Connexus Energy CEO Ridderbusch on the co-op way of business

Connexus Energy, the cooperative electric company serving the northern metropolitan area, hired a new chief executive, Greg Ridderbusch, last October. He had been a vice president at Great River Energy, the wholesale power cooperative based in Maple Grove that is owned by Connexus and 27 other local cooperatives. Like all co-op executives, he leads a business that's owned by its customers. The traditional focus has been on delivering electricity in rural areas and suburbs. Connexus and other distribution co-ops don't own and operate big power plants. That job is left to their jointly owned Great River Energy. Yet some customers want local energy options, especially solar power. In 2014, Connexus responded by building the state's largest solar garden. Customers can voluntarily subscribe to a share of its output, offsetting their electric bills. Ridderbusch recently visited the Star Tribune to talk about Connexus.

Q: Tell us about Connexus Energy.

A: Connexus is the largest electric distribution cooperative in Minnesota, and the 15th-largest in the country. We serve about 130,000 members. We are growing about 1,000 accounts per year. We serve the northern suburbs, including portions of Anoka, Chisago, Isanti, Hennepin, Ramsey, Sherburne and Washington counties. We're an electric co-op only, and 91 percent of our membership is residential.

Q: Have the utility's rate of growth and customer electric use changed?

A: Growth rates remain depressed in the country, and ours is probably a quarter of what it was at the peak. Ten years ago, an average home used about 8 percent more electricity per month. How can that be? You can't buy an inefficient refrigerator anymore. You can't buy a 100-watt incandescent lamp anymore. Overall, technology has continued to make efficient use of electricity. Customers are using electricity much more efficiently.

Q: As the new CEO, are you taking Connexus in new directions?

A: Some of our members want new things. A theme that I think about daily is that our cooperative serves all members. Some want solar, electric vehicles and those kinds of things. We have to think about how to serve them but not cause others to pay or have reliability adversely affected. With our solar garden, we were able to do that in a way that allows customers who want solar to get solar and pay for it, but not impact customers who don't want to participate.

Q: How have customers responded to the opportunity to buy shares of the solar garden's output?

A: The solar array is completely sold out, but there is more to the story. When it came onstream in 2014, the original payment model was that you could buy a panel for $950 and get some offset against your electric bill. In the first year, we only sold about a third of it. Why is that? Not everyone chooses to spend that much to have a panel. This fall we had a new rate. If you want your home provided with 100 percent solar, you pay an upcharge per month; if you want half of your home, it's half that charge. Since we did that, we just sold out. It's pay as you go. You can choose to exit anytime you want.

Q: Connexus and other co-ops have long relied heavily on coal-generated power from North Dakota. What is the future of that?

A: The federal Clean Power Plan [to reduce greenhouse gas emissions] is being sorted out right now. Ninety percent of the coal-fired power in North Dakota is owned by co-ops. It remains the lowest-cost portion of Great River Energy's generation portfolio, but we know things are going to change. What we are being careful about is to keep the assets we have as competitive as possible while the regulatory and legal context clears up, and then make choices about what the next long-term investments are going to be. That is all a utility can do. If you have an existing investment, you just don't throw it away.

Q: How much rooftop solar are you seeing in Connexus' service area? And is there an issue with those customers not paying a fair share for the power grid that they still rely on?

A: Today we have 43 net-metered customers — very small in a population of 130,000 accounts. But we want to make sure that those who choose to put in their own generation resource don't push their costs on to other consumers who perhaps can less afford it. That's why there is a discussion going on statewide about how to deal with that from a fairness standpoint, and we're part of those discussions. The solar garden concept is maybe a better way of providing that option to a consumer. Scale really matters in generation.

Q: Do you envision other initiatives in conservation or renewable energy that Connexus will get into?

A: First, with all of the enthusiasm around solar, the conversation kind of drowns out the more economic resource in this region, which is wind. Wind is the least-expensive renewable energy source, still, but both have their place in a portfolio. The second thing is there are new tools that allow customers to be more active in managing their demand and energy use — Internet-based, Wi-Fi systems and home-management solutions on phones. There is an increasing segment — not a lot — that wants to do that. As energy resources become more expensive, having more options on demand response become really valuable to the overall market. Using new tools is something everyone is looking at. We are also.

dshaffer@startribune.com • 612-673-7090

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