By Joe Smyth | email@example.com | @joesmyth
The Poudre Valley Rural Electric Association board of directors is urging Tri-State Generation and Transmission Association to develop new policies to respond to a changing utility industry, and to study if adjusting its fuel mix could lower costs. In a resolution passed unanimously on September 19, the electric cooperative requested that Tri-State “work expeditiously in a transparent process to determine if significant cost savings are achievable by adjusting Tri-State’s fuel mix and provide the findings to Tri-State’s members by the end of calendar year 2018.”
Poudre Valley Rural Electric Association (PVREA) provides electricity to nearly 40,000 members in Larimer, Weld, and Boulder Counties, and this June was recognized as “Electric Cooperative Utility of the Year” by the Smart Electric Power Association for a community solar project that helped expand solar power opportunities for low and moderate income members.
PVREA is also Tri-State’s second largest member cooperative by electricity sales, and the resolution emphasizes PVREA’s partnership with Tri-State, noting that it helped form Tri-State and “has a vested interest in Tri-State to be successful."
Several of the other larger electric cooperatives that buy power from Tri-State are pursuing a variety of strategies in response to concerns about high power costs, policies that restrict local renewable energy development, and continued reliance on coal fired power plants. Members of Delta Montrose Electric Association will vote this month on changes that will provide co-op new financing options to end its contract with Tri-State. The Durango Herald reported last month on La Plata Electric Association's moves to consider purchasing power from sources other than Tri-State. And United Power CEO John Parker explained to Energy News Network that his co-op “is exploring alternatives to the G&T but is still far from making any decision on exiting." Combined, those four co-ops - United Power, La Plata Electric, Poudre Valley Electric, and Delta Montrose Electric - account for nearly one third of Tri-State’s electricity sales to member co-ops.
PVREA’s resolution references an August 2018 report from Rocky Mountain Institute, which found that Tri-State could save $600 million by shifting from coal to renewable energy. Tri-State responded to that report by highlighting that it is “currently soliciting for additional renewable energy supply, and has received more than 100 proposals totaling over 10,000 megawatts.”
An April 2018 report from Moody's Investors Service also showed that Tri-State's coal plants are more expensive than new renewable energy. Another Moody's report in May 2018 highlighted Tri-State as an example of those utilities with "high-quality renewable resources in their service territory," which "may enable these utilities to reduce rates for their customers where the price of new renewables undercuts that of existing coal."
But as it considers new renewable energy projects, Tri-State also recently increased its stake in a Wyoming coal plant it jointly owns with Basin Electric and other partners. According to a report filed with the Securities and Exchange Commission on September 20, Tri-State acquired Heartland Consumers Power District’s 3% stake in the Laramie River Station, boosting Tri-State’s ownership to 27.13%.
PVREA seeks new policies to support "member-side electric supply resources"
The PVREA resolution also "requests Tri-State to develop policies that work on providing member-side electric supply resources, so Poudre Valley can actively participate with retail members who opt to move to such resources. Further, Poudre Valley encourages Tri-State to consider partnering with their member systems on these opportunities to proactively adjust to changes within the industry."
One major example of those "changes within the industry" is Xcel Energy's deal with EVRAZ Rocky Mountain Steel for a 240 megawatt solar project at the steel mill's property in Pueblo, Colorado. The deal, by far the largest behind-the-meter solar project to date according to PV Magazine, was key to keeping the steel mill in Colorado.
Some Tri-State member co-ops have expressed concerns that high power costs could drive businesses to other regions. One way that co-ops could address those concerns is by partnering with their members to build low cost, on-site renewable energy projects - but as PVREA's resolution notes, that will require new Tri-State policies.
In a presentation at the Engage Energy Conference in Paonia Colorado last month, Guzman Energy President Chris Riley highlighted how declining renewable energy costs have shifted the economics for electric cooperatives and their members, especially major electricity users like commercial and industrial customers. Riley argues that there will be "intense pressure on distribution utilities to defect, or lose end users who now have a strong incentive to go behind the meter."
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