La Plata Electric Association is a state and national leader in expansion of locally-generated renewable power, new CEO Mike Dreyspring and Chief Financial Officer Dennis Svanes told Pine River Centennial Rotary Club members on Jan. 28.
Dreyspring started with LPEA last Sept. 2, replacing Greg Munro, who retired. Dreyspring previously directed a much larger electric co-op in the Dallas area.
LPEA customers have been enthusiastic about installing solar photovoltiac systems on their homes, Svanes and Dreyspring said, and at least two of the four private providers in the co-op's solar garden program are fully subscribed. One of those solar gardens is actually up and running, and another is close.
The increase in grid-tied solar systems is actually causing some problems, they advised. The stream of electricity in power lines must be constantly maintained within a narrow voltage and frequency range. But too much solar power being fed into the system can push some lines above that range, damaging some customers' electronic appliances and gadgets.
According to LPEA's page in the January Colorado Country Life magazine, the grid was designed for power to flow one way, from generation to user on demand. Now it's flowing both ways.
"The power problems of deployed solar are very difficult to manage," Dreyspring said. "We have to monitor and meter in real time. Distributed generation is forcing utilities to operate differently."
He also said that as more households satisfy their needs with grid-tied solar instead of the electric from LPEA, it reduces co-op income from electric sales and puts more pressure on base rates. The base rate is intended to pay operating and maintenance costs for LPEA's distribution network.
LPEA also has locally-generated hydro power, and biomass and geothermal generation are in the works in the Pagosa area, Dreyspring said. The Williams gas processing plant west of Ignacio generates electricity with waste heat and feeds the excess into the LPEA grid.
He and Svanes were asked about Senate Bill 252, passed by Democratic state legislators a couple years ago requiring rural electric coops to get 20 percent of their power from renewable sources by 2020. The bill sparked a secession movement in the northeast part of the state. Some state legislators want to repeal it or ease the requirement.
The SB 252 requirement isn't a problem for LPEA, Svanes and Dreyspring said.
"Some (co-ops) say, 'It won't happen here.' There's nothing that can stop this evolution" to distributed generation, Dreyspring said. LPEA is ahead of the curve. "Other co-ops are contacting us about how we deal with some of the issues of distributed generation."
What is a problem is the contractual five percent limit from LPEA's supplier Tri-State on locally-generated power. "Five percent of our power can come from our own resources," Svanes said. "We are there."
That's what is holding up the authorization of any more solar gardens, which are a way for customers who don't have good solar exposure or who can't afford their own installation to have solar.
They noted that a supplier like Tri-State has invested billions of dollars in power plants and transmission lines, so they need assurance of sales of their power. Wind power also is part of their portfolio.
"They is us," Svanes said. "We are they."
Svanes said the LPEA board is looking at whether to authorize more solar gardens. The Southern Ute Indian Tribe has a grant to build a much larger solar garden than any of LPEA's, but they can only use that power for their own facilities. One question is how that might work on the checkerboard reservation.
The tribal project is exempt from Tri-State's local generation cap, but other solar isn't, Svanes said. "Our contract with Williams expires in 2017. The (LPEA) board might not renew that to allow more solar gardens." If the biomass and geothermal projects in Archuleta County come on line, that will preclude more solar gardens.
The electric utility industry is facing fundamental change, Dreyspring said. Since the industry started, its infrastructure developed around central large-scale power generation. Companies were vertically integrated, meaning they owned the power plants and distribution to customers.
Tri-State operates power plants and regional distribution, while LPEA controls distribution to its members.
Now utilities are having to adapt to more and more distributed generation such as the solar, biomass, and geothermal. It's a lot of small sources feeding into the system - especially in LPEA's territory.
Historically, coal has been the fuel for large power plants. But the price of coal has increased where it is very marginal economically, and the price is expected to continue increasing, Dreyspring said. Natural gas and even solar are now very competitive in cost.
"We are way past the issue of climate change," Dreyspring said. "It won't be affordable to generate with coal. The economics are tilting to other sources."
Svanes said Tri-State's current cost for coal generation is $55 to $60 per megawatt hour. That will go higher if the federal Environmental Protection Agency imposes tougher emission standards.
Dreyspring said generation with natural gas now costs around $28 per megawatt hour, and wind generation in West Texas is at $30 to $50 per megawatt hour. He didn't have a price for solar.
