After successfully delivering natural gas service to the communities of Deer Creek and Parkers Prairie last year, Lake Region Energy Services (LRES) will be growing its operation this spring. The plan is to expand off of the initial project and extend natural gas lines south of Parkers Prairie to the Miltona area and, in partnership with Greater Minnesota Transmission, extend south from the Viking pipeline east of Vergas to Dent.
“We believe this expansion will create a new revenue stream for Lake Region Electric Cooperative,” says LREC Board Chair Charles Kvare. “It will result in positive rate benefits for all electric cooperative members, no matter where they are geographically located, because the natural gas utility operations will be offsetting costs of the electric cooperative.”
Lake Region has gone from approximately $250,000 a year of non-operating income just over a decade ago to more than $1 million of non-operating income today. Embracing new and diverse revenue streams, like natural gas, helps provide members with more stable, lower electric rates.
As a subsidiary of Lake Region Electric Cooperative, LRES was formed in 2017 through a working partnership with Greater Minnesota Gas. As LREC CEO Tim Thompson explains, the cooperative decided to step into the natural gas business after observing other companies bringing natural gas into LREC’s service territory. “Strategically, we decided to take a proactive approach,” he says. “Natural gas is one of the lowest cost, cleanest burning fuels available and will be a primary national energy resource for a long time. We see this as an opportunity to grow the cooperative.”
While there are substantial front-end costs related to the project, LRES will serve as a significant long-term investment for Lake Region. The co-op’s ability to leverage existing capabilities and utilize current staff means operating and maintenance costs over time will be minimal. Thompson says having the support of the cooperative’s employees has been critical. “If we didn’t have highly motivated employees this would never work. It involves the entire organization and takes everyone’s willingness to support this effort,” he notes.
Community members have also been extremely supportive of their local utility bringing natural gas into the area. “Customers have been very positive so far. They like doing business with a local cooperative,” Thompson adds. “The feedback from large agricultural customers is that it’s been saving them a lot of money.”
Transmission construction on the expansion to Miltona and Dent will start at the beginning of May. The build out of distribution will occur after that, with gas flowing on the distribution lines by this August. LRES will again be working with NPL, the same contractor that worked on the Deer Creek and Parkers Prairie project.
“We are encouraging people along the existing and new projects to get started with the conversion process as soon as possible,” says Dan Husted, VP of Business Development at LREC. “Give us a call now to schedule a free site visit and learn more about the opportunity to save with natural gas.”