Clean Energy Means Business Summit highlights renewable energy opportunities and challenges in rural Colorado

By Joe Smyth | joe@cleancooperative.com | @joesmyth

At the Clean Energy Means Business Summit in Denver this week, representatives of municipalities and companies in Colorado discussed how they are pursuing their renewable energy goals, including navigating the challenges and opportunities of working with electric cooperatives in Colorado. The event, organized by the Colorado Solar Energy Industries Association and the Compact of Colorado Communities, also included presentations from solar energy developers, electric utilities, and state officials.

Craig Edwards, Director of Corporate Services at Aurora Organic Dairy, discussed how the company considers a variety of options for on-site renewable energy projects at its operations in Colorado and Texas, and said, “We’re just wrapping up a couple solar installations at two of our dairy farms here in Colorado, they’re our first steps towards our clean energy strategy.”

Edwards said that the Aurora had sometimes faced challenges in working with electric cooperatives as it pursues on-site renewable energy projects, but had found success by discussing the company’s goals with co-op staff. Aurora is still negotiating with other electric cooperatives about future projects:

We’re still working through many different negotiations with many of our co-ops. Each one of our locations we operate in has a unique mix of renewable energy sources and possibilities, we have a co-op for each one generally, so we look at everything on a case by case basis.

Vail Resorts announces major new wind project, also exploring local renewable energy options
Kate Swayne Wilson, Director of Sustainability at Vail Resorts Management Company, described how the company pursues several types of renewable energy purchasing arrangements, depending on what is available for its resorts. The largest effort is a new virtual power purchase agreement for about 74 megawatts from the Plum Creek Wind Project in Nebraska, which was announced this week. Vail Resorts is also planning more renewable energy projects at or near its ski resorts, according to Wilson:

I announced this wind project that will come online, we’re also looking at local opportunities and how can we sign on to Xcel Energy’s Renewable Connect program to build a new solar facility in East Denver, and we’re looking at doing some stuff in Park City, and we do have on-site at Vail and Beaver Creek. So that’s just the beginning, we have to keep doing more and more and more.

Vail Resorts published a report this week with additional details about its sustainability strategy, including its efforts to reduce energy use with more efficient snowmaking equipment and other measures. That report shows that electricity accounts for two thirds of Vail Resorts’ carbon emissions.

Image from Vail Resorts EpicPromise Progress Report, 2017-18 Season

That’s true for other ski resorts as well, as I detailed last year - Aspen Skiing Company's sustainability report highlights the impact of helping clean up its electric power supply mix, noting that “Our most effective strategy to reduce emissions is working with our utilities to choose lower carbon fuel sources.”

Vail Resorts is also focused on working with the utilities and cooperatives that supply power to their operations, according to Wilson:

In Eagle County we work with Holy Cross very closely, and we’re lucky because they have a 70% by 2030 target themselves, and we just closed on Crested Butte, and Gunnison they have a 50% by 2030. So we are lucky that some of the co-ops that we’re working with are aligned in terms of what they’re trying to do. So yes, we are absolutely engaged with them, actively - not Crested Butte yet, but we will be. And we’re really excited to support them in what they need and try to figure out, what are the barriers and how do we work on that?

One barrier for Holy Cross Energy is its ownership stake in unit 3 of the Comanche coal plantings Pueblo Colorado, which currently accounts for just over half of Holy Cross Energy’s power supply. Holy Cross Energy said in September that it is investigating a sale of its share in the coal plant.

For Gunnison County Electric, a key barrier is that its power supply largely depends on the coal-heavy mix of power supplied by its wholesale power provider, Tri-State Generation and Transmission Association. Gunnison County Electric is among the 18 electric cooperatives in Colorado with contracts that require them to purchase 95% of their power from Tri-State.

Those restrictions on local renewable energy development in rural Colorado were a topic of discussion during several of the panels at the Summit. Kent Singer, Executive Director of the Colorado Rural Electric Cooperative Association, said at the summit that it wasn’t yet clear whether those restrictions might be relaxed, but it's a frequent topic of discussion among Tri-State’s member co-ops:

I was out at Tri-State yesterday for their board meeting, and this issue came up, it comes up all the time. Tri-State has 43 co-ops across 4 states, thus the name Tri-State, right?

They had a member, Kit Carson Electric in Northern New Mexico, withdraw from Tri-State a couple years ago, and paid out of their contract because they wanted to do more renewables. Whether or not that’s going to be a good financial decision I think the jury is still out. And there are a couple other members of the Tri-State system who would like to do more local generation, and presumably mostly renewable generation.

The reason that Tri-State has a contract that requires its members to buy 95% of their power from the company is to collateralize their debt. When they borrowed money from the federal government, through the RUS program, you could only do that as a G&T if you could guarantee the government that you were going to pay them back, and how do you do that? You do that through all-requirements contracts. That’s just the basic structure of the G&T program.

And over time it’s been modified a little bit, there’s this 5% that you mentioned, and Tri-State folks are looking at that very hard, in fact their contract committee I know is going to meet again about that relatively soon, talk about that issue again. Whether or not they bump that up to 10% or some other number, I don’t know yet. But there is pressure to look at that.

It is a tough issue, you’ve got to have sufficient revenues to pay off your loans and service your debt, and so at what point does that depart from how much your members can do at the local level? It will be, though, a decision made by Tri-State’s 43 members who own the G&T. The distribution co-ops own the G&T, the members own the distribution co-ops. It will be a joint decision, and they’ll just have to try and figure it out. It’s a very challenging issue to work through. I think collectively they’ll get there, I can’t tell you whether it’s going to change, but they’re talking about it.


Further reading:
Tri-State’s limits on local energy development are a growing problem for co-op members

What do corporate renewable energy commitments mean for electric utilities?

Companies' 100% renewable energy goals are getting results in Colorado

Colorado towns and cities are helping push utilities to embrace renewable energy

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