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.”
United Power, the largest electric cooperative that buys power from Tri-State Generation and Transmission Association, is seeking changes to Tri-State's bylaws that would give more flexibility to United and other co-ops to purchase power from other providers.
In letters sent last week to the other electric cooperatives that buy power from Tri-State, United Power board president James Vigesaa wrote that "the Board members and management of United Power have grave concerns about key elements of Tri-State’s key generation products and services," including Tri-State's reluctance to embrace renewable energy and the high cost of power it sells to member co-ops. A United Power representative said that letters were sent to the board presidents and general managers of each of the 42 other Tri-State member co-ops.
Other electric cooperatives in Colorado and New Mexico have noted similar concerns about the high cost and heavy reliance on coal of the power they purchase from Tri-State, and have responded in a variety of ways. In September, Poudre Valley Electric Association urged Tri-State to study if adjusting its fuel mix could lower costs, as reports from Rocky Mountain Institute and Moody's Investors Service have found. Delta-Montrose Electric Association is pursuing an end to its contract with Tri-State, as Kit Carson Electric did in 2016. La Plata Electric Association is studying its options, and last month contracted with three consulting firms to analyze its contract with Tri-State and other power supply options.
United Power's letter suggests another approach: instead of only allowing all-requirements contracts, which require each co-op to purchase 95% of its power needs from Tri-State, United Power's proposal would "amend the Tri-State bylaws to include a partial requirements membership relationship."
Delta Montrose Electric members vote for new financing options, supporting a potential buyout of Tri-State contract
Delta-Montrose Electric Association members voted to approve changes to the electric cooperative's articles of incorporation this week, creating new financing options that will help the co-op end its contract with its power supplier, Tri-State Generation and Transmission Association. Under the new articles of incorporation, Delta-Montrose Electric Association (DMEA) will be able raise money by issuing capital stock, “which could be used to fund DMEA’s potential Tri-State buyout,” according to a press release.
“We believe addressing our power supply costs is essential for long-term rate stabilization for our members. This was the primary driver behind our recommendation to amend and restate the Articles of Incorporation,” said Delta-Montrose Electric CEO Jasen Bronec in a statement.
The DMEA board urged members to vote yes, including with a video that focused on how the changes would help DMEA finance a buyout of its contract with Tri-State. The co-op also hosted community meetings about the proposed changes. DMEA members voted by mail and at a special meeting on October 16, with 2,677 members voting yes (68%), and 1,248 voting no (32%).
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."
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.
A look at two Colorado electric cooperatives navigating the implications of solar power’s declining costs
Emily Bowie at San Juan Citizens Alliance writes about how the La Plata Electric Association (LPEA) board of directors is discussing the implications of the declining costs of solar energy. Bowie describes how the “board’s touchiest topic is how the declining costs of renewable energy (and rising costs of coal) should impact LPEA’s future.”
Some board directors are concerned about how declining solar power costs could encourage more customers to install their own rooftop solar arrays, and what that might mean for the electric cooperative.
Other board members are more focused on the opportunity for LPEA to take advantage of falling solar power prices, by pursuing its own solar projects. As LPEA director Bob Lynch put it, “I want to be part of a plan that figures out how to use solar to help all our members.”
The town of Breckenridge passed a resolution last week establishing a goal to power the community with 100% renewable electricity by 2035. Breckenridge joins other Colorado towns and cities that are pursuing 100% renewable energy, including Pueblo, Boulder, and Nederland. Aspen achieved its 100% renewable energy goal in 2015, while other towns and cities including Denver and Durango are also considering renewable energy goals.
The responses from the utilities that serve those Colorado towns and cities show that these 100% renewable energy goals are helping push the region toward a cleaner electricity grid, achieving a broader impact than sustainability goals that remain within the boundaries of a municipality. That’s consistent with a new report by global management consulting firm McKinsey & Company, which argues that cities should focus their sustainability efforts on four strategic areas for maximum impact. First among those four strategic areas is using their position as major electricity consumers to help decarbonize the electricity grid:
While cities may believe they have little influence over the grid mix, in fact, they often represent a major portion of any local electric utility’s customers, potentially giving them significant leverage to shape the emissions profile of the electricity consumed within their metropolitan area. Still, capturing this opportunity will not be easy, and cities cannot do it alone. Utilities and regulators must play a central role in ensuring the overall mix of renewables is appropriately balanced at a system level and that critical components such as energy storage are in place to ensure grid reliability. Nevertheless, cities have an essential role to play by setting clear decarbonization goals, aggregating demand for renewables, promoting energy efficiency, and shifting more urban energy consumption to electricity (especially in transportation and heating).
Lowering the emissions intensity of the electricity grid is an especially impactful way that municipalities in the Rocky Mountain region can advance their sustainability goals, because the region’s grid is more dependent on coal, and therefore more carbon intensive, than other parts of the US. But as these Colorado towns and cities seek to accelerate the transition to renewable energy, they face varying challenges in working with the different utilities and electric cooperatives that sell electricity in Colorado. Colorado towns and cities are served by two investor owned utilities, 29 municipal utilities, and 22 rural electric cooperatives, according to the Colorado Energy Office
Let’s look at four Colorado municipalities pursuing renewable energy goals, each with a different electricity provider: Breckenridge, Pueblo, Aspen, and Durango.
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