Manager’s Message

Michael (Mike) Heise

President and Chief Executive Officer of Cloverland Electric Cooperative.

Celebrating Continual Innovation This Co-op Month

October is National Co-op Month when we celebrate the principles that make being part of a rural electric cooperative so unique. It’s an ideal time to inform our membership about all the innovation we’ve focused on over the past year. In addition to our steadfast mission to provide safe, reliable and affordable electricity, we’re always innovating. Continually working to make improvements to Cloverland’s infrastructure and seeking ways to conserve costs involves many exciting endeavors to ultimately benefit you – our 34,000 members across the Eastern Upper Peninsula (EUP). Here’s a summary of both new and ongoing initiatives:

BROADBAND ACTIVITY – As previously announced, Cloverland participated in the Rural Digital Opportunity Fund (RDOF) auction. The winner of RDOF funding in the Eastern Upper Peninsula is Atlantic Engineering Group (AEG) of Atlanta, GA. AEG is actively working with EUP entities to determine how they will roll out the program. We are working closely with AEG to support their installation needs. Cloverland is investigating the potential for ownership of our own fiberoptic system to advance our reliability and cybersecurity initiatives through direct communication with our substations. We are weighing the costs of ownership versus our current strategy of leasing from existing providers.

TARIFF REVIEW – Since acquiring Edison Sault Electric in 2010, Cloverland has maintained two rate books. To further unify our cooperative, we created a cross-functional team to review our tariffs and merge them as one rate book. This endeavor aligns well with a cost-of-service study planned for this fall. Co-ops typically conduct these studies every few years to assess how rates align with expenditures required to maintain reliable infrastructure. Cloverland’s last cost-of-service-study was completed in 2017. We aim to complete this study by the end of year, then assess results to update our rate structure in the first quarter of 2022.

ELECTRIC VEHICLE (EV) BATTERY CHARGING NETWORKS – Interest in deploying EV chargers across our service territory continues to rise. Since our current power supply contract penalizes us for demand, we do not have the ability to provide discounts and incentives at this time. However, we are connecting our members interested in EV chargers with the Michigan Department of Environment, Great Lakes and Energy (EGLE) to maximize their incentives. Our key accounts program is supporting members by connecting them with EV resources and helping them understand the technology so they can choose the right system for their needs. As part of our cost-of-service study, we will review the possibility of creating an EV rate.

INFRASTRUCTURE OPPORTUNITIES – Based on the increases in infrastructure grants for our country, Cloverland is working closely with our lobbying firm, as well as our member-partners in assessing what funding opportunities are available at the state and federal level to maximize the investment back into Cloverland’s system for repairs, efficiency and reliability.

HYDRO EFFICIENCY STUDY – Our hydro plant produces approximately one third of the power for our members. Despite periodic water flow restrictions set by the International Joint Commission and Corps of Engineers, we maximize the output of this historic facility to produce as many megawatt hours as possible. To ensure we are utilizing our hydro plant in the most efficient manner, we are conducting a study to examine its efficiency. Aside from clean energy, hydroelectricity has many benefits for our fuel mix – it saves us from having to purchase power at a much higher cost through our supply contract. The Corps of Engineers’ hydro facility produces approximately 20 percent of the energy for our system and combined with Cloverland’s hydro facility (approximately 30 percent), hydroelectricity covers nearly half of our energy supply for our EUP members.

POWER SUPPLY AND GENERATION – Midcontinent Independent System Operator (MISO) manages the power grid to ensure there is no collapse of infrastructure. Cloverland is a MISO participant meaning that the co-op pays MISO to manage the nodes where our power is delivered. In 2021, we have seen significant margin impact due to congestion at these nodes, so we are investigating a financial transmission rights concept to serve as an insurance program to alleviate variance in MISO bills through location marginal pricing (LMP) congestion pricing. Based on the supply (of generation) and demand for (load) electricity in each market, LMP is calculated in real time at thousands of market nodes. The LMP value is a calculated combination of the electricity price, congestion on the transmission grid and line losses.

MONTHLY DEMAND MITIGATION – Cloverland continues to investigate ways to lower our monthly demand as its impact is significant on our electric rates. To compound matters, during the summer months, Cloverland is required to pay a minimum threshold from a capacity standpoint as part of our long-term power supply agreement. For June, July and August, Cloverland is obligated to pay this minimum based on a formula rate. In essence, we are required to pay for capacity that we are not using due to our contract terms. We are working to reduce this annual burden as its impacts remain in effect through the end of our contract (2029).

SOLAR PROJECT – Public Utility Regulatory Policies Act (PURPA) is a federal act that allowed us to include Heritage Solar Farm (Pickford) on our system. Cloverland continues to fully implement this project as part of our energy portfolio and maximize its benefits.

As a member of a democratically controlled cooperative, you are welcome to voice your concerns and questions to your district’s directors. Our board meetings continue to be open to our members or you can voice your comments through our website: https://www.cloverland.com/about-us/board-of-directors/board-meetings/

I hope this summary informs you about the great work our 118 employees endeavor to do each day. We’re proud to serve the EUP and celebrate your membership with Cloverland during National Co-op Month and beyond!

Kind regards,
Michael (Mike) Heise

By The numbers