To Our Stakeholders.
Reflecting on 2024 and Onward.

As we reflect on 2024, we recognize SMMPA is on the front end of changes coming to the energy industry. The industry we see looking ahead is not the same as the one we live in today. Change is inevitable, and as we take part in this energy transition towards renewable resources, we thank our stakeholders for continuing to support our transition efforts.

REFLECTING ON 2024

In 2024, SMMPA was involved in projects that highlighted our generation and transmission efforts. Some continue to move into 2025 as we look to make key updates and investments.

Transmission Projects

We continue to negotiate our involvement and potential investment in the Midcontinent Independent System Operator (MISO)’s Tranche 1 projects specific to Southeast Minnesota. The investment return on new transmission projects will benefit our member utilities and their customers through reduced rates. We expect to finalize our participation in these projects in the next year.

City of Austin Extension

In July, the City of Austin extended its power sales contract with SMMPA to 2050. This decision followed results from Austin Utilities’ third-party analysis of its future power supply options — both the Austin Utilities Commission and the Austin City Council voted unanimously to extend the agreement with the Agency. Austin’s contract extension is beneficial to all our members.

City of Saint Peter Solar Project

The City of Saint Peter worked closely with SMMPA to develop a 72-kW solar project at the city’s wastewater treatment facility. This unique partnership allows SMMPA to own and lease back the facility to Saint Peter. The Agency was able to use in-house expertise to coordinate the development of the project and provide funding without passing on costs to other members. We are proud to help Saint Peter meet their local sustainability goals through this project.

New Generation Resources

The Agency is exploring additional resources for our generation portfolio. The first is in Owatonna, where we are working to add the next round of dispatchable generation resources to our fleet. This new power plant — a natural gas-fired combustion turbine plant — will be named Steele Energy Station, reflecting the county name. Over the past year, our Board gave SMMPA the authority to begin developing this generation resource, and we are in the process of obtaining an air permit.

Our long-standing Quick Start generation program supports our members’ desire to own local generation for their communities. This aids local reliability in the event of severe weather conditions such as an ice storm or another event that could impact transmission lines and helps the Agency meet capacity requirements. New quick-start generation is part of our most recent Integrated Resource Plan, and we are in the process of revising the program for Board approval.

Our Team

In 2024 we celebrated both key retirements and welcomed new additions to our team. We are grateful for the dedication of our long-term staff and wish them the best: Pete Reinarts (Manager of Agency & Member Generation), Rick Schacht (Manager of Substation IT), and Mark Mitchell (Director of Operations & Chief Operating Officer).

SMMPA was thrilled to bring new talent to our team with Eric Atkinson (Metering, SCADA & Communications Associate Engineer), Ryan Deering (Supervisor of Agency-Operated Generation), Shawn Timbers (NERC Regulatory Compliance Programs Manager), Jared Johnson (Power Plant Operator – FES), Josh Shones (Senior Engineer), and Jeremy Sutton (Director of Operations & Chief Operating Officer).

Financial Strength

Financially, 2024 proved a good year for the Agency. We maintained strong bond ratings with both Moody’s Ratings and Fitch Ratings reviewing and affirming our current ratings of A1 and AA-, respectively. Our outlook was assessed as “stable” by both entities, with sound revenues and the creditworthiness of our members listed among our credit strengths. 

Our relatively new Energy Cost Adjustment (ECA), first introduced in 2023, continues to lower financial risks from certain energy-related costs faced by the Agency.  However, we acknowledge the ECA billing to our members was higher than we anticipated in 2024, primarily due to the combination of maintenance work on the Sherco 3 coal-steam plant and lower margins from generation resources. Members without a mechanism to pass on these cost variances to their customers absorbed them through their own reserves, whereas the Agency would have done so in the past.

Celebrating Success

SMMPA is proud to be the recipient of four major awards in 2024:

·        Energy STAR’s 2024 Partner of the Year Award

·        Governor’s Workplace Safety Award

·        American Public Power Association’s (APPA’s) Safety Award of Excellence

·        Best Places to Work Award (2 years in a row)

Looking Ahead

In 2025, SMMPA will be full speed ahead on generation resource development and transmission expansion to reflect our reliability obligations and to prepare for the future. The Agency, like the industry, is participating in the “energy transition” as we balance dispatchable resources with renewable resources such as wind and solar.

We are planning for the eventual implementation of Minnesota’s Carbon Free Energy Law, or the 2040 Law, and meeting benchmarks for carbon-free and renewable resources as we move to 100% carbon free energy by 2040. We are also guided by reliability obligations set by MISO to ensure sufficient generation capacity to meet our planning reserve requirements.  Planning for both our energy and capacity obligations is very much an ongoing process, and we look forward to working with our members to explore and secure new opportunities and solutions.