Note: this article summarizes the key developments over the last few years that led Tri-State to begin a transition away from its reliance on coal, and was first published as a contribution to Energy-Democracy.net
A growing number of electric cooperatives are caught between their members’ demands for more renewable energy and restrictive, long-term contracts with power providers that rely mostly on coal. Over the past few years, co-op directors, staff, and members in rural Colorado and New Mexico have pressed one major power provider, Tri-State Generation and Transmission Association, to replace its coal plants with clean energy, and allow co-ops to build more local renewable energy projects.
In early 2020, Tri-State announced that it would close its coal plants in Colorado and New Mexico, and add hundreds of megawatts of new wind and solar power projects. Co-ops continue to pursue opportunities for more local renewable energy projects and lower rates, by pressing for oversight by state regulators and exploring new partnerships. The controversies have raised challenging questions about the way generation and transmission associations are governed, the responsibilities that cooperatives have to their members, and how co-ops will navigate the transition underway in the power sector, from large centralized coal plants to distributed renewable energy.
Tri-State Generation and Transmission Association announced last month that it will close its coal plants in Colorado and New Mexico and build a gigawatt of new wind and solar projects, in a move that its CEO said will “transform Tri-State as a power supplier.” Tri-State CEO Duane Highley explained that replacing coal with renewable energy will reduce costs as well as carbon emissions, as the power supplier submits its plans to Colorado regulators this year.
Wind and solar prices “way, way below” two cents help accelerate coal retirements
At a press conference in the Denver State Capitol with Colorado Governor Jared Polis, Highley explained how the dramatic declines in renewable energy prices enable Tri-State to reduce costs by replacing coal plants with new wind and solar projects:
“This is what's amazing and why this is an exciting time for our business. We've seen the cost of renewables plummet. From the first renewable project we signed 10 years ago, we're seeing like an 85% reduction in the cost of solar energy. And because the wind and solar energy now comes in prices lower than the cost of generating with any fossil fuel, coal or gas, it provides us with an opportunity, if you want to call it a "green energy dividend," that those savings in energy costs can be used to help us accelerate the retirement of coal and pay for that accelerated retirement, without negative rate impacts.”
Highley’s comments confirmed what a variety of analysts have found over the last two years. A pair of reports by Moody’s Investors Service in 2018 found that “most municipal and G&T cooperative-owned coal power plants have operating costs greater than the all-in cost of renewables,” including Tri-State’s coal plants, and highlighted how “high quality renewable resources” in Tri-State’s and Basin Electric’s service territories “may enable these utilities to reduce rates for their customers where the price of new renewables undercuts that of existing coal.” A report by the Rocky Mountain Institute later that year found that Tri-State’s member co-ops could save hundreds of millions of dollars by replacing coal with renewable energy.
Tri-State did not provide pricing details about its new wind and solar projects, but Highley told Colorado legislators at an energy hearing last July that its previous request for proposals “resulted in costs well below two cents for both wind and solar, I mean well below, I mean way, way, below. Lower costs than what we can get at variable cost from operating any fossil fueled unit. So I'm expecting that to be the case again.”
Tri-State will build a gigawatt of new wind and solar, reaching 50% renewable by 2024
Tri-State announced 304 megawatts of new wind projects and 715 megawatts of new solar projects in Colorado and New Mexico. Tri-State said that by replacing coal plants with those new renewable projects, along with existing wind, solar, and hydroelectric projects, “by 2024, 50% of the energy our cooperative consumes will come from renewable resources.”
The new wind and solar projects that Tri-State announced will be built in the service territories of seven of Tri-State’s member co-ops, and two of the solar projects will be built at coal facilities that Tri-State will close.
In Eastern Colorado, Tri-State announced the 200 megawatt Niyol Wind project in Highline Electric service territory, along with the previously announced 104 megawatt Crossing Trails Wind project in K.C. Electric service territory.
In Southwest Colorado, Tri-State announced the 120 megawatt Coyote Gulch Solar project in La Plata Electric service territory, and the 110 megawatt Dolores Canyon Solar project in Empire Electric service territory. Tri-State also announced it would add another 40 megawatt solar array to the previously announced 100 megawatt Spanish Peaks Solar project in San Isabel Electric service territory in Southern Colorado.
Tri-State also announced the 145 megawatt Axial Basin Solar project on its Colowyo coal mine land in Northwest Colorado, as well as the 200 megawatt Escalante Solar project at the site of its Escalante coal plant in Eastern New Mexico.
