Declare victory and stay with Tri-State. What does that mean?
This past March, the board of directors of La Plata Electric Association, a nonprofit electric cooperative, voted to withdraw from Tri-State Generation and Transmission Association, a nonprofit cooperative that has provided power to LPEA for more than 30 years.
The reasons stated by LPEA for withdrawal have been addressed by Tri-State because of the actions of the LPEA board. LPEA has won, and it is time to declare victory and avoid the potential negative economic and lifestyle impacts to every household, every business, every person in La Plata and Archuleta counties associated with withdrawal.
In its exit statement, LPEA said Tri-State was not moving toward a renewable energy future, but that has changed. On Aug. 22, the Colorado Public Utilities Commission approved the Tri-State “Electric Resource Plan” to convert to renewable energy that meets the carbon goals set by the state of Colorado.
There was no opposition from the 28 environmental organizations that monitor these plans. Tri-State has obtained $2.5 billion in grants and loans from the Dept of Agriculture to implement the plan. Tri-State is now the shining example in Colorado for renewable energy. LPEA won.
Secondly, LPEA wanted more flexibility to construct or obtain its own power. On Aug. 5, the Federal Energy Regulatory Commission approved the “Bring Your Own Resource Program,” which allows up to 40% of the LPEA energy load to be provided by other contracts such as local solar providers. This provides greater flexibility for LPEA – another win.
Obtaining renewable energy is not a slam dunk because most potential power is from projects that are not built. Tri-State already has two solar projects on the Western Slope and is attempting to construct additional facilities (such as Dolores Canyon Solar Project). With the approval of the Electric Resource Plan and the federal funding, Tri-State has the best chance of constructing its own renewable energy facilities, compared to for-profit companies. LPEA won.
Withdrawal from Tri-State is costly at $209 million ($4,250 per meter) to be paid by rate payers. After withdrawal, LPEA will no longer have an ownership interest in generation and transmission facilities but will “rent” those facilities through contracts with for-profit companies that have to be renewed periodically.
The withdrawal cost to rate payers is already occurring with the new 7.7% rate increase LPEA announced Nov. 20, of which “A component of this rate adjustment does include preparing for the contract termination payment to Tri-State in 2026.”
LPEA announced on Nov. 7 it will purchase both 40 MW of firm power from Tri-State for eight years and an option for an additional 40 MW if the Tri-State’s Dolores Canyon Solar Project is constructed. This shows that Tri-State is currently the most cost effective and reliable source. Why is LPEA planning to pay $209 million to withdraw from Tri-State and then buy power from Tri-State at the same or higher rates? That does not make sense.
It is less risky continuing the more than 30-year membership in the nonprofit Tri-State co-op as opposed to the higher risk of contracts with untested for-profit companies. LPEA can have renewable power, flexibility to purchase power from local projects, stability of an ownership interest in Tri-State facilities and avoid the withdrawal fee we will all pay for. Simply declare victory and stay with Tri-State.
Steve Harris is an engineer and 50-year resident of La Plata County.
