From The Denver Post (Allen Best):
The South Canal was sculpted through hardscrabble hills to deliver water imported from the Black Canyon of the Gunnison. The water irrigates 66,000 acres of farms and orchards in the Delta-Montrose area. Emerging from a tunnel, the water drops rambunctiously in several places, with electricity-generating potential that was obvious even when William Howard Taft, our most portly of presidents, visited Montrose in 1908 to dedicate the Uncompahgre Project.
Instead of developing small, local power sources, however, electrical providers in the Delta-Montrose area turned to giant new power sources: the massive new dams of the Colorado River and ever-bigger coal-fired power plants. It was a national trend. After World War II, in response to burgeoning demand, power generation became like products from Costco: big and bigger.
In recent years, Delta-Montrose Electrical Association has challenged that paradigm. It’s among 22 electrical co-operatives in Colorado set up in the late 1930s to service primarily rural areas. Several of them — along with co-ops in other states — in 1952 created a wholesale provider, Tri-State Generation and Transmission. Tri-State a decade ago pushed to build another giant coal-fired power plant, this time near Holcomb, Kan. It wanted commitments until mid-century from its 44 member co-ops.
Delta-Montrose, along with Kit Carson Electric, a co-operative in Taos, N.M., refused. Flattening demand has, at least for now, idled plans for the giant new coal plant.
Delta-Montrose instead set out in 2008 to develop the raw power of water in the South Canal. Two turbines able to produce 7.5 megawatts of electricity have been installed. The cost of that electricity is relatively low, 4.5 to 5 cents per kilowatt-hour, says Jim Heneghan, renewable energy engineer for Delta-Montrose.
Then, Percheron Power proposed to yoke the energy of a remaining 14-foot drop with a technological variation of the Archimedes screw. Would Delta-Montrose buy the power?
Yes, Delta-Montrose was interested, but it had a problem. It was already procuring 5 percent of its own power, the maximum that Tri-State policy allows member co-ops to produce on their own. So Delta-Montrose appealed to the Federal Energy Regulatory Commission, an agency with broad powers in the byzantine world of energy regulation. Delta-Montrose argued that a 1978 federal law trumped Tri-States’ so-called all-requirements contract. FERC agreed.
“We find that Delta-Montrose is obligated to purchase power” from the independent provider, FERC declared in June.
How about Tri-State’s 43 other members? In mid-October, FERC indicated the ruling applies to the other distribution co-operatives. Some think it may apply to others among the nation’s 840 electrical co-ops. Much depends upon whether individual co-ops choose to take advantage of the opportunity.
The FERC decision can be seen in tandem with other Colorado news of late: the debate about net-metering and Boulder’s goal of accelerating innovation and energy transformation by getting a divorce from Xcel Energy.
Even without carbon-reduction goals, market forces have been changing the energy landscape. “The cost of local generation from renewables is rapidly declining while the cost of electricity from traditional sources continues its steady rise,” says John Covert, who has worked to foster innovation of business models in the San Luis Valley.