Electric cooperatives have shifted their approach to renewable energy amid declining prices and growing public support, but wholesale power providers are key
By Joe Smyth | email@example.com | @joesmyth
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.”
Colorado Speaker of the House KC Becker noted that the announcement showed how some co-ops have shifted their approach to renewable energy, even in politically conservative regions of the state.
One important change over the last six years is that renewable energy prices have declined so much that they are now often cheaper than continuing to run existing coal plants.
Another key change is that public support for renewable energy has increased, among Republican, Independent, and Democratic voters.
A Colorado College poll last month asked western voters which two energy sources they want to encourage in their state. The results showed that western voters, and Colorado voters in particular, overwhelmingly favor solar and wind power development. In Colorado, 68% support solar power development, and 63% support wind power development, while only 9% support coal.
The annual poll of eight western states also showed that between 2013 and 2019, public support for renewable energy increased among Republicans, Independents, and Democrats. In 2013, 47% of Republican voters in the West supported solar energy development, while that number rose to 56% in 2019. Support also increased among Independent voters, from 58% to 69%, and Democratic voters, from 71% to 86%.
Co-ops' power suppliers are key to clean energy goals
Grand Valley Power expects to reach the 60% goal in large part because it purchases nearly all of its wholesale power from Xcel Energy, which is shifting its power supply mix from coal to a larger share of renewable energy. Xcel Energy's Colorado Energy Plan, which the Colorado Public Utilities Commission approved in August 2018, will mean the utility will reach 53% renewable energy in Colorado by 2026. Xcel also announced that it plans to reduce carbon emissions 80% by 2030, and reach 100% carbon free electricity by 2050 across its eight state service territory.
Grand Valley Power CEO Tom Walch told the Grand Junction Daily Sentinel that Xcel Energy's plans are "one of the main things that is driving" the co-op's own clean energy goal.
Xcel Energy provides over 95% of Grand Valley Power's wholesale power needs, with 2% coming from federal hydroelectric projects sold by the Western Area Power Administration. Grand Valley Power has also developed local renewable energy projects, but those are not expected to play a major role in meeting the co-ops' clean energy goal. A spokesperson for Grand Valley Power said in an email: "Our local renewable will grow but we do not anticipate this to exceed more than 3% incrementally. This target contemplates that we will continue on this path with Xcel Energy."
Other electric cooperatives in Colorado face a more challenging path to meeting their clean energy goals.
Last month, La Plata Electric Association adopted a goal to reduce its carbon footprint 50% below 2018 levels by 2030. In a press release announcing the goal, La Plata Electric CEO Mike Dreyspring explained that the co-op will need to develop a plan to meet the goal:
“There’s a process we’re going to need to go through to put some substance into what 50 percent reduction means. The over-arching objective is de-carbonization in time. That’s what we’re shooting for. This is the beginning of a challenging and exciting journey for us.”
La Plata Electric manager of engineering and member relations Ron Meier added: “Now the real work begins. How do we establish our benchmarks, and how do we determine the best course for us to pursue?”
A key challenge facing La Plata Electric's goal is that unlike Xcel Energy, La Plata's wholesale power provider, Tri-State Generation and Transmission Association, has not established a clean energy or emissions reduction goal.
La Plata Electric is studying the possibility of switching to a different power supplier, as Kit Carson Electric did in 2016 and Delta-Montrose Electric is currently pursuing. But the Durango Herald reported that some La Plata Electric directors think it might be possible to meet the co-op's goal without leaving Tri-State - though that depends on Tri-State's power supply decisions, as well as a proposal to change its bylaws that would give member co-ops more flexibility to buy power from other providers.
The first electric cooperative in Colorado to establish a clean energy goal faces still other challenges with its power supply, but has already made some progress.
In September 2018, Holy Cross Energy announced a goal "to increase the renewable electricity we provide our members from 39% (currently) to 70% by 2030, and reduce our greenhouse gas emissions by 70%."
Like Grand Valley Power, Holy Cross Energy buys wholesale power from Xcel Energy, and so will also benefit from Xcel's clean energy plans. But Xcel represents a significantly smaller portion of Holy Cross Energy's wholesale power supply, while just over half of the co-op's power comes from unit 3 of the Comanche coal plant in Pueblo Colorado.
To try and address its dependence on the Comanche coal plant, last month Holy Cross Energy announced a "renewable energy swap agreement" with wholesale power provider Guzman Energy. Under the deal, Guzman Energy will buy the output from Holy Cross Energy's stake in the Comanche coal plant, while Holy Cross Energy will purchase the power from a new 100 megawatt wind project that will come online in 2021.
While pricing details about the deal are confidential, Holy Cross Energy CEO Bryan Hannegan said in an email that the deal was consistent with the co-op's commitment "to avoid any increase in power supply costs to our members as a result of our move to 70% renewables."
In the press release announcing the deal, Hannegan said, “Our new partnership with Guzman Energy will raise the amount of renewable energy in our power supply mix to almost 70 percent by 2021 – nine years earlier than promised."
However, as Holy Cross Energy noted in its September announcement of its clean energy goal, selling the power from the Comanche coal plant won't fully remove the co-op's responsibility for those emissions:
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.
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