Tri-State will close over half of its coal fleet
Tri-State announced that it would close its Escalante coal plant in Eastern New Mexico this year, and the larger Craig coal plant in Northwest Colorado by 2030. Along with the closure of the Nucla coal plant last year, those closures represent 1001 megawatts of coal capacity, or about 53% of the total 1884 megawatts of coal capacity that Tri-State owns.
The Colowyo coal mine, which supplies the Craig coal plant, will also close by 2030. Tri-State detailed the costs associated with the closures of its coal plants and mine in a filing with the Securities and Exchange Commission.
Tri-State did not announce any plans for its ownership interests in coal plants operated by other utilities, the Springerville coal plant in Arizona and the Laramie River coal plant in Wyoming.
While the full Craig coal plant will close by 2030, Unit 1 will close by 2025 as previously announced. Tri-State also said that it “is working with the other plant owners to determine the specific details for the retirement of Unit 2." Tri-State operates the Craig plant, but is a partial owner of Units 1 and 2 along with four other utilities, including some that have pressed for an earlier closure. The other owners include Xcel Energy, PacifiCorp, Platte River Power Authority, and Salt River Project, each of which has announced emissions reductions plans, accelerated closures of coal plants, or both.
Tri-State also said “we’re committing not to add more coal to our system,” and announced that it had formally canceled its efforts to expand the Holcomb coal plant in Kansas. That project had been effectively dead for years, and Tri-State acknowledged in 2017 that it was unlikely to move forward. The Wichita Eagle reported that Sunflower Electric, the utility which operates the existing Holcomb coal plant, said it had “supported Tri-State’s efforts to market the permit to other utilities” - but that no utilities were interested in purchasing the permits to build a new coal plant. At a meeting in 2017, a Tri-State director predicted as much, explaining that “the board has voted to get out of Holcomb. So there’s the possibility that we could sell it, but I don’t know who would want to buy it. I don’t think there’s going to be any coal plants built.”
Although no new coal plants were likely to be built, Tri-State’s commitment “not to add more coal to our system” also means that Tri-State won’t increase its ownership stake in existing coal plants, which it did as recently as 2018 when it boosted its share of the Laramie River coal plant in Wyoming.
Colorado regulators could seek more aggressive carbon emissions reductions
Tri-State said that its plan will achieve a “70% reduction in CO2 emissions associated with Colorado wholesale electric sales” by 2030, from 2005 levels. That approaches, but does not quite meet, the 80% cut in carbon emissions by 2030 that Colorado’s climate legislation urges for electric utilities.
Colorado regulators could seek more aggressive emissions reductions from Tri-State. At a January 22 Colorado Public Utilities Commission meeting, commissioners and staff discussed the process for Tri-State’s upcoming electric resource plan (ERP), and commission staff recommended:
“We suggest that a single scenario be required in Tri-State's rules for its initial ERP filing and following filings, and that would be to require an assessment of the costs and benefits of early retirements of utility owned resources and the acquisition of new utility resources, required to reduce the carbon dioxide emissions associated with the utility sales by 80% from 2005 levels by 2030.”
Commissioners unanimously approved that recommendation.
Tri-State did not say how much its system-wide emissions will be reduced under the plan. Colorado accounts for about two-thirds of Tri-State’s electricity sales to member co-ops.
Negotiations with La Plata Electric and United Power continue
While the clean energy announcement brings Tri-State closer to meeting Colorado and New Mexico’s climate and clean energy policies, it’s not yet clear what it will mean for the power supplier’s negotiations with some of its largest member co-ops. At the press conference, Highley said that “with this announcement, we are meeting the stated sustainability goals for every one of our member systems” and expressed hope that its member co-ops would consider staying with Tri-State.
United Power and La Plata Electric have requested that the Colorado Public Utilities Commission determine the price they would need to pay to end their contracts with Tri-State, as Delta Montrose Electric has done. In a press release responding to Tri-State’s announcement, La Plata Electric CEO Jessica Matlock said, “While Tri-State’s future goal will help meet our carbon reduction goal, we do not yet know what the costs of its plan will be to our members and what LPEA’s role will be for producing local, renewable energy into the future.”
At the press conference, Highley pointed to an upcoming option that Tri-State hopes will help address some its member co-ops’ concerns about Tri-State’s restrictions on local energy development:
“The work of our contract committee will be announced in April. And at that time we'll have a block of energy available for our members to bid to self-supply. To the extent that our members develop local renewable projects, it will take some pressure off the remaining development for Tri-State, but if you look at the total Responsible Energy Plan, by 2030, as we look at a goal of 90% reduction in carbon emissions in Colorado, it's going to involve the construction of thousands of megawatts of new renewables. So more than double what we're announcing today, yet to come.”
