Frustration is growing in La Plata County's agricultural community as some residents worry that La Plata Electric Association's decision to cut ties with Tri-State Generation and Transmission Association could lead to higher energy costs.
In March, LPEA chose to exit its contract with Tri-State, facing a $209 million buyout fee, sparking concerns at Wednesday's La Plata County Farm Bureau meeting.
Tri-State sells electricity to member co-ops across the Western United States.
“I already pay $4,000 a month for electricity; this is only going to make it worse,” said Ignacio rancher J. Paul Brown about LPEA’s decision earlier this year.
Since 2019, the two co-ops had been negotiating new contract terms or a full withdrawal, allowing LPEA to meet the demands of some members to pursue more local energy generation.
Tri-State CEO Duane Highley spoke at the meeting located at the Oxford Grange on Wednesday. The Tri-State CEO opted to remain neutral in his comments on LPEA's decision to exit the contract, and the relationship between the two power co-ops appears to remain cordial.
“I'm not here to criticize their business decision. I'm just here to talk about Tri-State and what we're doing,” Highley said.
All of the attendees at Wednesday’s meeting were in favor of LPEA staying with Tri-State. Highley said during a Q&A portion of the meeting that if LPEA wanted to stay with Tri-State that it could, but was not going to make comments on the power co-op’s decision to exit the contract.
“I'll just say this Tri-State is indifferent financially. The Federal Energy Regulatory Commission said what's a just, reasonable and non discriminatory price, so if they pay their share of the debt, we're fine. We'd rather they stay. But if the entity decides that's in their best interest (to leave), that's fair,” Highley said.
Among the reasons why LPEA decided to exit its contract with Tri-State was to seek independence in order to look for more green energy options.
Under terms of the contract, LPEA was obligated to purchase at least 95% of its power from Tri-State through 2050. LPEA had objected to that limit, saying local demand to produce solar energy exceeds the 5% cap.
In September, LPEA announced it’s partnership with Mercuria Energy America LLC, a power wholesaler based out of Houston.
During the meeting, Highley emphasized that Tri-State aims to reach 50% green energy by the end of 2025 and noted that power rates have only increased by as much as 2% since 2017. Colorado's carbon emission regulations have driven power suppliers to focus more on green energy alternatives.
Furthermore, Tri-State has agreed to shift to 70% renewable generation by 2030.
But for some La Plata and Archuleta county residents, the move by LPEA appeared to be too risky.
One Durango resident, Henry Bruckner, compared LPEA’s exit from Tri-State to Texas attempting to secede from the Union.
“It’s all well and good, until a hurricane hits and you need FEMA,” Bruckner said analogously.
Some community members feared that LPEA rates would rise like it did for Kit Carson Electric Cooperative, a power co-op based in Taos, New Mexico, after the power co-op left Tri-State in 2016.
In 2015, Kit Carson's average power cost per member was $0.141 per kilowatt-hour, according to public filings with the New Mexico Public Regulation Commission.
By 2019, the U.S. Energy Information Administration reported that KCEC's per-consumer energy rate had risen to $0.1728, marking a 22.5% increase over four years.
Kit Carson's buyout from Tri-State came with a $37 million price tag, significantly lower than the $209 million Tri-State is demanding from LPEA.
A September news release from LPEA announced that Mercuria has committed over 50% of its new investment capital to renewable and transitional energy. This news coincided with the reelection of two LPEA board members, Tim Wheeler and Kirsten Skeehan, on the same day the partnership with Mercuria was revealed.
Two LPEA board directors, Kohler McInnis and Dan Huntington, were in attendance at the meeting. Both McInnis and Huntington voted against leaving Tri-State.
McInnis, who represents south and west La Plata County, told The Durango Herald in March that he was concerned the power co-op would need to borrow a substantial amount of money to cover the contract buyout, which could lead to higher rates.
After back and forth conversation between meeting attendees and Highley about LPEA’s departure, Huntington stood up and made a statement, speaking on his own behalf.
“I'll bet I can count on one hand how many people have showed up that have objected to what the board's been doing,” Huntington said.
Huntington told the crowd that he voted “no” on leaving Tri-State and expressed his own frustration with the direction the board was moving.
“We cannot find common sense people to run for these boards – in county elections and everything else. We have a core group of people in Durango, and they're elected to everything,” Huntington said, urging all La Plata and Archuleta county residents to bring their concerns to the LPEA board members during their meetings.
“We need to speak up. I think we're a day late and a dollar short, trying to change the decision of the board,” Huntington later said, saying that the co-op needs to monitor its finances carefully.
The Durango Herald attempted to contact LPEA for comment on Thursday but did not receive an immediate response.
tbrown@durangoherald.com
