Large Family-Owned Ranch

Challenge:

Due to its remote location, the local electric utility does not provide service at this time. Independent Energy Consultants was asked to determine whether there would be a more economical and reliable alternative for irrigation than using the current diesel generator (DG) sets. DG sets are diesel engines that drive a generator to produce electricity. The generator is then used to power electric motors that run their irrigation pumps.

Buying Group Description:

A large family-owned ranch grows crops in a remote arid region of the western U.S. In order to grow their crops they must constantly irrigate from a nearby river during the months of March through October.

Resolutions:

• Many solutions were considered, including an array of other distributed generation options, alternate fuel sources, and staying with the current system.
• If an electric line extension were to be made, the irrigation pumps would be powered from the utility and the DG sets would be used as emergency backup (if an interruptible rate were selected) or sold for salvage value.
• Since the rancher was the only customer requesting the line extension, he would pay the entire cost over a 15-year period. Our review of the utility tariff showed that any new customers tying into the extension in the first five years would share in the capital cost. None were known at the time and our conservative analysis assumed that none would be available to help defray the cost.
• The would be electric operating costs were then compared to the fuel and maintenance costs of running the DGs. The analysis also considered the efficiency and reliability of the two options.
• The family-owned ranch is expected to operate for many years to come, and the electric line extension project is likely to move forward.

• The decision was finally narrowed down to 2 choices. Stay with the DGs or build a substation and line extension and take electric service from the local utility.
• The ranch owner obtained all necessary siting permits and a preliminary cost estimate for building the 16-mile line extension.
• Independent Energy Consultants analyzed the rancher's electric consumption (energy, demand, power factor, load factor, time of use, power quality, etc.) and the local utility's rate structure.
• The optimal rate schedule from the local utility was identified and it was determined that a 7-year project payback was needed. In other words, in 7 years the electric bills paid to the utility would be sufficiently lower than the DG fuel and maintenance costs to overcome the capital cost of building the line extension.
• Finally, the utility company offers incentives to help finance solar panel projects in this area of the country. Independent Energy Consultants was asked to analyze the cost of that option in conjunction with the line extension. Our analysis showed that even with discounts on solar panels, there were many other lower-cost alternatives for self-generation of electricity.