Crossposted from Energy and Policy Institute
United Power and La Plata Electric ask Colorado Public Utilities Commission to determine Tri-State exit fee
Two electric cooperatives filed formal complaints with the Colorado Public Utilities Commission this week, requesting that the Commission determine the price for them to buy out of their contracts with Tri-State Generation and Transmission Association. The disputes could have major implications for the coal-heavy power supplier, and reveal problems with the governance system of Tri-State and other generation and transmission associations, which sell wholesale power to hundreds of electric cooperatives across the United States.
The United Power and La Plata Electric Association requests’ to the Colorado PUC follow Delta-Montrose Electric Association’s successful effort to end its membership with Tri-State; all three member cooperatives have said that they want to build more local renewable energy than Tri-State allows and purchase cheaper wholesale power. Tri-State settled with Delta-Montrose Electric in July, after the Colorado PUC determined that it had jurisdiction to determine a fair exit fee, and Commissioner Frances Koncilja raised the possibility of public hearings to question Tri-State’s executives about the company’s conduct.
If United Power and La Plata Electric stop purchasing wholesale power from Tri-State, it would have a much larger impact on Tri-State than the departure of Delta-Montrose Electric. While Delta-Montrose accounts for 5% of Tri-State’s electricity sales to member co-ops, La Plata Electric accounts for 6% and United Power accounts for 15% – Tri-State’s largest member by far.
Colorado PUC ordered Tri-State to respond to the complaints, and set hearings for January 21 and 22, 2020.
Colorado Rural Electric Association spent electric cooperatives’ money supporting Republican politicians
The statewide association for electric cooperatives in Colorado describes its political spending as bipartisan and funded by voluntary donations, but a review of filings with the Colorado Secretary of State shows that it actually spent nearly a half million dollars last year in a failed effort to keep the Colorado state Senate in Republican hands. Some of that money came directly from electric cooperatives, not individual voluntary donations, which means the cooperatives’ customers funded a portion of the political spending.
The Colorado Rural Electric Association includes every electric cooperative in the state among its members, and it lobbies on state policy issues, as well as publishing a magazine that is distributed to co-op members and hosting events and trainings on energy issues, safety, and other topics.
But in recent years, the group has increased its spending on political campaigns, through its “Colorado Advocates for Rural Electrification” political action committee and a new independent expenditure committee it created last year.
A Colorado utility’s attempts to avoid oversight by state regulators appears to be backfiring.
At a Colorado Public Utilities Commission hearing this week, Commissioner Frances Koncilja said she has “some serious questions about whether or not Tri-State has been candid with us,” and reminded the attorneys for electric utilities that “everyone who appears before a tribunal has an obligation of candor to the tribunal.”
Note: this article was updated on October 9 to include Elizabeth Warren's plan to address co-op coal debt
As prices for new wind and solar projects continue to drop, renewable energy is booming across the United States, surpassing coal earlier this year for the first time ever. And most renewable energy projects are built in rural areas, harnessing abundant wind and solar resources. Yet the electric cooperatives that power most of rural America remain particularly reliant on coal - in part because of billions of dollars in debt on increasingly uneconomic coal plants.
Solving this coal debt problem in rural America is the focus of a new report by the Center for Rural Affairs, We Own It, and CURE (Clean Up the River Environment). Rural Electrification 2.0: The Transition to a Clean Energy Economy explores strategies that policymakers and electric cooperatives could pursue to restructure or eliminate debt that is currently tied up with uneconomic coal plants.
“Rural communities will be better positioned to realize energy independence once current debt on existing coal plant infrastructure is eliminated,” said Erik Hatlestad, energy democracy program director at CURE, and one of the authors of the report. “This, in addition to investments in clean energy and energy efficiency, would help electric cooperatives plan for the future and serve their members more effectively.”
Freeing electric cooperatives from coal debt has also been raised in the presidential primary race; Beto O'Rourke's climate plan includes increased financing through the Rural Utilities Service, while Jay Inslee has proposed debt relief for co-ops' stranded coal plants as part of a "Next-Generation Rural Electrification" plan.
Tri-State Generation and Transmission Association is considering becoming rate regulated by the Federal Energy Regulatory Commission (FERC), in order to limit the oversight of state regulators.
According to an issue brief that Tri-State circulated to member co-ops last week, "FERC regulation would pre-empt individual state rate regulation for generation rates, transmission rates, rate design, buyout disputes and all other rate related matters."
The issue brief shows that Tri-State believes it can choose its preferred regulator - and even claims that Tri-State could also simply remove itself from FERC regulation in the future if it wants to.
