Clean Cooperative
  • Home
  • News
  • Energy Transition
  • Tri-State
  • Xcel
  • Reports
    • Uncooperative: Colorado
    • Uncooperative: New Mexico
  • About

Report: Tri-State could save $600 million by shifting from coal to renewable energy

8/23/2018

 
By Joe Smyth | joe@cleancooperative.com | @joesmyth
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.
Picture
Figure 2 from Rocky Mountain Institute report: A Low-Cost Energy Future for Western Cooperatives
RMI looked at three different scenarios for Tri-State’s Escalante coal plant in New Mexico: a “Business as usual” scenario where Tri-State continues to rely on the coal plant, a “Fuel saver” scenario where Tri-State adds 200 megawatts of new wind and solar energy, allowing it save money by running the coal plant less frequently, and a “Retirement” scenario, where Tri-State closes the coal plant and replaces it with 342 megawatts of new renewable energy, supplemented with capacity purchases. The results show that retiring the coal plant offers the most savings compared to business as usual - $32/MWh in operating costs, compared to $40/MWh. The "Fuel saver" scenario would also reduce costs at $35MWh thanks to reduced fuel and variable costs, but not as much as retiring the plant, because Tri-State would still need to pay for the plant's fixed costs.
Picture
Figure 3 from Rocky Mountain Institute report: A Low-Cost Energy Future for Western Cooperatives
RMI then assessed the total cost savings available to Tri-State's 43 member co-ops through 2030, by comparing “Business as usual” to an “Energy transition” scenario where Tri-State gradually retires all of its coal plants by 2026, adds new wind and solar energy, uses its existing natural gas plants to help integrate that new renewable energy, and purchases additional capacity. RMI concludes:
 
Under the energy transition scenario, Tri-State’s members, and the approximately 1 million end-use consumers
they serve, would save approximately $600 million in present-value terms between 2018–2030. Through avoiding both the operating costs and the go-forward fixed costs of running and maintaining legacy assets, and instead sourcing low-cost renewables and capacity in competitive procurement processes, Tri-State could lower supply costs by ~12% in 2030 and pass along those savings to its member-owners.
Picture
Figure 4 from Rocky Mountain Institute report: A Low-Cost Energy Future for Western Cooperatives
Tri-State responded to the RMI report with a post on its website that noted it is "currently soliciting for additional renewable energy supply, and has received more than 100 proposals totaling over 10,000 megawatts."



Is collective action still possible for Tri-State and its member co-ops?
RMI notes that other utilities with higher cost coal plants have similar opportunities to reduce costs by shifting toward low cost renewable energy. But the situation for Tri-State's member co-ops is noteworthy:

The opportunity for Tri-State’s distribution co-ops is particularly dramatic, as they are balancing the competing priorities of lowering their own members’ costs while also being financially responsible for costly legacy investments initially made on their behalf by Tri-State itself. The combination of rapidly evolving economics and competing priorities ensures that the transition to a lower-cost energy future for co-ops will be complex, and likely challenging.

To meet these challenges head-on, distribution co-ops and their providers can pursue a strategy of collective action, built on transparency and open dialogue, that can bring focused innovation, regionally appropriate solutions, and scaled buying power to the situation at hand. In the case of Tri-State, both the opportunities and risks hinge on the collective action of multiple stakeholders, including Tri-State itself, its co-op members, and their end-use customer members; acting alone, any one group may find it advantageous to take actions (e.g., regressive rate structures, load defection) that make unilateral economic sense but could limit the opportunity for cooperative action among parties.

​Some co-ops seem to consider that the opportunity for collective action has already passed - after years of efforts to shift Tri-State's direction, Delta-Montrose Electric Association is now seeking new financing options to end its contract with Tri-State. Kit Carson Electric Association ended it contract with Tri-State in 2016, and one of its directors says that “Getting rid of Tri-State is the best thing that ever happened to Kit Carson."


But staff and directors at other co-ops that I've spoken with are still trying to work with Tri-State to navigate the risks and opportunities of a rapidly changing utility industry. More on that - and the risks that Tri-State faces if it continues to rely on its higher cost coal plants - next week.

