A new report from the Rocky Mountain Institute (RMI) finds that Tri-State Generation and Transmission Association could save its member co-ops over $600 million through 2030, by taking advantage of low cost renewable energy resources and shifting away from its reliance on coal fired power plants. Moreover, the report shows that if Tri-State fails to cut costs and continues to rely on its higher cost coal plants, the generation and transmission association will face increased risks, including losing electricity sales because of defection by its member co-ops, as well as by those co-ops’ members.
The RMI report compares the costs of each of Tri-State’s coal fired power plants – broken down by the costs of fuel, fixed operations and maintenance costs, and variable operations and maintenance costs – to the range of bid prices for new wind and solar energy in Colorado that Xcel Energy received this year in response to it Colorado Energy Plan proposal. Even after adding costs for expanding transmission and other integration costs to bring those new renewable energy resources online, it costs more to keep running Tri-State’s coal plants than it would to add new renewable energy.
The Trump administration's latest proposal to subsidize coal and nuclear power plants is more expansive than earlier efforts, and a key change could impact utilities and ratepayers in the Western United States. That change follows a recommendation by Tri-State Generation and Transmission Association to expand coal plant subsidies to the Western region.
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.
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