#Colorado co-ops consider dropping their energy provider — The Mountain Town News

Craig Station in northwest Colorado is a coal-fired power plant operated by Tri-State Generation & Transmission. Photo credit: Allen Best

From The Mountain Town News (Allen Best):

A cooperative that serves four Western states could soon be losing customers amid concerns it’s not moving away from coal quickly enough.

Colorado-based Tri-State Generation & Transmission boasts of having the most solar generation of any G&T in the United States.

But whether it’s shifting to renewables quickly enough from its coal-heavy portfolio — and flexible enough to accommodate locally-generated electricity — has become a central issue with several of the 43 member cooperatives.

Directors of one of those member co-ops, La Plata Electric Association, voted in January to study alternatives during the next 10 to 15 years. The decision was made by the Durango, Colorado-based co-op after a petition was signed by 1,000 people and 100 businesses calling for 100 percent renewables with deeper penetration from local sources.

“We are buying our electricity from one of the dirtiest sources in the United States and paying well above market prices,” says Guinn Unger Jr., a La Plata director who favors a study of the co-op’s alternatives. “Why wouldn’t we want to explore our options?”

Colorado’s Delta-Montrose Electric Association began negotiating a buy-out with Tri-State last year with much the same goal: greater development of local renewable resources.

A template for both Colorado co-ops was established in 2016 when a New Mexico co-op, Taos-based Kit Carson, left Tri-State and signed an all-requirements contract with Guzman Renewable Energy Partners, a wholesale broker. Guzman paid the $37.5 million exit fee to Tri-State. It also promised to work with Kit Carson to develop 35 megawatts of solar arrays in Kit Carson’s three-county service area until 2023, when federal investment tax credit is set to expire. Kit Carson and Guzman are also planning to add battery storage.

Luis Reyes Jr., chief executive of Kit Carson, says consultants to his co-op concluded that ratepayers would save $50 million to $70 million over the life of the 10-year contract. The plan includes rapid construction of local solar farms and robust purchases of wind generation likely combined with battery storage.

Bob Bresnahan, a Kit Carson director and retired executive from Nike, says he believes solar will meet a third of residential electrical demand by 2022. He also contends the co-op can make deep inroads in its goal of 100 percent renewable generation by 2030.

La Plata’s contract commits it to getting 95 percent of its wholesale electricity from Tri-State Generation & Transmission through 2050. This commits La Plata to paying Tri-State 7.3 cents a kilowatt-hour even as wind and solar prices continue to tumble. Elsewhere in Colorado, Xcel Energy has received bids from wind developers at less than 2 cents a kWh and solar plus storage far below what Tri-State is charging La Plata.

Member cooperatives of Tri-State can produce more than 5 percent of their total electrical use, the result of a 2015 ruling by the Federal Energy Regulatory Commission. Still in question are the terms. Tri-State, in an appeal to FERC, wants a ruling that says that member co-ops must pay for what Tri-State calls its fixed costs related to power production. FERC has not ruled on that case, which was filed in early 2016.

‘We’re bullish on renewable energy’

Tri-State’s 43 member cooperatives collectively deliver electricity to 200,000 square miles in New Mexico, Colorado, Nebraska and Wyoming. Their 615,000 metered members/customers include Telluride and other ski areas in Colorado and giant circles of corn on the Great Plains, oil-and-gas fields in New Mexico and some of Denver’s fastest-growing suburbs.

Co-ops created Tri-State in 1952 to deliver electricity from new giant dams being built in the Missouri and Colorado River basins. Hydro still provides about half of Tri-State’s 1,115 megawatts of renewable generation. Wind constitutes the largest share of the new renewables, but the 85 megawatts of contracted solar are tops in the nation among G&Ts. Member renewable projects total 98 megawatts.

“We are bullish on renewable energy,” says Tri-State spokesman Lee Boughey.

In 2005, with demand still rising sharply, Tri-State was bullish on coal. Wanting to build a major new coal-fired power plant in Kansas, it asked member co-ops to extend their all-requirements contracts by a decade, to 2050, the presumed lifespan of the plant. Kit Carson and Delta-Montrose refused.

Finally, in March 2017, Tri-State got permits from Kansas to build the plant but has indicated it will not do so. Instead, it is shedding coal-fired generation. In December, the association lost its 40-megawatt stake in a unit at New Mexico’s San Juan Generating Station. It’ll lose another 100 megawatts of part-time generating capacity at Nucla, Colorado, by 2023 and then 102 additional megawatts of generation at Craig, Colorado, before 2026. All are the result of settlements under the Clean Air Act to reduce regional haze.

Unger, the La Plata board member, says 60 percent of Tri-State’s electrical generation still comes from coal. Tri-State will only confirm 49 percent for 2017, but also reports 19 percent of its electricity comes from contract purchases.

In Durango, La Plata’s subcommittee has met several times, but Unger says it’s still not clear to him that La Plata should, like Kit Carson, leave Tri-State. He’s disturbed that nearly half the board members didn’t want to evaluate the co-op’s options.

“We should be asking ourselves, what are the facts?” he says. “People are not willing to look at it.”

Unger is also annoyed by implications that Kit Carson was forced to increase rates after it left Tri-State to pay the exit fee. “News articles indicate that the rate increase was to help the co-op with unprofitable affiliates, but the timing is a concern,” wrote Mike Dreyspring, chief executive of La Plata Electric, in an op-ed published in the Durango Herald.