Poudre Valley Rural Electric Association (PVREA) announced today that its board of directors established a goal to provide 80% carbon-free energy to its members by 2030. PVREA's carbon free goal is the first by an electric cooperative that is consistent with new state climate legislation signed by Colorado Governor Jared Polis last week, which encourages "the development of clean energy plans that will require greenhouse gas emissions caused by Colorado retail electricity sales to decrease eighty percent by 2030."
“Establishing the ’80 by 30’ goal is our first step toward increased reliance on carbon-free energy sources,” said Jeff Wadsworth, president and chief executive officer of PVREA in a press release. “By setting this ambitious goal, we have the opportunity to proactively address Colorado’s evolving regulatory environment and manage costs associated with potential future regulatory requirements.”
Steve Szabo, one of the PVREA members who has urged the co-op to embrace clean energy, said: “I am elated that the PVREA board, CEO and staff are working toward a carbon free electric generation portfolio. The move forward will benefit our local economy and environment. Thank You PVREA!”
Guzman Energy proposal would finance retirement of Tri-State coal plants, add 1.2 gigawatts of new wind and solar power
Guzman Energy is proposing a deal that would help Tri-State Generation and Transmission Association meet Colorado and New Mexico's new clean energy policies, by replacing nearly half of Tri-State's remaining coal fleet with 1.2 gigawatts of new wind and solar power projects, along with a mix of energy storage and natural gas. Guzman Energy executives said that the proposal would also immediately lower costs for Tri-State, and could allow member co-ops to increase the amount of local renewable energy they can build.
“Rapidly changing economics, combined with new carbon reduction goals in states that include the majority of Tri-State’s members, mean there’s a lot at stake for those who own and are served by Tri-State," said Guzman Energy President Chris Riley in a press release. "We’ve put a proposal on the table that would help Tri-State and its members lower costs right now while simultaneously reaching compliance with new laws. We look forward to taking the proposal directly to Tri-State’s owners and facilitating an open and transparent dialogue.”
In an interview, Riley explained that the company had presented the deal to Tri-State executives, as well as to several Tri-State member co-ops. Riley said that while some member co-ops expressed support for the proposal, Tri-State executives indicated they did not plan to continue exploring the proposal until after rulemakings and implementation of the new climate legislation in Colorado and expanded renewable energy standard in New Mexico. That will likely take several months, and could increase costs as federal tax credits for wind and solar projects begin to expire. Guzman Energy executives hope instead that its proposal will be reviewed in parallel with the rulemakings, and decided to publicly announce the proposal so that it can be considered by Tri-State member co-ops and their members.
The Colorado Public Utilities Commission will now require Tri-State Generation and Transmission Association to submit its resource plan for Commission approval, a major shift that followed growing calls from Colorado communities and co-op members for more regulatory oversight of Tri-State, negotiations between new Tri-State CEO Duane Highley and the Colorado Energy Office, and an amendment to a bill that was passed on the final day of the Colorado legislature's 2019 session. Along with a separate climate bill that also passed the Colorado legislature last week, the changes mean that Tri-State will now be required to develop a plan to significantly reduce the carbon pollution of its coal-heavy energy mix.
The deal also came after the Colorado Public Utilities Commission (PUC) made clear early last week that it would begin using its existing authority to more closely regulate Tri-State's resource planning process, with or without new legislation.
By the end of last week, the Colorado legislature included an amendment to a bill reauthorizing the PUC (SB19-236), which states: "The Commission shall promulgate rules that require each wholesale electric cooperative to submit to the Commission an application for approval of an integrated or electric resource plan."
In a press release, new Tri-State CEO Duane Highley signaled support for the amendment:
"We appreciate the active engagement and understanding of Governor Polis and Colorado Energy Office Executive Director Toor, as well as the work of the legislative leadership, to ensure regulatory requirements support our vision and recognize the uniqueness of Tri-State’s cooperative model, the nature of our wholesale business and the values of our democratic self-governance."
In the same press release, Colorado Energy Office executive director Will Toor said:
“We appreciate the collaboration exhibited by Tri-State's leadership and new CEO Duane Highley on Senate Bill 236, and we look forward to continued engagement to advance the state's clean energy goals and ensure low long-term costs for their members."
Colorado communities and state Energy Office urge Public Utilities Commission oversight of Tri-State
The Colorado Energy Office and some municipalities are urging the Colorado Public Utilities Commission to oversee Tri-State Generation and Transmission Association's resource planning, as it does with investor-owned utilities in the state.
The Colorado Public Utilities Commission (PUC) is considering revisions to a wide array of its rulemaking processes, and hosted hearings this week and a public comment session today. Several organizations and individuals also submitted written comments to the PUC for the rulemaking review (docket 19R-0096E).
