Tri-State commits to major push for renewable power, expediting closure of Nucla Station
Tri-State Generation & Transmission unveiled its new Responsible Energy Plan this week, which will transition the company’s power portfolio further into renewables to reduce electric rates for its members.
Among the highlights of the new plan is the closing of Nucla Station in early 2020.
Currently, almost half of Tri-State’s power generation comes from coal, and about one-third comes from renewable sources.
“Our membership and board are unified in our pursuit of a cleaner, reliable and lower-cost resource portfolio,” said Rick Gordon, chairman of the cooperative’s board of directors, in a Wednesday news release. “We are making a strong and unequivocal commitment to transform Tri-State’s resource portfolio in a prudent and responsible manner.”
In May, Tri-State refused an offer by Denver’s Guzman Energy to buy and subsequently shut down the remaining coal-fired generators at Craig Station.
According to Guzman, the offer involved a “substantial cash infusion into Tri-State” worth about $500 million and would have closed and remediated the mine feeding Craig Station unless another customer is found for the coal.
Guzman recently finalized a deal with the Kit Carson Electric Co-op in northern New Mexico to help the co-op leave Tri-State in order to build its local renewable base. Once the co-op pays off an exit fee loan from Guzman sometime in 2022, KCEC officials say their member’s electricity costs will plummet to $47MWh, well below Tri-State’s 2017 wholesale average of $75MWh.
In May, Lee Boughey, Tri-State’s senior communications and public affairs manager, said Kit Carson’s power has been more expensive after making the deal with Guzman.
“According to documents filed with the New Mexico Public Regulatory Commission, it would appear that Kit Carson in 2018 paid about 40% more for power than Tri-State’s members,” Boughey said.
Among the details of Tri-State’s newer, cleaner power portfolio will be a partnership with former Colorado Governor Bill Ritter and the Center for the New Energy Economy, a research initiative at Colorado State University seeking to help transition the country to a clean-energy economy.
“My team and I welcome the opportunity to work with Tri-State in facilitating this stakeholder process,” Ritter said. “At a time when the power sector is transitioning in a dynamic way, assisting Tri-State in developing a resource plan that reflects that transition is a true privilege.”
Tri-State Chief Executive Officer Duane Highley said the company understands that in order to achieve major carbon reductions, renewable energy planning requirements, grid reliability, and affordability through lower wholesale rates under their new plan, Tri-State will have to work directly with those most affected.
“As a cooperative, we understand that transformative change requires understanding and engagement with stakeholders,” Highley said. “Governor Ritter and the Center for the New Energy Economy will convene for Tri-State the best and brightest to surface ideas that will inform and advance our planning.”
Tri-State has been criticized for its cap on local renewable generation to 5% of the area’s electricity, so much of the new plan centers around allowing local communities more flexibility to develop and build their own renewable power sources like solar arrays and wind farms.
“Our members are developing recommendations to make their wholesale power contracts more flexible,” said Rick Gordon, chairman of the cooperative’s board of directors. “With partial requirements contracts, members could increase local renewables while also maintaining the value and security of being a member of Tri-State.”
Tri-State hinted at several other areas of the plan, including a probable expansion of hydroelectric capacity.
“Tri-State will address key issues, including developing Western regional electricity markets, assisting impacted energy-producing communities, continuing and developing new tax incentives, addressing permitting for transmission line and power plants, and reconsidering the value of hydropower to ensure the Responsible Energy Plan’s success,” the release stated.
Tri-State and other electric co-ops have all had to deal with a shifting regulatory climate in Denver as new rule-makings related to new state laws are soon to be decided.
“We recognize that Tri-State facilities, employees and communities will be affected by the changes ahead,” Highley said. “Regulatory rulemakings and significant study must be completed to understand how to comply with new laws while preserving reliability and affordability, but we know our system and operations will change.”
As for Nucla Station in southwest Colorado, Tri-State will provide about $500,000 over five years to help support the Nucla community after the plant shuts down in early 2020. The plant currently employs 35 people and was on track to be retired in 2022 as part of Colorado’s State Implementation Plan to improve air quality.
“For decades, Nucla Station has been part of the fabric of Nucla and Naturita, and we understand the retirement of the plant impacts our employees, their families and the community,” Highley said. “We will work to support the community through this difficult transition.”
Construction of a new terminal at the Yampa Valley Regional Airport has been delayed at least until next year.