It has been a year since I first explored the idea of running for the Board of Directors of La Plata Electric Association. I was fortunate enough to be elected by the people of District 4 to represent their interests.
While I knew ahead of time that the LPEA directors were split into two factions, it did not take long to see it firsthand. A significant point of contention revolves around our relationship with Tri-State Generation and Transmission, our electricity provider.
LPEA’s contract with Tri-State requires us to buy 95 percent of our electricity from Tri-State through the year 2050. This is contentious because of several factors. First, Tri-State generated over 60 percent of its electricity last year by burning coal, and coal is absolutely the worst fuel for CO² emissions and pollution. For those who care about climate change or community health, this is a major problem.
Second, Tri-State is no longer a competitive supplier pricewise. Before to 2009, Tri-State was able to provide electricity at a lower price than the average market price. However, after 2009, the market price dropped well below Tri-State’s price. This was mostly because of the steep drop in natural gas prices. Tri-State’s coal-burning plants were (and are) no longer competitive. And finally, the contract limits opportunities for local economic development through distributed generation projects.
LPEA spends about 65 percent of its budget with Tri-State to purchase electricity. This means your rates are primarily driven by the Tri-State price to LPEA. The other 35 percent of the budget is spent maintaining the grid in our service area and includes everything from equipment to salaries. But with 65 percent going to electricity costs set by Tri-State, the LPEA board has very little control over what it charges its members. (LPEA is a co-op and therefore does not attempt to make a profit.)
Recent steep drops in the price of renewables (wind and solar) have made clean energy much less expensive than Tri-State’s price to LPEA. We pay Tri-State approximately 7.4 cents per kilowatt-hour (kWh), but Xcel Energy recently received bids for wind energy at less than 2 cents per kWh! Even adding as much as 2 cents to get the energy here (transmission charges) would still make those wind prices lower than Tri-State’s rate.
The most disturbing thing about the LPEA board is the unwillingness of some directors to even consider alternatives. Kit Carson Electric Association in Taos, New Mexico bought out their contract with Tri-State in 2016, so it can be done. Would it make sense for LPEA to buy out the Tri-State contract? No one really knows, because the board has not been willing to investigate this. A Long-Term Strategy Committee was created at the last board meeting, but only on a 6 to 5 vote. The purpose of this committee is to look at how the electricity industry is changing and make recommendations to the entire board about how to move forward.
LPEA members attend our board meetings and make their opinions known during the member comments period, and some members feel that there is no reason to be looking at the Tri-State contract.
But we are buying our electricity from one of the dirtiest sources in the U.S. and paying well above market prices. Why wouldn’t we want to explore our options?
I would really like to see an open-minded attitude on the part of all of the LPEA directors. The only way that LPEA is going to survive and best serve our members is if we adapt to industry changes. Otherwise, as an instructor said in a training class I attended, “we will be selling our assets to someone else at half of their book value as we go out of business.”
Guinn Unger lives in Forest Lakes and is a member of the board of directors of La Plata Electric Association. The opinions expressed here are his own and do not reflect any official position of LPEA. Reach him at firstname.lastname@example.org.