Sangre de Cristo Electric Association’s wholesale electricity provider, Tri-State Generation, filed a plan with the Colorado Public Utilities Commission at the end of last year that states the wholesaler would double its solar and wind resources by 2030.
Last year, the wholesaler released its responsible energy plan, which promises to close its coal power plants in New Mexico and Colorado by 2030.
“It’s very impressive, and they’re intent on fulfilling it,” said association CEO Paul Erickson. “Now, it is a plan. We’re dealing with regulators, we’re dealing with member-owners, we’re dealing with securing additional power supply. That can change plans and that can delay plans.”
Tri-State has been criticized for moving too slowly to end its reliance on non-renewable energy by keeping coal plants Escalante Station in New Mexico and Craig Station and the Colowyo Mine in Colorado.
“I’ve gotten a sense of some folks being a little impatient, but we’re on a great track, and we’re on the right track for this plan to be fully engaged.”
The Escalante Station near Grants, N.M., closed at the end of last year. The Responsible Energy Plan also aims to retire Unit 1 of Craig Station by the end of 2025 and Units 2 and 3 of that plant in northwest Colorado, as well as its Colowyo mine, by 2030 and cancel a planned expansion of the Holcomb Station plant.
The plan also lists two wind and six solar projects in the wholesaler’s service area of Wyoming, Colorado, New Mexico and a portion of western Nebraska, which plan to be online by 2024.
Those projects, the majority of which are in Colorado, would generate a total of 1 gigawatt of power, according to the plan.
Erickson said that part of the reason Tri-State needs to hold on to its coal plants is that “We are, Tri-State that is, in debt about $900 million long-term on these coal and natural gas assets, and that debt has to be paid whether somebody’s buying that output or not.”
“If you want to know why people like Tri-State drag their heels, that’s exactly the rub. We owe $900 million on a coal fleet and Wall Street wants their $900 million, and they only offer us a low interest rate because we sign these 50-year contracts for the life of the power plant that we will fully subscribe those plants,” Erickson said. “We can transition to renewable energy tomorrow and our rates will double, because we have that huge debt out there.”
Recently, two energy co-ops with contracts with Tri-State filed to leave the wholesaler, and have had to pay “pretty hefty exit fees” to do so.
The Kit Carson Electricity Cooperative in Taos, N.M., and the Delta-Montrose Electricity Association in Montrose have paid collectively $100 million in exit fees to leave their contracts with Tri-State, according to a report by the Institute for Energy Economics and Financial Analysis.
Thanks to those exit fees, the departure of Delta Montrose and Kit Carson won’t impact how much Sangre consumers have to pay, Erickson said.
“They have a share of that debt, and it’s not fair to dump that debt onto SdCEA consumers, just because they want out,” Erickson said. “If that’s how it worked, everybody would be out, wouldn’t they? And SdCEA would be the last utility holding the bag. We’d owe $900 million.”
Erickson said the moves made by Delta Montrose and Kit Carson are “kind of in vogue right now. Co-ops across the country are exploring ways to either work with their power supplier that they own, like we own Tri-State, or work out of their relationship with their power supplier.”
Erickson said, “We’ve had complaints, we’ve had urgings, we’ve had encouragements to continue to move in that direction (toward greater reliance on renewable energy), of course. We know what we’re doing, and Tri-State knows what they’re doing and we all are in this together to move toward less carbon output.
“We’re moving as aggressively as possible, but we can’t run a utility on ideology. We have to have real solid economics, because we pledge a hippocratic oath, too, and our rule is ‘First do no harm to the consumers,’” he said.
Erickson said Sangre has the option to supplement its subscribed energy from the wholesaler with energy the co-op could collect from other sources on its own.
“The opportunities, plural, are starting to present themselves. In the end, will we take advantage of that? It’s too early to tell, because Tri-State is really ramping up very, very quickly, with more and more renewable resources that they can purchase at ultra-large utility scale.
“If we work with Tri-State on those projects, they’re far, far less expensive than if we were to work on much smaller scale projects,” Erickson said. “That’s not to say we won’t continue to develop smaller local projects in the future. In other words, we intend to start looking at another, if not several, local project.”
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