Keeping the lights on for over 75,000 people 365 days a year is no simple task. Delivering electric power relies on a coordinated effort of generators and transmission lines strung over thousands of miles, along with the hard work of La Plata Electric’s dedicated staff.
LPEA works hard to keep your rates low, but like many households and businesses facing over 20% inflation, our costs are rising. LPEA recognized inflation pressures early in the decade and stockpiled equipment, but costs continue to soar – from power poles (up 57%) to copper wire (up 218%) to bucket trucks (up 69%). Additionally, to maintain a skilled workforce, we must continue offering competitive wages. To ensure LPEA can provide safe and reliable power, electric rates will increase by an average of 7.7% for co-op members starting in April 2025. This change results from two main factors: inflation and modernizing our power supply portfolio.
On April 1, 2026, LPEA will leave its outdated contract with its long-term wholesale power provider. This multi-decade contract has limited our ability to invest in the rapidly changing energy market. While our current power comes substantially from fossil fuels, today’s electric grid can access low-cost clean energy sources, such as wind, solar and geothermal.
After extensive study, we know that by becoming independent, LPEA can provide our members with affordable, sustainable and reliable power while significantly lowering greenhouse gas emissions.
Feedback from LPEA members has revealed some misconceptions about our power supply transition. For instance, a recent Op-Ed, “Let’s avoid the potential negative impacts of withdrawing from Tri-State,” (Herald, Dec. 7) suggested that we should declare victory and remain in our current Tri-State contract. However, our decision to exit is not about winning or losing – it’s about making the best decisions for our community and achieving mutually beneficial outcomes. Our ongoing work with Tri-State, evidenced by the recent announcement of an agreement allowing LPEA to purchase up to 80MW of power, illustrates this.
It has been suggested that Tri-State’s newly approved Bring Your Own Resource program provides the flexibility needed within our current contract. However, BYOR is more complex than a simple expansion of our self-generation capabilities from 5% to 40%. While it allows member co-ops to benefit from low carbon intensity, it is not a direct pass-through of financial benefit.
Additionally, the $2.5 billion in USDA New ERA funding awarded to Tri-State will help it refinance its debt but won’t eliminate it. If LPEA remains a Tri-State member, we may be required to extend our contract and it would increase our portion of Tri-State’s debt load by at least $150 million.
It’s also important to clarify the $209 million Contract Termination Payment. This is not an “exit fee” or “penalty.” Rather, it represents funds LPEA would inevitably pay Tri-State, which would be incorporated into our rates if we continue our membership – about $54 million is for future transmission service, and the rest represents our current debt with Tri-State.
Our new independent approach allows for local investments, job creation and economic growth. LPEA is moving from being a “renter,” paying off external costs and debt, to investing in our own house. Since announcing this transition, LPEA has received power proposals for about half of our current costs. Although there are upfront costs involved, LPEA’s future “power house” will be more reliable, secure, affordable and clean.
We are confident in our “Community Power” plan and are committed to serving you, your families and your businesses to achieve the best outcomes for our area. We look forward to providing regular updates as we continue on this journey together to control our own destiny.
Ted Compton, LPEA board president, is a fourth-generation Durango resident.
