Cimarron Electric continues rapid growth as it keeps pace with oil, gas activities in the STACK
KINGFISHER — Up until a few years ago, Cimarron Electric Cooperative was a typical rural power provider that distributed about 50 megawatts of power to about 13,300 locations spread across about 9,000 square miles.
Its members were people who were using electricity to power water wells, some homes and barns.
Then, the oil and gas industry began moving in, and everything changed.
"What I liken it to is taking a city about the size of Guthrie into the middle of nowhere, dropping it and saying, serve that load without any infrastructure already in place," explained Reed Emerson, the cooperative's senior vice president of operations and engineering.
Power delivery demands on the cooperative have been growing exponentially.
At the start of this year, for example, the demand load on its distribution system was 75 megawatts. This month, it was at 100 megawatts and Emerson forecasts that will climb to 125 megawatts by the end of this year.
"What's going on is pretty remarkable," he said.
Cimarron, however, isn't the first electric cooperative that's had to deal with explosive demand connected with a booming oil and gas economy.
And Emerson said he and Mark Snowden, the cooperative's chief executive, were advised years ago by an area operator to look at how other cooperatives had handled similar growth demands.
That sent them to North Dakota, where they visited with representatives of a cooperative that survived an onslaught of growing demand generated by the Bakken Shale boom.
They learned from those discussions and others that they needed to accelerate the cooperative's ability to meet the demand by moving the design and construction process largely from an office into the field.
"A lot of what we do today is based on what they learned through trial and error," Emerson said.
Snowden said the cooperative had 52 employees at the start of 2016, and had observed a historical annual growth rate of about 2 percent.
This month, the cooperative has an additional 200 employees working for it as contractors to build out distribution line and substations to serve well sites, midstream processing facilities and other businesses that already have moved in or plan to come to serve the oil and gas industry as it continues to develop the play, he said.
Emerson said the cooperative is using its experienced linemen as project managers who make first contact with location representatives and draw up initial designs for what's needed to serve a particular site.
Staking engineers (the cooperative has two on staff and 11 on contract) take the initial plans, refine them and then visit locations to physically mark out where the planned improvements need to be built.
Planned electrical loads are reviewed by an Oklahoma City-based engineering firm, and once those are approved, the cooperative sends the member a bill for its share of the construction costs the cooperative has to receive before work can begin.
Once that's happened, work to build out needed lines and to install additional substations begins.
"The turnaround time to get power established at a typical well location is about 60 days (from initial contact to construction completion), assuming the end user makes a timely payment on what its share of the costs are," Emerson said. "For larger projects, it takes longer.
"On the far west side of our territory, for example, there are seven different frack sand mining locations being built (two large, the rest smaller), and no transmission lines in that immediate area.
"That transmission line will need to be built into the area from two different directions in order to deliver power to substations that then can be delivered to those new operations. That will take miles of new line to establish, and it will take about a year to complete those projects."
Emerson said the cooperative holds twice-weekly meetings with its project managers to keep everything on track, and said it also meets regularly with the oil and gas operators.
"They give us as much information as they can ahead of time," he said. "We know their drilling schedules out through 2020, and that makes it a lot easier for us to ... formulate a plan."
Oil and gas operators, meanwhile, say they are appreciative of the efforts the cooperative has made to stay apace with the ongoing growth.
Reed Durfey, water and technical services manager for Newfield Exploration, manages the driller's water recycling facility in Kingfisher County and regularly works with the cooperative to ensure it meets Newfield's needs.
"We have been meeting with them for a couple of years and going over our development plan in the area," Durfey said.
"They have executed very well for us, and always had power on sites when we are ready to be hooked up and start flowing," he said.