“When you have a co-op that’s willing to step up and invest in their own generation, and particularly clean generation, that should be supported.”
New Mexico Senator Martin Heinrich highlighted frustrations about Tri-State Generation and Transmission Association’s limits on local renewable energy projects, during a Senate Energy and Natural Resources Committee hearing yesterday focused on “Rural Energy Challenges and Opportunities.”
Senator Heinrich noted that one electric cooperative in New Mexico ended its contract with Tri-State, in order to pursue more local solar energy projects, and he asked a representative of Basin Electric (which sells power to Tri-State) about Tri-State’s policies that have limited electric cooperatives in New Mexico from pursuing more than 5% of their power needs from local sources. Senator Heinrich's comments are shown in this video, and transcribed below.
A report published last week by Moody’s Investors Service found that most coal plants owned by municipal utilities and generation and transmission associations are now more expensive than new renewable energy. From Moody’s press release:
Most municipal- or G&T-owned coal plants in the US are old and have high production costs. According to the report, 72.3% of these plants, or about 65.0 gigawatts, have operating costs exceeding $30 per megawatt hour, which Moody's views as the threshold above which coal plants are vulnerable to be displaced by cheaper generation options.
The report provides costs and other details about several coal units, including those owned by Tri-State Generation and Transmission Association - the Escalante coal plant in western New Mexico, all three units at the Craig coal plant in northwest Colorado, and unit 3 of the Springerville coal plant in eastern Arizona. According to Moody’s report, each of those five coal units’ total production costs in 2016 were higher than that $30 per megawatt hour threshold.
Most residents of rural Colorado and New Mexico buy electricity from electric cooperatives, and most of the electric cooperatives in each state buy electricity from Tri-State Generation and Transmission Association. As part of their power supply contracts with Tri-State, each of those co-ops are currently limited to providing just 5% of their electricity needs from local renewable energy projects, and must purchase the rest from Tri-State.
Tri-State’s limits on local energy development are a growing problem for co-op members in both states, as more co-ops seek the cost savings and other advantages of renewable energy. Surveys of the 18 co-ops in Colorado and 11 co-ops in New Mexico that buy power from Tri-State show an increasing number of co-ops that are approaching the 5% limit. The survey results show that at least five co-ops have reached the 5% limit on local energy development, including United Power, La Plata Electric, Delta-Montrose Electric, San Miguel Power, and Mora-San Miguel Electric.
Moreover, another eight co-ops are approaching the 5% limit, including Poudre Valley Electric, Otero County Electric, Central New Mexico Electric, San Luis Valley Electric, Sangre de Cristo Electric, Highline Electric, Southeast Colorado Power, and Sierra Electric.
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