Press Release Chouteau

January 23, 2015 was an historic day for the Grand River Dam Authority as it officially broke ground on a new, 495 megawatt (MW) combined cycle gas plant. The event marked the first time in over 30 years that the Authority began construction on a new electric generation project, and took place at the Grand River Energy Center (GREC, formerly Coal Fired Complex) in the shadow of the last generation GRDA constructed, in the early 1980s. “This is a great day,” said GRDA Chief Executive Officer Dan Sullivan. “It’s nice weather, but even if there were a foot of snow on the ground, this would still be a great day.” It was great not only for GRDA, but also for the state of Oklahoma, added Sullivan. He told a crowd of approximately 300 guests at the groundbreaking ceremony that the day was really about the future of GRDA and its long-term commitment to serving its customers all across the state. Those customers (many who had representatives in attendance) include municipalities, electric cooperatives and industries in Oklahoma. Together, he said, they were very involved in helping GRDA get to this day. “I want to start by thanking our customers,” said Sullivan. “It’s because of the relationships with our customers that [GRDA] exists. You stood with us in the decision to build this facility and you’ve made a long-term commitment to GRDA.” Sullivan reminded the crowd that all of GRDA’s municipal customer communities, like Mannford, have signed long-term contracts with the Authority that will continue the partnerships through 2042. “We’re returning that long-term commitment by building this facility,” he said. The new unit, which will cost approximately $296 million to complete, will have the potential to be the most efficient combined cycle generator in the United States. GRDA is purchasing the unit from Mitsubishi Hitachi Power Systems Americas (MHPSA) and it will be constructed in Savannah, Georgia. While several of these models are in operation in Asia, GRDA’s will be the first MHPSA unit of this type in the western hemisphere. Of course, getting the unit from the idea phase to the point of ground breaking was a long process, as many other options were also weighed, researched and discussed. “Our committee reviewed numerous options by our GRDA staff and our consulting engineers,” GRDA Director Steve Spears told the crowd. Spears, the city manager in Cushing and longtime municipal customer representative on the GRDA Board, chaired the special ad hoc committee put in place several years ago to explore new generation options. “Let me assure you that every option was considered and fully vetted,” said Spears. “This new facility will burn Oklahoma natural gas and allow us to further diversity our resources. I consider this a win-win for our customers and the state of Oklahoma.” Unit 3 will produce electricity in two ways: natural gas will be used to fuel a combustion turbine-generator, and then heat from that process will be recaptured and used to produce steam to turn another steam turbine-generator. Because of this heat recovery process, it is expected to be a very efficient generation source. The facility’s potential was not lost on Oklahoma Secretary of Energy and Environment Michael Teague. In his address to the crowd, Teague said successful power generation really requires three things to be present: reliability, affordability and sustainability. “Oklahoma has the fifth cheapest electricity in our country right, now, because of the work that goes on, as a great example, right here at the Grand River Energy Center,” said Teague, adding that in order to balance all the successful power generation components, “ it takes a long term vision, it takes leadership and it takes a team.” GRDA Chairman Tom Kimball spoke highly of that team – the GRDA workforce – that operates and maintains the Authority’s facilities round-the-clock, 24/7/365. “You can call them associates, you can call them employees or you can call them staff, but when you call them, they respond,” said Kimball. He also thanked the customers for signing the long-term deals with GRDA, which in turn helped the Authority’s credit rating and made financing of the Unit 3 less expensive with better credit ratings. “We showed the rating agencies the strength of our customers; the people who had enough foresight to stand up and sign a 30-year contract with GRDA going forward,” said Kimball. “That is the kind of commitment it takes to make something like this happen.” Along with MHPSA, other major contractors/suppliers in the project will include Black & Veatch (owner’s engineer), Hitachi HVB (electrical equipment), Nooter/Eriksen (heat recover steam generator) TIC/Kiewit (construction) and Enable Midstream (natural gas pipeline). Unit 3 is expected to be operational by the spring of 2017. Headquartered in Vinita, GRDA is Oklahoma’s state-owned electric utility; fully funded by revenues from electric and water sales instead of taxes. GRDA’s low-cost, reliable power touches 75 of 77 counties in the state and serves as an important economic development engine for Oklahoma. At no cost to Oklahoma taxpayers, GRDA also manages 70,000 surface acres of lakes in the state, including Grand Lake, Lake Hudson and the W.R. Holway Reservoir. Today, GRDA’s 500 employees continue to produce the same “power for progress” that has benefited the state for 75 years. The efforts of Team GRDA facilitate over $450 million in economic activity in Oklahoma annually.