With 26 states already having adopted renewable energy mandates and Congress debating whether to adopt a national renewable portfolio standard, electric cooperatives are banding together to form a National Renewables Cooperative Organization, now called the NRCO, to develop renewable energy projects.
Sunflower Electric Power Corp. is among the founding members of the new group. “NRCO offers cooperatives a way to pool their resources and efforts into a single national program that shows support for renewables and will put co-ops in a proactive position if a national standard for renewable energy becomes law,” Sunflower President and CEO Earl Watkins said in an April 2 news release. Watkins said that the NRCO will provide a way for electric cooperatives that do not have a lot of opportunity to develop wind, solar or other green power resources to participate in a national renewables program.
“NRCO will help us facilitate wind projects and create new Kansas jobs to export Kansas wind energy elsewhere and import revenue,” Watkins said of the decision by Sunflower’s board to become a founding member.
Generation and transmission cooperatives, unaffiliated distribution cooperatives and partial requirements cooperatives that have the legal ability to participate in the wholesale market are eligible for membership in the NRCO. The National Rural Electric Cooperative Association supports the development of renewable energy, but is not managing the new group.
“This project is in the preliminary stages,” NRECA spokeswoman Tracy Warren said April 4. “It’s a true project of the members. It’s not that it’s happening without us, it’s just that it’s not a top-down, association-led project.”
“These are all businesses that are involved in the generation, the transmission and the distribution of electricity and are reacting to what they see happening on the ground and what they anticipate in the electric utility industry,” said NRECA director of media and public relations Patrick Lavigne. “NRECA is supportive of the effort,” he said, adding, “NRECA is national trade association and not a business. The businesses have come together to aggregate these resources.”
At its March meeting, the board of directors of Tri-State Generation & Transmission Association Inc. approved a membership subscription agreement with the NRCO to become one of the group’s founding members. Tri-State generates and transports electricity to its member systems throughout a 250,000-square-mile service territory across Colorado, Nebraska, New Mexico and Wyoming.
Tri-State Executive Vice President and General Manager J.M. Shafer said that the NRCO puts co-ops in the national spotlight for support of renewable energy. The NRCO has an initial annual budget of nearly $1 million and requires a commitment of $100,000 for the first year of operation from a minimum of 10 members, Tri-State said in a news release.
In February, Basin Electric Power Cooperative’s board voted to join the NRCO. “The reason co-ops exist is because you can do better as a group than by yourself. So we’re taking the co-op approach,” Basin Electric CEO Ron Harper said in a news release. “NRCO is being organized to provide an opportunity for all cooperatives in the nation to participate in the development of renewable resources that might be necessary to meet any future regulatory requirements.”
Harper said that the NRCO’s business plan provides affordable participation, minimizes cost and risk to members, and allows for a low-cost exit strategy.
The structures and rules for the NRCO are still being developed. “We need to get the members, then establish governance and then lay out the rules of the road,” one co-op participant said. However, the basic concept is to aggregate the needs of electric co-ops seeking to buy green power and build renewable energy projects to fulfill those needs where it makes the most economic sense.
In the case of 10 electric cooperatives in Georgia, California, Florida and North Dakota, each needing 10 MW of renewable energy, for example, each co-op would put up a share of the capital to build a facility. The facility might be a 100-MW wind farm in the Great Plains. Each co-op would get credit for its share of the renewable energy generated at the facility. “You actually assume an ownership piece and an ownership obligation for the capital and you get the green attributes you would have had to purchase,” the participant explained.
In 2007, electric co-ops across the United States received 11% of their power from renewable sources, as compared to 9% for the nation’s entire electric utility sector, according to NRECA. Nationwide, co-ops own 450 MW in renewable energy generation and have purchased contracts for 700 MW, for a combined total of 1,150 MW.
By Kathleen Hart
4 April 2008
|Wind Watch relies entirely
on User Funding