By Joe Smyth | firstname.lastname@example.org | @joesmyth
United Power, the largest electric cooperative that buys power from Tri-State Generation and Transmission Association, is seeking changes to Tri-State's bylaws that would give more flexibility to United and other co-ops to purchase power from other providers.
In letters sent last week to the other electric cooperatives that buy power from Tri-State, United Power board president James Vigesaa wrote that "the Board members and management of United Power have grave concerns about key elements of Tri-State’s key generation products and services," including Tri-State's reluctance to embrace renewable energy and the high cost of power it sells to member co-ops. A United Power representative said that letters were sent to the board presidents and general managers of each of the 42 other Tri-State member co-ops.
Other electric cooperatives in Colorado and New Mexico have noted similar concerns about the high cost and heavy reliance on coal of the power they purchase from Tri-State, and have responded in a variety of ways. In September, Poudre Valley Electric Association urged Tri-State to study if adjusting its fuel mix could lower costs, as reports from Rocky Mountain Institute and Moody's Investors Service have found. Delta-Montrose Electric Association is pursuing an end to its contract with Tri-State, as Kit Carson Electric did in 2016. La Plata Electric Association is studying its options, and last month contracted with three consulting firms to analyze its contract with Tri-State and other power supply options.
United Power's letter suggests another approach: instead of only allowing all-requirements contracts, which require each co-op to purchase 95% of its power needs from Tri-State, United Power's proposal would "amend the Tri-State bylaws to include a partial requirements membership relationship."
A changing relationship between co-ops and generation and transmission associations
Both the letters from United Power and the resolution from Poudre Valley Electric Association describe the historical relationship between co-ops and Tri-State as mutually beneficial. But they also highlight how new realities in the utility industry have changed those dynamics and undermined what United Power calls "increasingly outmoded G&T business models."
A top concern is the relatively high cost of power that co-ops purchase from Tri-State. United Power explains that it would pay 28.5% less if it purchased wholesale power from Xcel Energy instead of Tri-State. United Power must pass those higher costs on to its members, in the form of higher electricity rates. In the past, that would simply be part of the cost of doing business, but today customers have many more options to reduce the amount of electricity they use, such as energy efficiency measures and on-site renewable energy projects. And since United Power's service territory neighbors that of Xcel, the co-op faces higher risks of losing major customers that could choose to relocate their operations in order to reduce their electricity costs.
Another serious concern for United Power is meeting the growing demands from companies for more renewable energy:
At the Colorado Rural Electric Association Energy Innovations Summit in October, hundreds of co-op board directors and staff heard more about the declining importance of generation and transmission associations. In addition to highlighting the implications of an eroding monopoly, Steve Collier said that "if we didn’t already have a G&T, we might not form one."
Steve Collier, Director of Smart Grid Strategies at Milsoft Utility Solutions, at minute 34:04:
I mean really, where is your energy coming from? Are you generating it? No, you’re buying it at wholesale and delivering it at retail, using your wires. What would prevent you from doing that, not necessarily, from the sources that you’re buying from now?
Tri-State, just keep your seats.
I got to tell you that in the world that we live in today, with workable wholesale power markets and the advent of distributed energy resources, if we didn’t already have a G&T, we might not form one, to do what we formed them to do originally.
I still believe in joint action, and we have to do joint action. But if we had this to do, knowing what was coming, we might have changed what we did a little bit. And so it’s an issue that we’re going to have to deal with, because we entered into those contracts and plants were built as a result of that, and it gives us a bit of a cost disadvantage as we move forward.
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