As the LEC regroups from its most successful Annual Meeting ever, I wanted to take a few moments and briefly share my thoughts with you about both the meeting and the LEC’s plans going forward. I would also be remiss if I did not thank each of you for your thoughts prayers that were with me as I missed the Annual Meeting to attend to the death of my father.
The Annual Meeting highlighted the optimism that our industry feels. We had record attendance of 690 people, and actual attendance of more than 700 (after including guests). We also had a record number of booths—44—reminding us of one of the primary reasons we moved the Meeting over to the Bismarck Event Center.
We also tried something new this year when we opened our keynote event up to LEC member company employees. More than 50 LEC member employees took advantage of this offer to come and hear our keynote speaker, and I’m confident that their attendance improved the quality of the Annual Meeting.
Despite the optimism, our industry has real challenges. Markets have shifted away from rewarding the attributes possessed by lignite coal and now sometimes favor other fuel sources, both due to market and regulatory forces. When President Obama left office, an EPA that had coal in its sights left as well, but the market headwinds it helped create did not disappear overnight.
For the LEC, we have an engaged and dedicated Board of Directors and Management Committee that are committed to moving the LEC forward. Over the course of the past year, and culminating with the Board of Directors Meeting, we identified a series of priorities we believe will set the stage for future growth and success. In short, our focus can no longer be to simply resist the Clean Power Plan, it must be to look to new markets, new ideas and a more robust defense of how much lignite-based electricity truly brings to the table. Our Board highlighted 5 elements of this future focus:
- Market recognition for reliability and resilience attributes. The electric market may be a market, but it is not a free market, and is skewed and deformed by regulatory and environmental policies built years ago. These markets do not adequately compensate generators for all of the beneficial attributes we bring to the market—most importantly attributes like grid stability and resilience. This is not an easy fix—but it is a critical one that the LEC must respond to.
- Entering new markets and taking advantage of new technologies, such as electric vehicles, large-scale computing, rare earth mining, greenhouses and similar items. We need to recognize that we can’t be content simply selling electricity into the future the way we’ve always done…we need to capture and market all the benefits of what I call an “electricity +” model—requiring greater integration all along the timeline from concepts to commercialization with the goal being to lower marginal costs and enable our coal plants to be more competitive every day in the electricity markets.
- Continued pursuit of Research and Development Funding for commercialization. Both the federal Department of Energy and the State of North Dakota have been great R&D partners during the last few years, but to fully take advantage of that work we need to move on from smaller scale projects into the commercialization phase. With both federal and state money subject to increased—but worthwhile—scrutiny, we need to make our case clearly and forcefully through our Government Action program and with your help. Our story, when properly told, will demonstrate that the future of coal technology is in North Dakota.
- Enhanced tax policies. We’ve seen great strides during the past year, particularly with a victory on 45Q tax reform, potentially paving the way for more rapid deployment of carbon capture technologies. But many hurdles remain, and reflect the reality that traditional tax policies are not well-suited for regulated utilities and co-ops. Other policies, such as a tax policies supporting refined coal, are also needed for future growth and stability.
- Examination and continued education about siting options. North Dakota is the epicenter of the United States’ transition to energy dominance. In this rapidly changing world, we need to ensure that North Dakota’s regulatory policies are aligned with a pro-growth future for coal. We will continue to work with the state to ensure that siting policies protect our current investments while preserving the option for future growth and expansion—particularly when that future growth may come in non-traditional areas such as pipeline or co-location of industrial facilities.
These strategic initiatives will guide the work of the Lignite Energy Council and its staff and committees during the coming year and into the future. We will continue to discuss them with you all at future events and will report our progress in our year-end Annual Report.
Thank you for taking the time to read through our latest Member Update, as well as your attendance at the Annual Meeting. Although brief, I hope this update on our strategic direction helps fill in the gap that my absence from the Annual Meeting created, but if you ever have questions, comments or concerns please know that you can always reach me for further discussion at the Lignite Headquarters!
Jason Bohrer
President and CEO
Lignite Energy Council