|
By Joe Smyth | joe@cleancooperative.com | @joesmyth
United Power will dedicate the largest battery storage system in Colorado next week, a 16 megawatt hour Tesla Powerpack in Longmont that the electric cooperative expects will save its members $1 million each year.
But recent policy changes by Tri-State Generation and Transmission Association, United Power’s wholesale power supplier, aim to discourage other cooperatives from pursuing similar projects, creating uncertainty for the deployment of battery projects in much of rural Colorado and New Mexico. United Power shifted its focus to battery projects last year, after the co-op reached the 5% limit on local renewable energy generation imposed by Tri State. Over the past several years, United Power sought to reduce its purchased power costs by building several solar arrays in its service territory that deliver power at a lower cost than power sold by Tri-State. Blocked from pursuing more local solar projects, United Power developed a strategy to use batteries to help control its peak demand. Last month, United Power also wrote to other co-ops expressing "grave concerns" about Tri-State, including the high cost of power it sells to member co-ops and "Tri-State’s reluctance to embrace additional sources of renewable energy generation due to constraints of its largely fossil fuel generating fleet." Controlling peak demand will help the co-op manage its purchased power costs - which could slow the growth revenue that Tri-State receives from United Power. So this past summer, Tri-State changed its Policy 115, which describes how the 5% limit will be implemented. Tri-State inserted language into the policy to include “energy storage devices, such as batteries,” even though the policy was designed to deal with co-ops’ renewable or distributed generation projects. A June 2018 copy of the proposed changes to Tri-State Policy 115 shows the edits to the policy in red, before those changes were finalized. 
Tri-State policy change could block some co-ops from installing batteries
That policy change significantly reduces the economic value of energy storage projects for the 43 electric cooperatives in Colorado, New Mexico, Wyoming, and Nebraska that buy power from Tri-State, and could limit several of those co-ops from pursuing battery projects at all. Because Tri-State now classifies batteries in the same category as renewable energy projects, co-ops in Colorado and New Mexico that have reached (or are approaching) the 5% limit by building solar projects in recent years could now suddenly be blocked from considering battery projects. The policy change could also discourage co-ops that haven’t reached the 5% limit because instead of being able to use the battery to directly reduce peak demand charges from Tri-State, co-op battery projects will instead be compensated as though they were a source of energy generation - at a less valuable rate that is established by Tri-State. Discouraging co-ops from deploying batteries to manage their peak demand charges could lead to higher electric bills for members of electric cooperatives that buy power from Tri-State. That's because those peak demand charges can account for a surprisingly large portion of the bill that co-ops pay for wholesale power. For example, Gunnison County Electric Association, another co-op that buys power from Tri-State, says: “Six hours of each year, 30 minutes of each month, causes 46% of GCEA's wholesale power bill.” The proportion that peak demand charges account for in a wholesale power bill varies among co-ops. Those high costs are why several co-ops have developed projects and policies aimed at managing their peak demand, such time of use rates and discounts for smart thermostats that co-ops can manage on the hottest days, to limit soaring electricity demand when everyone’s air conditioners are running. United Power New Business Director Jerry Marizza thinks that batteries could be a more powerful tool for managing peak demand than some other programs, because they can provide the co-op with a more precise level of control. 
United Power's 4 megawatt/16 megawatt hour Tesla battery project near Longmont Colorado
CEO says Tri-State has “tried to get our members to move slow” with batteries
At the Colorado Rural Electric Association (CREA) Energy Innovations Summit in October 2018 CREA CEO Kent Singer asked Tri-State CEO Mike McInnes about United Power’s battery project: We've got one Colorado co-op that is looking at that, installing a battery on their system. Mike, what kind of issues does that bring up for Tri-State, when your members want to look at a battery project? McInnes acknowledged that Tri-State has “tried to get our members to move slow” with batteries, but did not mention the recent policy change that directly discouraged new battery projects: We do have a member that is ahead of the others on battery projects. We haven't figured out exactly how that all works, we hope to be able to work through that. Obviously we talk about batteries as being game changers, everybody wants them to be a game changer, it certainly appears that they could be a game changer. But in our view, there are still some things that need to be developed before they become those game changers. We haven't seen some of the end that others apparently see, and so we're trying to move through that in a little more measured fashion. I just hate to be a trendsetter, it just - it's not in my DNA. I figure if somebody else wants to be first one to get their name in the paper, if somebody wants to be the first at something, I can learn their lesson, their hard ones. And then I can slip right in the wake of that boat, enjoy all the benefits but not have the bruises. So now I've told you my weakness, I've made a confession. But we've tried to get our members to move slow with that as well, let's let some of the industry work those wrinkles out, and then we can come in and we can provide a much better product, it can be much less volatile, as far as our rates go, and much less risk for the membership. The discussion between Kent Singer and Mike McInnes about United Power's battery begins at minute 54:19:
United Power CEO: “the G&Ts have to be a little more open to change”
Later at the same event, in a session about co-op battery storage projects, United Power CEO John Parker said that the future of battery development among co-ops depends on whether generation and transmission associations would be “a little more willing to work with their members:” I think if you're going to see a lot of movement in batteries, the G&Ts have to be a little more open to change, a little more accepting, a little more willing to work with their members. If this is really going to change the industry, we all need to work together to figure out how to make it work. I don't understand how batteries might work on transmission systems, I've never studied it, I hope our G&T has. But it's a coming thing, and we can treat it like rooftop solar and just go: "Nah, it will never come down and be price competitive." But we didn't pay any attention to that, and it got away from us. And I would hate to see that happen with batteries. Parker also explained why United Power didn’t pair its battery project with a solar array: We thought that would be a complicating factor in just getting the project coordinated with Tri-State. We thought that politically, or pragmatically, we just thought it would be easier to charge it off of Tri-State's system than through bringing the complication of a solar array. Plus we were already at our 5% as far as the renewables go. 
Slide from United Power battery presentation at the CREA Energy Innovations Summit in October 2018
Further reading: Blocked from building more solar projects, United Power shifts to community batteries United Power seeks solutions to "increasingly outmoded G&T business models" Tri-State’s limits on local energy development are a growing problem for co-op members Senator Heinrich highlights “frustrations in New Mexico” with Tri-State’s limits on local solar Governor Hickenlooper discusses Tri-State at the Climate Leadership Conference Comments are closed.
|
Recent ArticlesColorado 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
Archives
July 2019
|
RSS Feed