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The balancing act of transitioning to green energy

All-renewable power in Durango by 2050 would not be easy or cheap

The petition signed by about 1,000 people calling on the city to transition to 100 percent local renewable energy by 2050 is a goal fraught with challenges.

On one side, advocates push for a long-term transition, as renewable energy production becomes more affordable and cheaper to maintain than traditional methods, such as coal-fired power plants.

“Renewable energy is the future, there’s no doubt about it,” said Lissa Ray, a renewable energy advocate.

These same advocates feel La Plata Electric Association is already behind compared with similar organizations.

“We are seeing our neighbors around us take some bold moves,” said Monique DiGiorgio, executive director of Local First.

On the other side, LPEA’s staff says that while it is interested in pursuing renewable options, getting to the point where the city is drawing all of its energy from renewable sources is challenged by the co-op’s contract with wholesale suppliers, the cost of generation and the storage required to meet the highest demands for electricity.


“We are all trying to make sure we are working toward an affordable, sustainable electric future,” said Dan Harms, manager of rates, technology and energy policy for LPEA.

Here is a look at those three challenges to attain the goal asked for in the resident-driven petition.

Contract constraints

LPEA is contracted to buy 95 percent of its power from Tri-State Generation and Transmission, its wholesale supplier, for the next 32 years. Already, the co-op is close to purchasing all of the renewable energy the contract allows.

Some advocates are concerned that Tri-State is not investing enough in renewable energy to stay competitive and that it has invested too much in expensive coal-fired generation, which is costing the co-op more.

“The rate-payer is subsidizing Tri-State,” Ray said.

Tri-State produces about 26 percent of its energy through renewables. It has also decided to close its share of the San Juan Generating Station in northwestern New Mexico, the Nucla Station outside Nucla, and one unit of the Craig Station in northwestern Colorado, said Lee Boughey, a spokesman for the wholesaler.

The closings in Craig and Nucla were driven by the regulatory environment for coal-based generation, current and forecasted market conditions and the significant costs to install additional emissions controls, he said.

Twenty-two of Tri-State’s co-ops have developed or plan to develop more than 145 megawatts of renewable generation projects, he said.

Ending the contract with Tri-State could allow LPEA to buy cheaper power from renewable producers outside the area through a power broker, DiGiorgio said. It would also allow residents time to develop a range of creative local renewable production, including solar and hydroelectric projects, she said.

But LPEA CEO Mike Dreyspring said the action would not give the co-op the market stability that Tri-State generation provides and could expose it to the volatility of the market.


It is unknown how much it would cost LPEA to buy out of the contract, said Guinn Unger, an LPEA board member. LPEA would have to pay Tri-State $50,000 for an estimate.

Though $50,000 seems like a large amount, it is a tiny fraction of LPEA’s $100 million budget, so it would be worth the price to determine the feasibility of leaving the supplier, Unger said.

Kit Carson Electric Cooperative in New Mexico, a smaller co-op with fewer years left on its contract, recently agreed to pay $37 million to separate from Tri-State.

If LPEA also decided to leave, for every $100 million that had to be repaid to the wholesaler, 1.5 cents would have to be added to every kilowatt hour of power sold by LPEA for 10 years. The cost increase would equate to a 10 percent increase on a residential bill for every $100 million Tri-State required to be paid back, Harms said, in a written analysis.

The cost increase to members could be offset by paying for a lower-cost power source, he said.

Renewable infrastructure

Putting in new green energy generation, such as solar arrays, requires high upfront investments. Once established, they don’t require fuel or as many staff members as traditional generation, LPEA staff said.

“Infrastructure that is invested in renewable energy is very long term with very little maintenance costs,” Ray said.

LPEA recently analyzed how much it would cost to generate all of its members’ solar power locally and determined it would require $1.38 billion to install all of the necessary panels.

If the solar panels were put in, the co-op would need a backup source of power to provide for customers’ needs during times when the demand for electricity is highest and solar production is low. Harms said the demand for electricity could be met through local storage to meet the goal of producing 100 percent local renewable electricity, but it would likely make more economic sense to remain part of the grid, which could provide renewable power.

Some residents may be overlooking the complexity of the grid after they install solar to their house and all their electrical needs are met, he said.

“The only reason everything still works is because the grid is still behind it providing the correct balance of real and reactive power, the right frequency and the right voltage level,” he said in a written analysis.

Renewable energy advocates say they aren’t interested in leaving the grid or immediately transitioning to 100 percent renewable energy.

“That’s not what anybody is thinking is reasonable or logical or achievable at this point,” Unger said.

But he would like to establish a subcommittee of the LPEA’s board to study renewable energy sources because the energy sector is rapidly changing and the cost of renewables is projected to continue to fall.

A 2017 forecast by Bloomberg estimates the cost of electricity from photovoltaic solar panels will drop by 66 percent by 2040.

The viability of solar gets a lot of attention in Southwest Colorado because there are plenty of sunny days and it doesn’t get too hot, which can hurt the production from solar panels, Unger said.

Advocates say they are interested in a mix of renewable production that could help supplement solar, which peaks during the day.

LPEA also likely wouldn’t have pay for all the renewable infrastructure. Private investors and property owners could likely offset the cost, Ray said.

For example, solar arrays could be installed on buildings throughout town to help meet consumer demand for electricity, she said.

A good first step would be to study how much roof-top, or net-metered, solar installations LPEA system’s could support, she added.

Local generation requires storage

Renewable-energy advocates would like to see the $67 million LPEA pays to Tri-State annually, which covers the cost of power and infrastructure, eventually stay in the community to support jobs and economic development.

“It’s an opportunity for us to gain as much local energy independence as we can,” DiGiorgio said.

But, Harms said, producing all the energy locally would require energy storage, such as batteries that are extremely expensive right now.

To store the power needed to provide Durango with electricity would require $750 million, excluding additional storage needed for cloudy days, which would cost $2.3 billion, Harms said.

Purchasing renewable energy from other areas rather than storing it makes it far more feasible to be 100 percent renewable, said Ron Meier, LPEA’s manager of engineering and member relations.

However, advocates say the cost of batteries will fall and it would be worth exploring other options for storing energy.

“I think that technology as a current barrier is not something that will be an issue into the future,” DiGiorgio said.

Advocates also point out that the infrastructure cost analysis leaves out the effect of carbon emissions on the environment and people’s health.

Despite the challenges and debate between renewable-energy advocates and LPEA, board member Rachel Landis says progress is happening.

“If there were no conversation happening at all, that to me is a terrible thing ... It’s a matter of pushing through and finding the right path,” she said.


Tri-State’s decision to shut down its share in coal-fired power plants was driven by the regulatory environment for coal-based generation, current and forecasted market conditions and the significant costs to install additional emissions controls. An earlier version of this story implied the decision was related to Tri-State’s renewable development.

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