The Colorado Energy office submitted written comments to the PUC today, which argues that "reducing carbon emission in Colorado requires reducing emissions from all the state's public utilities and stronger Commission oversight of Tri-State is a key to meeting carbon reduction goals."
Two reports this month provide new details about the impacts of the high wholesale power costs that Tri-State Generation and Transmission Association charges electric cooperatives in Colorado, New Mexico, Wyoming and Nebraska.
One of the reports, “How Kit Carson Electric Engineered a Cost-Effective Coal Exit,” was published by the Institute for Energy Economics and Financial Analysis (IEEFA). It includes an overview of the history and reasons for the co-op's departure from Tri-State in 2016, such as interest in pursuing more local solar projects and frustration with Tri-State's increasing rates.
The IEEFA report also includes some key new information: the price that Kit Carson Electric Cooperative (KCEC) expects to pay for wholesale power from Guzman Energy over the next seven years.
A Tri-State Generation and Transmission Association executive has been involved since 2005 with the Utility Air Regulatory Group (UARG), the anti-Clean Air Act group that is the subject of a US congressional investigation, raising questions about the amount of money that Tri-State has contributed to the group over the last 14 years.
On Thursday, leaders of the US Congressional Committee on Energy and Commerce wrote to Tri-State and other utilities, requesting information and documents about the utilities' relationship with UARG, a secretive group that has played a key role in lawsuits aimed at rolling back Clean Air Act rules. Internal UARG documents obtained by Politico show that Tri-State contributed $167,418 to UARG in 2017.
In their April 11 letter, congressional investigators asked Tri-State to "Please explain how your substantial annual contributions to UARG are consistent with your obligations to ratepayers."
Congressional investigators are also seeking a variety of documents and information from Tri-State and other utilities by April 25, including "Membership and leadership nominations" and "Documents relating to the Policy Committee, including all documents relating to meetings thereof."
A bio of Barbara Walz, Tri-State's Senior Vice President of Policy and Compliance, shows that she has been a member of UARG's Policy Committee since 2005, and a member of UARG's Steering Committee since 2010.
Leaders of the US Congressional Committee on Energy and Commerce wrote to Tri-State Generation and Transmission Association and other electric utilities today, requesting information about the utilities' relationships with the Utility Air Regulatory Group (UARG), a secretive lobby group focused on rolling back Clean Air Act rules.
In the letter to Tri-State, Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Environment and Climate Change Subcommittee Chair Paul Tonko (D-NY) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) wrote, “UARG has avoided any transparency, with details of its funding and internal organization only recently revealed. Your company contributed $167,418 in 2017 to fund UARG's activities, with a higher contribution projected for 2018."
Because of Tri-State's funding of UARG and its legal challenges against Clean Air Act rules, the Energy and Commerce Committee leaders wrote to Tri-State to request information and documents as part of their investigation into UARG and its connections to senior US Environmental Protection Agency officials.
Electric cooperatives in Colorado and New Mexico have built a growing number of renewable energy projects over the last several years as prices declined, but new data show that local renewable energy growth stalled in 2018 among the 43 co-ops that buy power from Tri-State Generation and Transmission Association.
The stall in growth comes even as prices for solar projects have declined, and highlights the key role that Tri-State policies play on member co-ops. Some co-ops like United Power and La Plata Electric are restricted from pursuing more projects, because they reached the 5% limit that Tri-State imposes on local energy development. And Tri-State has also repeatedly changed the pricing for member co-ops' renewable energy projects in recent years under its Policy 115, in ways that have discouraged projects. In 2018, Tri-State also changed Policy 115 to include energy storage projects, which United Power said would cut in half the expected savings for its members from its 4 megawatt Tesla battery project. Overall, the recent policy changes show how Tri-State has moved to discourage its member co-ops from pursuing local solar and battery projects, just as those resources have become most economically attractive.
According to Tri-State's 2018 10-K, which was filed with the Securities and Exchange Commission last month, 21 member co-ops had contracted for a total of 139 megawatts of local energy projects by the end of 2018. That marked a decline from the 143 megawatts noted in Tri-State's 2017 10-K, a significant change after years of growth. Tri-State reported 113 megawatts of member co-ops' local energy projects in its 2016 10-K.
But Tri-State officials didn't mention the recent decline of its member co-ops' renewable energy projects during the first public meeting of its 2019 Integrated Resource Planning process last week, and instead described how "that number has really grown from when the first project came online about ten years ago."
Tri-State also didn't mention the decline in a recent filing with the Colorado Public Utilities Commission.
Last month, Tri-State Generation and Transmission Association began running its latest advertising campaign, which tells electric cooperatives they are "Better Together" with Tri-State.