​
Further reading:
RMI Report: A Low-Cost Energy Future for Western Cooperatives: Emerging Opportunities for Cooperative Electric Utilities to Pursue Clean Energy at a Cost Savings to Their Members


A Q&A with Mark Dyson, author of the RMI report, from Allen Best 

Mine cleanup funds at risk as coal power suppliers lose customers, from Mark Olalde

Colorado rural electric cooperatives look at cutting the cord, from Mark Jaffe

Moody’s report: “High quality renewable resources” could help Tri-State and Basin Electric navigate rising carbon transition risks
​

New wind and solar power in Colorado is now cheaper than existing coal plants

Comments are closed.
    Tweet
      Sign up for email updates
    Sign up for email updates

    Recent Articles

    Basin Electric faces growing pressure on coal from co-ops, insurers, and banks​

    Tri-State: Moving a cooperative power provider from coal to clean energy​


    Tri-State will replace coal plants with a gigawatt of new wind and solar

    United Power and La Plata Electric ask Colorado Public Utilities Commission to determine Tri-State exit fee

    Colorado Rural Electric Association spent electric cooperatives’ money supporting Republican politicians​

    Colorado Public Utilities Commissioner questions "whether or not Tri-State has been candid with us"

    Rural America could power a renewable economy - but first we need to solve coal debt​

    Tri-State explores FERC rate regulation to limit state oversight

    Poudre Valley Electric sets "80 by 2030" carbon free goal

    Guzman Energy proposal would finance retirement of Tri-State coal plants, add 1.2 gigawatts of new wind and solar power

    Colorado Public Utilities Commission will oversee Tri-State resource planning

    Colorado communities and state Energy Office urge Public Utilities Commission oversight of Tri-State

    Reports examine the impacts of Tri-State's high wholesale power costs​

    Tri-State executive involved with anti-Clean Air Act group since 2005

    US Congressional Committee requests details of Tri-State funding to anti-Clean Air Act group

    Renewable energy projects stalled in 2018 among Tri-State member co-ops

    Second co-op asks Tri-State to pull “Better Together” ads

    Tri-State won’t allow co-op members to attend annual meeting

    Tri-State expects member co-ops to support bylaw changes at annual meeting

    Rocky Mountain Farmers Union calls on Tri-State to adopt flexible contracts and more clean energy

    Co-ops in Colorado push for change at Tri-State

    Will Municipal Energy Agency of Nebraska remain reliant on coal?​

    Tri-State ad campaign tells co-ops they’re “better together”

    La Plata Electric concerned Tri-State debt will lead to higher rates​

    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

    Categories

    All
    100% Renewable Energy
    Basin Electric
    Black Hills Energy
    Central New Mexico Electric
    Colorado Energy Plan
    Colorado Public Utilities Commission
    Colorado Rural Electric Association
    Comanche Coal Plant
    Craig Coal Plant
    Delta Montrose Electric
    DMEA Vs Tri State
    Dry Fork Coal Plant
    Empire Electric
    Escalante Coal Plant
    Generation And Transmission Associations
    Global Climate Action Summit
    Governor Hickenlooper
    Grand Valley Power
    Gunnison County Electric
    Guzman Energy
    Highline Electric
    Holy Cross Energy
    Intermountain Rural Electric
    Intermountain Rural Electric Association
    Jared Polis
    K.C. Electric
    Kit Carson Electric
    La Plata Electric Association
    Mora-San Miguel Electric
    Morgan County Electric
    Mountain Parks Electric
    Mountain View Electric
    Municipal Energy Agency Of Nebraska
    Net Metering
    Otero County Electric
    Platte River Power Authority
    Poudre Valley Electric
    Poudre Valley Rural Electric
    Sangre De Cristo Electric
    San Isabel Electric
    San Luis Valley Electric
    San Miguel Power
    Senator Heinrich
    Sierra Electric
    Southeast Colorado Power
    Springerville Coal Plant
    Tri State Generation And Transmission
    United Power
    White River Electric
    Wind Energy
    Xcel Energy
    Yampa Valley Electric Association
    Y-W Electric

    Archives

    November 2020
    July 2020
    February 2020
    November 2019
    October 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    June 2018
    May 2018
    April 2018
    March 2018
    January 2018
    December 2017
    November 2017
    September 2017
    August 2017
    July 2017

    RSS Feed

  • Home
  • News
  • Energy Transition
  • Tri-State
  • Xcel
  • Reports
    • Uncooperative: Colorado
    • Uncooperative: New Mexico
  • About