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LEPA wades through major electrical industry changes for 17 cities, now changes leadership

The electrical industry has seen radical change, and that change has also greatly impacted the Louisiana Energy and Power Authority (LEPA), a unique agent of 17 municipal electrical systems. LEPA is now undergoing another change as its long-time General Manager Cordell Grand retired on June 30, and Assistant General Manager Kevin Bihm takes the helm.

Reflecting on 35 years at LEPA and 18 of those years as General Manager, Grand said LEPA has worked through three major shifts in purchasing electrical energy supply during his tenure, and the last, to membership in the Midcontinent Independent System Operator (MISO) in December of 2013 was the most dramatic change in its history and has had continued implications.

Ultimately, the advantage of having a joint action agency with the buying power it represents and the expertise of the electrical specialists with LEPA has helped keep electrical costs stable for thousands of electrical customers of the 17 LEPA member municipalities. They include Winnfield, Natchitoches, Alexandria, Rayne, Welsh, Vinton, Lafayette, Minden, Jonesville, Vidalia, New Roads, Plaquemine, Kaplan, Abbeville, St. Martinville, Houma and Morgan City.

“When I started in accounting in 1984, everything was being recorded manually on huge ledger sheets. One of my first tasks was getting LEPA’s billing and accounting on computer, and developing the use of spreadsheets,” Grand said. “I actually had a hard time finding software that would handle the dollar values in the millions that we worked with.”

At that time energy was purchased point to point on a long-term contractual basis. “Cities bought one transmission path, and LEPA was the only agency to do that in the 1980s. Because of this we really started picking up member cities in the mid to late 1980s,” Grand said. “We were the agency that helped cities get power at fair rates across the state.” Grand was named accounting manager as LEPA’s membership and staff tripled during that time. 

A major shift occurred in 1989, when LEPA became a balancing authority and also took over operation of four municipal electric power plants. It was allowed to use multiple resources of energy going to multiple cities’ loads. Now it could shop price on an hourly basis, and also offered the efficiencies of centralized expertise in electrical plant operations. “Because of our size, it was easier for LEPA to get an expert to look at issues than it was for individual cities,” he said. LEPA could buy power from its plants and off the electrical grid and utilize transmission on a network basis, which gave it many more options to get economical power to its member cities and their customers.

In the 1990s, changes enabled independent power producers to have transmission rights in order to develop competition at the wholesale level. This brought new plants, and also a lot of price fluctuation and trading. “What actually happened was that we saw a lot of prices spike, and this resulted in turmoil because term contracts were impossible to get. Prices finally began to drop again in the 2000s,” Grand said.

The influx of new power plants due to the transmission rights resulted in another dramatic change for LEPA, as the old legacy municipal power plants were scarcely used as they could not produce power as efficiently or cheaply as the new power plants. By this time, for much of the year, LEPA could purchase power off the electrical grid much cheaper than running the old municipal plants. 

 “In 2009 we began to look at replacing those old plants with a new plant that we could utilize all year,” Grand said. By 2013, six LEPA member cities made the decision to build a new electrical plant in order to stabilize electrical costs and minimize the impact of fluctuations in the market. They included Morgan City, Plaquemine, Rayne, Houma, Jonesville and Vidalia. When LEPA’s first electrical plant went on line in April of 2016, it was the first power plant built in the southern region of Louisiana in some 40 years. It cost $120 million and is a high-efficiency natural gas-fired plant that sells power to the MISO grid. 

The end of 2013 marked the beginning of the biggest change in LEPA operations history, as Entergy and CLECO joined MISO and created MISO South. LEPA quickly joined in also because of the transmission options that MISO now controlled.

“This changed everything because before MISO, LEPA was the balancing authority for its member cities. When LEPA joined MISO, MISO became the balancing authority – we would sell power and buy power from MISO,” Grand said. “This was a huge change to LEPA’s business model, and radically changed our operations. LEPA truly became an agent for its member cities, helping to mitigate the risk of the daily electrical market and provide expertise that cities alone could not afford.” This change also led to LEPA terminating its operating agreements for the old plants in June of 2015. Operation of the plants were returned to the cities, and most shuttered the plants.

As Grand has guided LEPA through the years, Kevin Bihm took on ever increasing leadership roles, from being hired on as a resource planning engineer in 1996 to a role as support services manager from 1997 through 2001, and being named Assistant General Manager in December 2001, when Grand took over as General Manager. They have worked hand-in-hand for the last 18 years. The LEPA Board of Directors named Bihm as the new General Manager upon Grand’s retirement on June 30.

“It has been a pleasure working with a lot of good mayors and utility directors over the years,” Grand said. “They have made tough decisions and tried to do the right thing for their municipalities.”