But during one co-op board meeting, it became clear that Tri-State had not received permission to use the co-op's name and logo on the advertisements, and Mountain Parks Electric asked Tri-State to stop running ads that used the co-op's name.
Tri-State Generation and Transmission Association will hold its annual meeting during the first week of April, where member co-ops are expected to approve changes to Tri-State’s bylaws. But this year, members of the 43 electric cooperatives that buy power from Tri-State won’t be allowed to attend.
Emails from Tri-State’s CEO and board president provided inconsistent explanations for why members would not be allowed to attend the annual meeting.
In an email this week, Tri-State CEO Mike McInnes claimed that co-op members wouldn’t be allowed to attend “because of the growth we continue to have."
I am both sorry and thrilled that we are needing to start limiting the attendance at our Annual Meeting because of the growth that we continue to have. In the past, we were able to be more flexible with the attendance and as you mentioned, you were able to attend.
But an email from Tri-State Board President Rick Gordon to a Tri-State member co-op director made no mention of any space constraints, and instead bluntly stated “Our Annual Meeting is not a public meeting.”
The 43 electric cooperatives that buy power from Tri-State Generation and Transmission Association are likely to approve changes to Tri-State's bylaws that would allow for new types of contracts between the co-ops and the wholesale power provider. In advance of the expected official vote on the bylaws amendments during Tri-State's upcoming annual meeting on April 1-4, the co-ops showed support for the proposal at a special meeting Tri-State held on March 6.
In its 2018 10-K that was recently filed with the Securities and Exchange Commission, Tri-State said: "At a special meeting of our Members held in March 2019, our Members discussed the proposed amendments to the Bylaws and support such amendments."
Tri-State's 10-K also makes clear that the changes to the bylaws won't lead directly to new types of contracts, but instead would "permit our Board to establish such additional classes of membership and the rights and privileges of the members of those additional classes."
A copy of the proposed bylaw amendments also shows that they would allow, but not require, the Tri-State board of directors to create new membership classes. Those other membership classes are also not defined by the bylaw amendments.
A group of more than 20,000 family farmers in Colorado, New Mexico and Wyoming is calling on Tri-State Generation and Transmission Association to provide more flexibility for its member co-ops and to "re-tool its existing resource plan so it calls for investment in clean, affordable, reliable alternatives."
The resolution from Rocky Mountain Farmers Union notes that energy costs account for 7% of its members' expenses on average, and highlights how "dramatic changes in technology and market conditions have driven the cost of renewable energy generation sources well below carbon-based resources."
Rocky Mountain Farmers Union President Dale McCall called on Tri-State to reduce costs and respond to customers' demands, just as its members must:
“Farmers and ranchers work within razor thin margins to make ends meet. We have to think strategically to reduce our cost-of-production, be flexible in how we invest inputs and constantly react to the demands of our customers – we think our energy providers should do the same.”
Electric cooperatives in Colorado push for change at Tri-State Generation and Transmission Association
Electric cooperatives deliver power to 42 million Americans, and those local co-ops tend to be well known in the communities they serve. At a minimum, people know who they write a check to each month, and some co-op members get more involved with their co-ops by running for the board of directors, attending meetings, and working to ensure that co-ops are upholding their commitments to democratic control.
What’s less well known is that most electric cooperatives are themselves members of larger cooperatives, known as generation and transmission associations (or “G&Ts” within the industry). These generation and transmission associations own and operate large power plants and deliver that power to local electric cooperatives, which in turn distribute electricity to homes and businesses across the United States.
Generation and transmission associations aren’t often well known because they don’t show up on electric bills. But they can have a major impact on local electric cooperatives’ power supply, rates, and even a co-op’s ability to respond to its members concerns.
Map of generation and transmission associations by the National Rural Electric Cooperative Association
A wholesale power provider for 13 Colorado cities and towns generates most of its power from coal - but will that still be true in 2030?
That's one of the key the questions raised in a report published last month by Sustainable Development Strategies Group, "A Renewable Energy Future for Colorado Communities Served by the Municipal Energy Agency of Nebraska."
The report examines the Municipal Energy Agency of Nebraska (MEAN), which sells wholesale power to dozens of towns and cities in Nebraska, Wyoming, Iowa, and Colorado. Sustainable Development Strategies Group (SDSG), a non-profit research group based in Gunnison, Colorado, focused on the 13 municipalities in Colorado that buy power from MEAN. The report examines MEAN's power supply mix, policies, and contracts in the context of a transition to renewable energy.
