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La Plata Electric Association’s future in flux

Board of Directors members explain trajectories the nonprofit energy organization could take
About 70 people attended an event at the Durango Public Library Saturday to learn more about where LPEA might be headed as changes to the energy market continue to disrupt old models.

The future of La Plata Electric Association may not be certain, but change is on the horizon, board members said at a presentation Saturday.

About 70 people attended an energy discussion at the Durango Public Library where two LPEA board members, District 4 representative Guinn Unger, whose region encompasses northeastern La Plata County, and District 3 representative Britt Bassett, whose region encompasses Durango, briefed residents on the complexities of member-owned electricity co-ops and what may come as technology advances and the organizations pushes for more renewable energy.

LPEA board members are looking at what it might mean for the nonprofit energy organization to part ways with its energy supplier, Tri-State. A contract between LPEA and Tri-State requires LPEA to purchase all of its energy from the multi-state electricity nonprofit. The contract allows LPEA to generate 5 percent of its electricity.

And that wasn’t a problem until about 2009, Unger said, when Tri-State rates began exceeding the average rate for Southwestern communities. That’s because the price of natural gas went down – Tri-State produces just 10 percent of its energy from natural gas. Other energy companies produced more energy with natural gas, reducing the cost of energy by a larger margin.

“The number one driver of LPEA rates is Tri-State rates,” Unger said. “No one is expecting at this point for market rates to go above Tri-State charges.”

And with the Tri-State contract, LPEA has just a few options for making electricity cheaper for its member-customers. It could encourage member customers to install solar panels, which produce energy “behind the meter,” Unger said, reducing the amount of energy LPEA needs to purchase from Tri-State as consumers either produce enough energy for themselves or sell energy back to LPEA.

“The best tool we have for renewable energy is behind-the-meter energy production,” Unger said.

LPEA could also encourage its member customers to use more energy-efficient electronics – the less energy LPEA uses at its peak will reduce the demand fee on LPEA energy bills, which is a cost based on the highest energy use in a month. If LPEA uses less energy in those peak hours, the demand fee will decrease, Unger said.

There’s also the prospect of leaving Tri-State entirely, which would require a contract buyout from LPEA. Britt Bassett said the most it could cost to exit the contract with Tri-State is about $200 million. If LPEA left Tri-State and sought energy on the wholesale market, the organization could save up to $20 million each year, he said. It would also open LPEA up to more opportunities to purchase renewable energy that would be just as reliable, Bassett said.

“It’s positive enough, we have to look at the possibilities,” he said. “We anticipate doing more locally but rely on the wholesale market.”


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