The Power of Partnerships
Apr 13, 2021
Earlier this year, a significant winter storm swept across the United States causing widespread impacts. Several days of below-freezing temperatures and consistent snowfall caused so much stress to the electrical grid that millions were left without power. Through it all, the MKC energy department worked diligently to supply diesel fuel to keep the lights and heat on across the region.
Their efforts provided more than 5.7 million gallons of diesel fuel to be utilized for power generation to McPherson BPU in McPherson, Kan., and Evergy Inc. in Hutchinson and Colwich, Kan.
SETTING THE STANDARD
In early 2020, Scott Barkley, MKC director of energy operations, recognized an opportunity and was able to work with CHS to develop a model program for large utility and government entities. In the late summer and fall, MKC was able to establish a relationship with BPU and deliver several hundred thousand gallons of fuel. MKC received extremely positive feedback on the program and the cooperative's ability to deliver in a safe and efficient manner.
In preparation of the cold snap happening in February, BPU ordered 300,000 gallons to be delivered between February 10 and February 12. McPherson energy started delivering a hundred thousand gallons a day. That quickly escalated and on Friday, February 12, there was an order to deliver another one million gallons to BPU over the weekend. On Saturday, February 13, MKC received a call from Evergy. BPU had referred MKC because of the positive experience that they were having. Within five hours from that call, MKC was delivering 300,000 gallons to two Evergy locations in Hutchinson and Colwich.
DELIVERING ON PROMISES
The record-breaking low temperatures caused a high demand for natural gas and electricity to heat homes and businesses. The demand strained the available gas supply, while icy conditions limited wind generation. Fortunately, both BPU and Evergy facilities have dual fired units, which means they can generate with either natural gas or diesel fuel.
Over the course of 14 days in February, more than 25% of MKC’s annual volumes were sold and delivered. Barkley said none of this would have been possible without the help of the energy department team and truck drivers who stepped up to help.
“It is extremely important to acknowledge the amount of work that came together to make this a successful project and a significant growth opportunity for MKC,” Barkley says. “I’m not sure I have ever witnessed such hard work.”
Despite the freezing cold temperatures, MKC truck drivers went to work in the middle of the night to distribute the fuel safely, but they didn’t do it alone. With the help from Nate Hoskinson, owner of Double H Trucking LLC, and his team, they were able to pull off a near-impossible mission, hauling the millions of gallons of diesel fuel to three separate locations in a matter of seven days.
Consisting of 40 employees, the team worked 24 hours a day to ensure everyone had a warm home and lights on. On their busiest day, the team hauled more than 800,000 gallons of diesel fuel.
When the energy companies were in need, the solution seemed few and far between, but thanks to Hoskinson’s help, truckers came from all over the Midwest to help haul the fuel.
“They came from all over the state, worked incredible hours and did it all safely and without a single complaint during dangerous, dangerous conditions,” Barkley says. “These are the people who ultimately kept the lights on.”
Once the energy companies called upon MKC and Hoskinson, the team got straight to work in a very short period of time and without any warning.
Brett Beals, MKC refined fuels and lubrications dispatch manager, says “There wasn’t a lot of time to react to the demands, but within a day, Nate had a large number of trucks in the mix along with ours.”
In addition to the front-line crew, the MKC dispatch team ensured there was enough fuel to go around and no MKC customers experienced supply disruptions.
“All of the trucks were running to the energy providers nonstop, but we still had to keep our customers and our fuel sites going. It was a balance of trying to make sure nobody ran out,” Beals says.
The work didn’t stop there. The MKC billing team worked diligently to ensure a positive billing experience for Evergy and BPU. The billing team at MKC’s McPherson energy office had to process thousands of invoices and keep track of every bill of lading.
The team effort was possible thanks to the help from the men and women at CHS in McPherson and MKC administrators who ensured there were available gallons to haul. Employees in McPherson made sure the truckers could haul the fuel with ease, and the schedulers at the refinery diverted fuel into the tanks.
“When extreme situations happened, everyone stepped up to the plate at a time our communities needed us most,” Barkley says. “Everybody was an important piece to the puzzle, and without one of those pieces, the whole thing would have failed.”
COORDINATING THE PARTNERSHIP
From the perspective of Scott Barkley, MKC Director of Energy Operations
Tuesday, February 9: McPherson BPU requests 300,000 gallons to be delivered 2/10 – 2/12. With the cold pending forecast the following week, BPU wanted to be on the safe side of inventory. We were able to secure supply and trucks very quickly as the model had already been established.
Wednesday, February 10: Deliveries begin to BPU East Plant in McPherson at 100,000 gallons/day.
Thursday, February 11: The price of natural gas skyrockets from single digits per unit to greater than $100 per unit in Oklahoma. Natural gas curtailment discussions begin. The last time something similar happened this late in the winter was in 2014 and it drastically impacted the price of propane.
Friday, February 12: The natural gas price per unit trades north of $400 in Oklahoma and the natural gas curtailment becomes wide spread. McPherson BPU calls at 2 p.m. to request an additional one million gallons of supply at both the east and west McPherson plants over the weekend. We were able to again secure supply and trucks very quickly through established relationships.
Saturday, February 13: At 7:30 a.m. I received a call from Evergy, Inc in immediate need of up to 300,000 gallons of diesel between two power generation locations in Colwich and Hutchinson. My contact information was given to Evergy by BPU leadership because of the positive experience with MKC Energy. Double H trucking, MKC Energy dispatch, CHS Supply in Minnesota, CHS Refinery at McPherson scheduling and leadership at MKC are looped in to coordinate potential delivery of fuel for Evergy. The energy dispatch team at MKC has tankwagons delivering to Evergy in Hutchinson before noon, less than five hours from first contact.
Sunday, February 14: All local MKC energy drivers were called in to deliver as many loads as possible to Evergy in Hutchinson, while transport loads focus on McPherson and Colwich locations. We were again able to secure more transport trucks and drivers through Double H trucking and owner Nate Hoskinson. At this point, we were hauling 24 hours a day to four locations with 12 total trucks. MKC delivers nearly 750,000 gallons in 24 hours.
Monday, February 15: Extreme cold puts a strain on the power grid. Evergy’s Colwich plant goes down unexpectedly and is unable to restart. All MKC Energy efforts are focused on supplying the remaining three locations. Disruption to diesel supply would mean loss of power across large portions of central Kansas.
Tuesday, February 16: MKC drivers start the day at 2 a.m. to provide rest to Double H drivers going to Hutchinson. The SPP power grid remains dependent on MKC and supply of diesel for power generation. Evergy and McPherson BPU request that we continue to bring fuel 24 hours a day for possibly the remainder of the week. Supply increase is requested to CHS senior leadership who approves unprecedented increase in diesel allocation for MKC.
Wednesday, February 17: MKC drivers again start the day between 2 and 3 a.m. CHS agrees to dedicate one of the rack bay’s solely to MKC business during the peak of the day, something CHS has never done before. The CHS Refinery sets a single day all-time high volume moved through the rack in 24 hours.
Thursday, February 18: MKC and Double H drivers keep same 24 hour schedule. The CHS Refinery again sets single-day high-volume record in back-to-back days. MKC delivers 824,019 gallons in 24 hours.
February 19-24: Warming temps and falling natural gas prices lead to light at the end of the tunnel. MKC continued to deliver 10 hrs/day to McPherson BPU 2/22-2/24. MKC delivered to Evergy, Inc in Hutchinson for 10 hour on February 22.