One striking finding in the SDSG report: coal accounted for 61% of MEAN's resource mix in 2017, according to its 2017 Integrated Resource Plan (IRP). And in contrast to major power suppliers for other Colorado towns and cities like Platte River Power Authority and Xcel Energy, MEAN expects that coal will remain a large portion of its energy mix, and even increase slightly to 64% by 2030.
Tri-State Generation and Transmission Association has a new response for electric cooperatives that might be considering a different wholesale power provider: an advertising campaign that tells co-ops they are "better together" with Tri-State. But despite the message in the ads, Tri-State appears to have developed the ad campaign on its own, and is even placing the "better together" ads in the service territories of its members co-ops without explicit permission from the co-ops.
Tri-State launched its new ad campaign as one of its member co-ops is seeking to exit its contract with Tri-State in order to pursue more local renewable energy projects and lower rates, while other Tri-State member co-ops are also considering other power suppliers. Last month, the Colorado Public Utilities Commission ruled that it would determine the amount Delta-Montrose Electric must pay to leave Tri-State.
The discussion at one co-op's monthly board meeting suggests that Tri-State developed and placed the "better together" ads without the input of its member co-ops. At the Mountain Parks Electric monthly board meeting on February 14, Communications Manager Rob Taylor gave an update to the board of directors about Tri-State 's advertising campaign, so that the co-op could "discuss whether or not we want to use it."
"Tri-State has started a new advertising campaign, and the theme is called “Better Together” and we have to discuss to decide if it’s the messaging we want. Currently our local messaging on our commercials are energy efficiency themed. But they have some radio ads that I wanted to share with you just so you could hear what their new message is. And again we have not started using this, but we have to discuss whether or not we want to use it."
But after the Mountain Parks Electric board of directors listened to the Tri-State radio ad that ended with the message "Tri-State and Mountain Parks Electric. Brighter, stronger, better together," one board director said that he had heard the same ad on the radio that morning.
One of Colorado's largest electric cooperatives is concerned that it could face higher rates in the future from Tri-State Generation and Transmission Association, because the wholesale power provider isn't paying down over a billion dollars of its debt, even as costs increase for its aging coal plants.
In a letter to Tri-State CEO Mike McInnes, La Plata Electric Association CEO Mike Dreyspring raised concerns that Tri-State's debt could lead to increased future rates for the co-op and its members. In particular, the letter notes La Plata Electric's concerns about a portion of Tri-State's debt "for which Tri-State is receiving through rates principal and interest repayment, but is not applying the principal to reduce that debt."
Delta-Montrose Electric highlights "broad statewide support" from state legislators, industry trade associations, Colorado towns and cities, and advocacy organizations
The Colorado Public Utilities Commission (PUC) ruled on Thursday that it has jurisdiction to determine how much Delta-Montrose Electric should pay to end its contract with Tri-State Generation and Transmission Association. The PUC ruling is a boost to the electric cooperative's years-long efforts to pursue more local renewable energy projects and try to stabilize electric rates for its members.
Delta-Montrose Electric CEO Jasen Bronec said in a press release:
“This is a significant ruling and confirms that no wholesale electricity supplier—not even Tri-State—is above the law. Tri-State talks about its ‘core principle’ of ‘voluntary and open membership’ in public. But its legal filings say that the Tri-State board can stop members from exiting by setting abusive charges with zero oversight."
In a press release, Tri-State Board President Rick Gordon made clear that Tri-State would continue to push for the case to be heard in court, instead of at the PUC:
“The commission’s assertion of jurisdiction is unnecessary and unwarranted, but is not unexpected. A private contract dispute, even between utilities, does not belong at the commission. This matter appropriately belongs in the courts.”
Electric cooperatives have shifted their approach to renewable energy amid declining prices and growing public support, but wholesale power providers are key
Three electric cooperatives in Colorado have now set clean energy goals, reflecting co-ops' growing recognition of the opportunities presented by declining prices for renewable energy and increased public support for wind and solar power development.
The latest announcement came last week from Grand Valley Power, an electric cooperative that delivers electricity to more than 18,000 members mostly in Mesa County, Colorado. Grand Valley Power established a target of 60% clean energy by 2030, which the co-op described as "one of the most aggressive environmental targets of any electric cooperative in the nation."
In a press release, Grand Valley Power noted that the "announcement comes at a time when home- and business-owners are increasingly interested in having renewable energy and reducing carbon emissions." Grand Valley Power CEO Tom Walch said:
“With cost-effective advances in clean renewable energy technology, we’ll be able to meet this 60 percent target by 2030 while maintaining rate stability and our excellent reliability standards. This is one of the best ways we can deliver value to our consumers.”
