Understanding Peak Power
You're 60 years old. You and your wife have 4 children and 6 grandchildren. You're building a house and you've got to decide how many bedrooms and bathrooms you want. Your children and grandchildren live in North Carolina, Arizona, Vermont and south Texas. They only come home for Christmas and a few days in August. your wife wants a five bedroom house with a game room that the grandkids can bunk down in. These rooms wll be used 10 days out of the year. The other 355 days of the year, they go unused.
You could put your kids up in a local motel, so you go to all of the motels within 50 miles and find out that 9 times out of 10, during these peak times, there are no rooms available, and the few times they are available, they are priced out of reason.
You could tell your kids to come during non peak times, but they're all school teachers and have summer jobs and these times (Christmas and early August) are the only times they have off.
You could put them in the back yard in a tent if the weather would cooperate. Unfortunately at these peak times, for you to depend on the weather, well, it's just not plausible to sleep in a tent. The tent works better in the spring and fall.
How important is it to you that all the family gets together? Well, it's pretty important to your wife, and quite frankly, it's pretty important to you too. you've got a good job. You can afford the house, so you build it.
Associated Electric is 48 years old, Associated Electric has 6 children, (G&T's), 51 grandchildren, (cooperatives), and 850,000 great grandchildren, (member owners). They are building a house, and they've got to decide how many bedrooms (power plants) and bathrooms (environmental costs) they want. Their children, grandchildren and great grandchildren only come home (use extra electric power) during Christmas, cold winter days, and a few days in the heat of the summer (peak times). These extra rooms (power plants) will only be used a few days out of the year. over 350 days of the year, these rooms (power plants) go unused.
You could put the offspring up in a motel (buy power from other states - buy off the grid) so you go to all the motels within 1,000 miles and you find out that at peak times there are no rooms (power) available, and when it is available, it's priced way out of reason.
They could tell the offspring to use the extra power in the spring and fall (when the wind blows and other plants aren't being used). But, it's cold in the winter and hot in the summer and that will always be when the children, grandchildren and great grandchildren come home to use extra power.
They could build a lot of wind and solar power to cover these peak times. Unfortunately, 9 out of 10 times, wind and solar can't be counted on for the coldest and hottest days. You get more out of wind "tents" in the spring and fall.
How important is it to Associated to take care of the family on the peak days? Associated is not a motel (an Investor Owned Utility). A motel (IOU) only builds rooms if there is a profit in it. Associated's profits (capital credits) go back to the offspring. The offspring are the owners. This patriarch of owners (Associated) is going to take care of the children, grandchildren and great grandchildren's power needs at peak times because it's for their own, It's for the family.
Well, hopefully now you understand about peak power and hopefully you now understand the difference between a cooperative and an IOU.