We conclude our story of Pick Sloan power with how it is generated and marketed through the efforts of three federal agencies. Development of Pick Sloan hydropower fell to both the COE and USBR. Until 1977, USBR was responsible for marketing and distributing the hydropower. Power marketing responsibilities were transferred to the Western Area Power Administration (WAPA) in 1977 when the Department of Energy (DOE) was formed.
The hydropower capacity developed in the Pick-Sloan Program has far exceeded the capacity envisioned in 1944. The planned capacity at that time was about 718 MW. The capacity developed to date is 2991 MW. In addition, WAPA operates over 9,000 miles of high voltage transmission jointly owned by Basin Electric Power Cooperative, WAPA, and Heartland.
Pick Sloan power sales are governed by federal legislation and regulation. Pick Sloan power is used for irrigation project-use pumping power, preference (firm) power, and non-firm power.
The first priority for power produced by the Pick Sloan Program is for authorized irrigation projects, referred to as project-use power. It is used for pumping water from a river or a ditch for gravity flow to irrigated land. Project-use power is not used for on-farm irrigation. USBR administers contracts for this power with locally created irrigation districts to provide this power.
The next priority for Pick Sloan Program power is sold as preference power. WAPA’s preference customers are public power districts, rural electric cooperatives, municipalities, irrigation districts, municipal, rural, and industrial water systems, Native American tribes, and Federal and state agencies. About 400 preference customers receive Pick Sloan power. Heartland is among those customers.
The last priority is surplus non-firm power, which is marketed by WAPA. This is generally surplus power beyond what WAPA has contractual commitments for. It is normally sold at spot market rates.
Repayment rates for power and transmission are established by WAPA. The rates must collect all of the revenue required to recover annual expenses (such as O, M&R, purchased power, transmission service expenses, interest, and deferred expenses), repay the Federal investment in power facilities and other assigned costs.
Another expense WAPA must recover is purchased power. Purchased power is power that WAPA buys when it does not have enough power from generation to meet contractual obligations. Purchases may be made due to operational constraints such as navigation, management of endangered species, or water quality. Purchased power is also acquired because of any ongoing drought.
A cornerstone of the federal power program is the preference principle, which gives rural electric cooperatives, municipal electric utilities, public power districts and other public bodies first right to purchase the power generated at federal multipurpose projects. More than 30 federal laws going back to the beginning of the early 20th century, ensures that these public resources will go to consumers of nonprofit utilities such as Heartland. This preference principle and the cost-based rates of federal power provide a valuable yardstick in the electric utility industry that helps to assure low-cost power for all consumers.
The benefits of the Pick Sloan Program have been enormous and are ongoing. Flood control, irrigation, power, water, recreation, navigation, and other benefits since the creation of the program in the 1944 Flood Control Act total in the billions of dollars and they increase every year in the states of the mighty Missouri River Basin.