March 1, 2014.
Generation resources remained adequate with a new 100 MW wind contract completed, along with a PPA for natural gas combined cycle generation, scheduled to begin delivery during 2014. Both the wind and power purchase contract positioned WFEC well for continued member growth for the near term.
WFEC’s top billing headlines for 2014 included the impacts of the eventful opening of SPP’s IM. New components of the IM included a day-ahead market, operating reserve markets, reliability unit commitments, transmission congestion rights and other key features. The new market consolidated the 16 different Balancing Authorities (BA) responsible for balancing load and resources into one SPP BA.
So, on March 1, 2014, one of the largest changes in the history of WFEC occurred as WFEC offered to sell all available resources into the SPP IM, as well as purchase all energy required for load commitments.
The first few months of the IM were challenging as all participants, including WFEC, worked to smooth out numerous speed bumps. The market opened during a significant cold spell and high natural gas prices. The initial sharp learning curve trended downward during the last few months of 2014 as the IM began to mature and stabilize.
The availability of gas and gas transportation were just a few of the dozens of issues identified and addressed with the new IM. With the change in BA responsibilities, the sale of certain gas pipeline assets to a third party was authorized in order to gain greater operational flexibility.
In 2014, total energy sales increased a significant 26 percent over 2013, comparing sales of 8.8 million MWh in 2013 with 11.1 million MWh sales in 2014. Increases in oil and natural gas production and infrastructure growth were among factors contributing to this increase and first sales obligation for New Mexico member cooperatives.
As a result of a much colder winter, along with Oklahoma growth, the coincident peak demand tipped the scale at 1,679 MW, establishing a new all-time peak demand on March 2, 2014. This was also the day after the SPP IM market opened, and did not include the load of New Mexico cooperatives.
On May 1, 2014, a milestone of the Transition Agreement with the New Mexico cooperatives was reached when third-party supplier contracts, cooperative-owned generation assets and a renewable energy purchase agreement (REPA) were assigned to WFEC. This generation asset that was declared commercial in February 2012 is located near Lovington, N.M., and consists of five gas-fired reciprocating engine and generator units. Each of the generators is capable of producing 9.3 MW of electricity, for a total of 46.5 MW. Plus, the REPA added the output from an approximate 24.9 MW nameplate rated Wildcat Wind Farm, near Lovington, N.M., to WFEC’s wind farm portfolio.
With the assumption of these contracts, generation assets and REPA, WFEC added the following to its generation resource and capacity mix: 383.0 MW contract capacity of SPS-Xcel blended assets; a 46.5 MW natural gas plant; and 24.9 MW contract capacity of Wildcat Wind Farm.
The U.S. Environmental Protection Agency (EPA) proposed new rules governing carbon dioxide emissions from existing power plants on June 2, 2014, in its proposed Clean Power Plan that created regulatory uncertainty for power generation.
Hugo Plant staff made significant progress towards compliance with the Mercury Air Toxic Rule (MATS), as the unit was scheduled to be in compliance within the required time frame.
In June 2014, an additional long-term natural gas combined cycle resource was placed in service when WFEC began purchasing 160 MW of capacity and energy through a long-term PPA, negotiated in 2012. The PPA provides escalating MW capacity levels and is available through 2035. This efficient generation resource adds excess capacity to cover projected increases in load and delays future generation requirements until approximately 2022.
WFEC’s portfolio of wind energy continued to expand as a result of energy purchase agreements with some 35 MW of energy contracted with four small wind farms in New Mexico, operational in 2014. These include Brahms BEP Wind I and II, near Grady, N.M. and Anderson Wind Project I and II, near Chaves County, N.M.
The 100 MW Balko Wind Project, near Balko, Okla., began commercial operation in 2015, as well as the 50 MW Grant Wind Project, in Grant County, Okla. in 2016. Once these projects were completed, WFEC’s wind energy PPAs totaled 575 MW, with some 19 to 21 percent of its total annual electricity production coming from wind generators in Oklahoma and New Mexico. WFEC does not retain or retire all of the environmental attributes of the energy generated by these facilities.
Diversity in fuel resources has long been a major goal for WFEC, as it plays a critical role with long-term reliability and cost. WFEC entered into a PPA with a solar power facility, near San Jon, N.M. in early 2015. This 25 MW project will be located south of Interstate 40, about 10 miles from the eastern New Mexico state line. Commercial operation is expected to begin by late 2016, with WFEC purchasing all of the output from this facility that should cover almost 200 acres.
Final steps were taken on Aug. 31, 2015 to complete the merger of WFEC GENCO, LLC (GenCo) with and into WFEC. Upon this merger, GenCo was dissolved and WFEC assumed the remaining GenCo rights, duties and obligations.
Also in August 2015, members of Caddo Electric Cooperative, located in Binger, and Kiwash Electric Cooperative, located in Cordell, overwhelmingly voted for the consolidation of their distribution cooperatives during their respective annual meetings. The consolidation between these two WFEC member cooperatives was made official on January 1, 2016 to form CKenergy Electric Cooperative.
In September 2015, WFEC trustees authorized the execution of a contract for multiple utility-scale solar generating projects, totaling 18 MW. With this contract, WFEC will own, operate and maintain each facility, which will each generate between 3 and 5 MW at five selected sites in Oklahoma. Locations include areas near Cyril, Fort Cobb, Hinton, Marietta and Tuttle.
As another part of WFEC’s solar investment, “community solar” projects are also being planned for the service areas of interested cooperatives. By late 2015, some 12 members had requested projects. Each venture will be .15 to .25 MW for a total of approximately 3.55 MW.
WFEC also began negotiations to include solar in its mix of resources located in New Mexico and entered a PPA purchasing energy from a 25 MW solar farm by the end of 2016.
WFEC's generating facilities are located at Mooreland, Anadarko and Hugo, Oklahoma and Lovington, New Mexico. WFEC has a total power capacity of more than 2,400 MW when purchased hydropower is included. The G&T owns and maintains more than 3,700 miles of transmission line to more than 330 sub and switch stations. Approximately 360 employees work at WFEC. Members consist of 21 distribution cooperatives, located in Oklahoma and New Mexico, in addition to portions of Texas and Kansas. WFEC also serves Altus Air Force Base.
WFEC has not only experienced substantial growth opportunities since its 1941 launch, but has also maintained a well-balanced and diversified portfolio of energy resources that includes owned facilities and capacity, in addition to energy provided through power purchase agreements. These resources reflect a mix of technologies and fuel types. The diversity in generation mix helps reduce exposure to changing market conditions, helping to keep rates competitive.
With adequate generation and transmission assets, sound financials, continued load growth and an excellent group of employees, WFEC is well positioned to meet future member needs.