Holy Cross Energy plans to shift away from coal, aiming for 70% renewable energy

By Joe Smyth | [email protected] | @joesmyth

Holy Cross Energy announced last week that it plans to shift its power supplies away from coal and increase its use of renewable energy to 70% by 2030, without any increase in the costs of it power supply. The Glenwood Springs based electric cooperative says the plan would lead to a 70% reduction in greenhouse gas emissions, compared to 2014 levels.

Holy Cross Energy CEO Bryan Hannegan highlighted why the co-op could shift to renewable energy without increasing costs: “Thanks to advances in technology and changes in energy markets, we have the opportunity to bring on new renewable energy resources at costs comparable to our existing supply. This will enable us to meet our clean energy goals while maintaining the reliable, affordable and safe service our members have come to expect.”

Other electric utilities in the state have also begun to increase their use of renewable energy, taking advantage of the fact that new wind and solar power in Colorado is now cheaper than existing coal plants, and responding to growing demands for cleaner energy from large electricity consumers including municipal governments and some major companies. But Holy Cross Energy is the first electric cooperative in Colorado to establish an ambitious renewable energy target. Let’s look at how Holy Cross Energy plan to achieve its goals.

Screenshot from Holy Cross Energy "seventy70thirty" website

A fact sheet provides some details about the strategies that Holy Cross Energy will pursue.  Some strategies are focused within the co-op’s service territory, such as developing at least one local utility scale clean energy project every three years, beginning in 2020. Holy Cross Energy will also continue to purchase power from its existing local renewable energy providers, which currently provide 13% of its power supply.

Some strategies will also require support and participation from co-op members, including energy efficiency improvements and a goal of adding at least 2 megawatts of new rooftop solar each year on co-op members’ homes and businesses. Holy Cross provides a variety of programs for its members to help support the co-op's renewable energy and energy efficiency goals, including rebates, energy assessments, and a renewable energy purchasing program.


Holy Cross Energy investigating sale of its share of the Comanche coal plant 
In addition to developing local renewable energy projects, Holy Cross Energy will also have to look beyond its service territory to reach its 70% renewable energy goal. That’s because Holy Cross Energy currently holds an 8% stake in unit 3 of the Comanche coal plant in Pueblo Colorado, along with Xcel Energy and Intermountain Rural Electric Association. While Comanche units 1 and 2 are scheduled to shut down by 2022 and 2025 as part of Xcel Energy’s Colorado Energy Plan, the larger and newer unit 3 will continue to run. And the co-op’s share of the 750 megawatt coal unit is by far its largest source of emissions - Comanche 3 accounted for 53% of the co-op’s power supply, according to a Holy Cross Energy representative.

In an interview last year, Hannegan acknowledged that Holy Cross Energy's stake in Comanche 3 would be the biggest challenge facing the co-op as it shifts to cleaner power. Here’s how Holy Cross Energy says it plans to deal with its stake in the coal plant, according to the fact sheet:

To increase the amount of renewable energy in the HCE power mix and reduce its greenhouse gas content, we will seek to sell some or all of the 60 MW of power we receive from Comanche 3 to another entity; and replace that with new, additional wind and solar resources constructed to meet HCE needs.

While this action will reduce the greenhouse gas emissions of the power supply we provide to our customers, HCE will still be responsible and accountable for our share of the greenhouse gas emissions associated with the operation of Comanche 3. We will also investigate options, such as a sale of the asset, that would permanently reduce HCE’s carbon footprint associated with Comanche 3.


Power supply agreements vary among Colorado co-ops
While its stake in Comanche 3 presents a particular challenge for Holy Cross Energy, the co-op could have an easier time pursuing new renewable energy projects than most other co-ops in the state, because of its agreements with Xcel Energy for the remainder of its power supply. Holy Cross Energy’s fact sheet notes, “Our power supply and transmission agreements with Xcel Energy give us additional clean energy options that may not be available to other utilities.”

In contrast to Holy Cross Energy, eighteen of the 22 electric cooperatives in Colorado are currently limited to providing just 5% of their electricity needs from local renewable energy projects, and must purchase the rest from Tri-State Generation and Transmission Association.

The four electric cooperatives in Colorado that do not purchase electricity from Tri-State are Holy Cross Energy, Intermountain Rural Electric Association, Yampa Valley Electric Association, and Grand Valley Power. While those four co-ops may not face the same restrictions as those that purchase power from Tri-State, they could still face some limits. In response to an inquiry about its contracts with Colorado co-ops, a statement from Xcel Energy noted that “they do have limits to other generation resources,” but didn’t provide details about those limits. Here’s the full statement from Xcel Energy:
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Holy Cross purchases “Full Requirements Service” from Public Service Company of Colorado (“Public Service”), an Xcel Energy operating company.  Full Requirements Service means it purchases all capacity and associated energy from Public Service in excess of power received from other suppliers (i.e., Holy Cross can acquire Economy Energy, purchase from qualifying facilities and from the Western Area Power Administration).  Until the existing contract’s termination, they do have limits to other generation resources. Pursuant to the existing contract, Holy Cross benefits from the efforts of Xcel Energy to add greater amounts of economic renewable energy to its Colorado system. For example the Colorado Energy Plan, recently approved by the Colorado Public Utilities Commission, will add another 1,800 MW of renewable energy driving the Public Service system to 55% renewable by 2026 as well as achieving a close to 60% reduction in carbon emissions.

Additionally, Public Service and Holy Cross have contracted to operate their transmission systems as an integrated transmission system to share the reliability of such an integrated  system. This transmission arrangement goes back to the Colorado-Ute Electric Association bankruptcy in the early 1990’s.

Public Service’s other wholesale power contracts are also full requirements service contracts which define and limit the types and quantities of power the other customers can acquire from other parties. The other wholesale customers are not parties to the transmission integration agreement referred to above.

Read More:

Holy Cross Energy:  Our new energy goal is set. 70% clean energy by 2030.
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How are electric cooperatives navigating the transition from coal to cheap clean energy?

Energy News Network: Q&A: A Colorado scientist puts theory into practice as utility leader

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

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