La Plata Electric Association’s board of directors voted unanimously Wednesday to move forward with finalizing efforts to buy-down its contract with Tri-State Generation and Transmission Association, and receive half of the megawatts required to service its members from Crossover Energy Partners.
“This is a breakthrough partnership that delivers substantially greener energy at lower costs while ensuring the reliability our members expect,” said LPEA Board President John Witchel. “I am incredibly proud of the LPEA team and the extraordinary results their hard work has delivered to our community. I hope that other rural electric co-ops around the country will follow our lead to a more sustainable and resilient future.”
New contracts with Crossover stem from the decision made by LPEA in 2018 to try to reduce its carbon footprint by 50% by 2030. Since 2019, LPEA has sought to amend its 50-year contract with Tri-State in an effort to provide its members with cost-efficient, low-carbon power.
“I think it’s a monumental partnership, because we had some really difficult conversations with Tri-State in the beginning, and with their board,” said LPEA CEO Jessica Matlock.
LPEA says contracting for half of its power with Tri-State and half with Crossover would have the co-op meet its carbon footprint reduction goals six to seven years earlier than it planned, and could save around $7 million per year.
“This community wants renewable, green energy, and this agreement allows us to get to our renewable goals faster than we would otherwise be able to do,” Witchel said.
The LPEA board will continue discussions about how to pass on the anticipated cost savings to members. Options include rate decreases, the postponement of future rate increases, the increased retirement of capital credits to members, or increased funding for capital construction or fire-mitigation projects to improve service reliability.
A finalized contract buy-down payment with Tri-State is still being negotiated with the Federal Energy Regulatory Commission.
“We found a mutual benefit between us and Tri-State and now we’re going in partnership together to try and get FERC to make a final decision,” Matlock said.
LPEA spokeswoman Hillary Knox said completing the buy-down agreement with FERC is expected to finish as soon as 2023. Knox also said LPEA doesn’t expect to start accepting power from Crossover until 2024.
“It’s quite a process to get the power supply contracts finalized both with Crossover and Tri-State,” she said. “It takes some time for things to happen and for our new generation plants to be up and running.”
Knox said it’s likely that LPEA won’t begin to receive savings associated with its Crossover contract until a year after services begin, likely in 2025.
Although it will likely be a couple of years before LPEA starts accepting power from Crossover, Witchel said this agreement is moving fairly quickly for the world of energy.
“The world of energy is by nature a slow-moving world, because you can’t just build solar farms and decommission coal plants overnight,” he said. “The most important thing is to keep the lights on. The idea that we’re going to go from a signed contract in the next couple of months to benefiting the membership in a year and a half is, in my mind, lightning speed.”
njohnson@durangoherald.com