Tri-State: Moving a cooperative power provider from coal to clean energy
Tri-State will replace coal plants with a gigawatt of new wind and solar
United Power and La Plata Electric ask Colorado Public Utilities Commission to determine Tri-State exit fee
Colorado Rural Electric Association spent electric cooperatives’ money supporting Republican politicians
Colorado Public Utilities Commissioner questions "whether or not Tri-State has been candid with us"
Rural America could power a renewable economy - but first we need to solve coal debt
Tri-State explores FERC rate regulation to limit state oversight
Poudre Valley Electric sets "80 by 2030" carbon free goal
Guzman Energy proposal would finance retirement of Tri-State coal plants, add 1.2 gigawatts of new wind and solar power
Colorado Public Utilities Commission will oversee Tri-State resource planning
Colorado communities and state Energy Office urge Public Utilities Commission oversight of Tri-State
Reports examine the impacts of Tri-State's high wholesale power costs
Tri-State executive involved with anti-Clean Air Act group since 2005
US Congressional Committee requests details of Tri-State funding to anti-Clean Air Act group
Renewable energy projects stalled in 2018 among Tri-State member co-ops
Second co-op asks Tri-State to pull “Better Together” ads
Tri-State won’t allow co-op members to attend annual meeting
Tri-State expects member co-ops to support bylaw changes at annual meeting
Rocky Mountain Farmers Union calls on Tri-State to adopt flexible contracts and more clean energy
Co-ops in Colorado push for change at Tri-State
Will Municipal Energy Agency of Nebraska remain reliant on coal?
Tri-State ad campaign tells co-ops they’re “better together”
La Plata Electric concerned Tri-State debt will lead to higher rates
Colorado Public Utilities Commission asserts jurisdiction over Tri-State
More Colorado co-ops announce clean energy goals
Ski industry climate change efforts shift to electric utilities and their regulators
Public Utilities Commission rejects Tri-State motion to exclude Colorado Energy Office from exit charge case
Tri-State claims that co-ops "have intervened on Tri-State's behalf at the PUC” don’t add up
Colorado state legislators urge Public Utilities Commission to determine Tri-State exit charge
United Power says Tri-State policies are turning away large customers
Next PUC Commissioner John Gavan "consensus choice" of Governors Hickenlooper and Polis
Tri-State policy change discourages battery projects in rural Colorado and New Mexico
Colorado Public Utilities Commission orders Tri-State to "satisfy or answer" exit charge complaint from Delta Montrose Electric
United Power seeks solutions to "increasingly outmoded G&T business models"
Clean Energy Means Business Summit highlights renewable energy opportunities and challenges in rural Colorado
Governor-elect Jared Polis says moving Colorado toward more renewable energy will be a top priority
Electric cooperative officials discuss cheap renewable energy and an “eroding monopoly”
Delta Montrose Electric members vote for new financing options, supporting a potential buyout of Tri-State contract
Poudre Valley Electric requests Tri-State policy changes and fuel mix study
Holy Cross Energy plans to shift away from coal, aiming for 70% renewable energy
What do corporate renewable energy commitments mean for electric utilities?
Colorado Energy Plan approval will mean new renewable energy investments in rural Colorado
Report: Tri-State could save $600 million by shifting from coal to renewable energy
Delta Montrose Electric seeks new financing options to end contract with Tri-State
Wind energy jobs in rural Colorado attract bipartisan support
Colorado Energy Plan analysis shows switching from coal to renewable energy will boost jobs and local tax revenue
Poudre Valley Electric and Xcel Energy Colorado President win national awards from Smart Electric Power Alliance
Latest coal plant subsidy proposal could hit electricity bills in the West
Moody’s report: “High quality renewable resources” could help Tri-State and Basin Electric navigate rising carbon transition risks
Senator Heinrich highlights “frustrations in New Mexico” with Tri-State’s limits on local solar
Moody’s report shows Tri-State’s coal plants are more expensive than new renewable energy
Tri-State’s limits on local energy development are a growing problem for co-op members
Governor Hickenlooper discusses Tri-State at the Climate Leadership Conference
Bids for Xcel’s Colorado Energy Plan include a proposal for the world’s largest battery
New wind and solar power in Colorado is now cheaper than existing coal plants
Companies' 100% renewable energy goals are getting results in Colorado
What does cheap solar mean for electric cooperatives?
Colorado towns and cities are helping push utilities to embrace renewable energy
How are electric cooperatives navigating the transition from coal to cheap clean energy?
Blocked from building more solar projects, United Power shifts to community batteries
Economic reality sets in for Tri-State efforts to expand the Holcomb coal plant
Solar projects in the works in Grand and Jackson counties
Mountain Parks Electric grapples with solar