Kit Carson’s rates, responded CEO Reyes, “have not increased one cent due to the buyout.”

‘Coal is no longer the lowest cost fuel’

Directors of Delta-Montrose were unanimous in January 2017 in approving exit negotiations. Neither DMEA representatives nor Tri-State will comment on the talks, citing a non-disclosure contract.

“What our board members want most is the flexibility to be able to diversify generation resources,” says Jim Heneghan, DMEA’s renewable energy engineer. Directors, he says, see local renewable generation as a vehicle for economic development.

Delta-Montrose began pursuing this vision of local generation about a decade ago. it’s in a region of organic apple farms and other agriculture production along with one remaining coal mine. Scores of high-paying coal mining jobs have been shed and the region still lags the economic vigor found in more urban areas.

South Canal hydroelectric site — via The Watch

A diversion project east of Montrose completed in 1909 contains a major fall before delivering water to farms. In harnessing that falling water to produce electricity, Delta-Montrose hit Tri-State’s 5 percent cap on local generation. When an outside developer proposed a third hydro plant to Delta-Montrose, the co-op took the proposal to FERC. In 2015, FERC agreed that the co-op was required, under the Public Utility Regulatory Act of 1978, to negotiate purchase of power generated by what PURPA calls a qualifying facility.

Tri-State concedes that it cannot interfere with a member’s purchase of energy from a qualifying facility. But it wants to be able to assess the co-ops for the fixed-cost portion of sales it has lost above the 5 percent threshold.

“It’s a question of how members relate to each other within their association,” explains Tri-State spokesman Boughey. “Each association member agreed to equitably share costs, and that if members self-supply in excess of the 5 percent provision they would not be paying their fair share of the association’s fixed costs. These costs would have to be made up by other members.”

In Durango, Mark Pearson sees a different equity issue. The director of the San Juan Citizens Alliance, an advocacy group, he says the tens of millions of dollars exported from the local economy to Craig and other coal-mining towns would be better kept at home. Of La Plata’s revenues, 67 percent goes to Tri-State for electrical production elsewhere.

“This is great for Craig to have this money raining down on their community, but we should have that money circulating in our community. If we can keep the money local, it’s better economically for us,” he says.

Taking the long view, DMEA director John Gavan sees community choice aggregation coming, where consumers will have the choice of many power suppliers.

Unlike electrical generation even today, he foresees changes driven from the grassroots that pose questions about Tri-State’s one-member, one-vote setup. He contends smaller co-ops have been more easily influenced by the expertise of Tri-State’s coal-minded officials. “Tri-State is a Senate without a House of Representatives,” he says.

Both Pearson and Gavan see resistance to change being the fundamental issue. “It’s just hard for the old guard to change as quickly as the world is changing, to realize that coal is no longer the lowest cost fuel,” says Pearson.

ABOUT ALLEN BEST

Allen Best writes about energy, water and other topics from a base in metropolitan Denver. He began writing about energy, the climate, and their relationship in 2005. He can be found at http://mountaintownnews.net

Stunning drops in solar, wind costs mean economic case for coal, gas is ‘crumbling’ — ThinkProgress

Aspen gets more than half of its electricity from wind turbines just north of I-80 in the Nebraska panhandle. Photo credit The Mountain Town News.

From ThinkProgress (Joe Romm):

Prices for solar, wind, and battery storage are dropping so rapidly that renewables are increasingly squeezing out all forms of fossil fuel power, including natural gas.

The cost of new solar plants dropped 20 percent over the past 12 months, while onshore wind prices dropped 12 percent, according to the latest Bloomberg New Energy Finance (BNEF) report. Since 2010, the prices for lithium-ion batteries — crucial to energy storage — have plummeted a stunning 79 percent.

“The economic case for building new coal and gas capacity is crumbling,” as BNEF’s chief of energy economics, Elena Giannakopoulou, told Bloomberg.

At the same time, solar and wind plants — which are increasingly being built with battery storage — are eating into the utilization of existing coal and gas plants, making them far less profitable. For instance, the super-efficient combined-cycle gas turbine (CCGT) plants that have been popular in recent decades, were designed to be used at full power between 60 percent and 90 percent of the time.

But their actual utilization rate (also called the “capacity factor”) has been plummeting in recent years, and is now close to a mere 20 percent in countries as diverse as China, Germany, and India.

How energy storage is starting to rewire the electricity industry — @ConversationUS

Image credit Tesla.com.

From The Conversation US (Eric Hittinger/Eric Williams):

The market for energy storage on the power grid is growing at a rapid clip, driven by declining prices and supportive government policies.

Based on our research on the operation and costs of electricity grids, especially the benefits of new technologies, we are confident energy storage could transform the way American homeowners, businesses and utilities produce and use power.

Balancing acts

Energy storage in this context simply means saving electricity for later use. It’s like having a bunch of rechargeable batteries, but much larger than the ones in your cellphone and probably connected to the grid.

After annual average growth of about 50 percent for five years, the U.S. electricity industry installed a total of 1 gigawatt-hour of new storage capacity between 2013 and 2017, according to the firm GTM Research. That’s enough to power 16 million laptops for several hours. While this amount of storage is less than 0.2 percent of the average amount of electricity the U.S. consumes, analysts predict that installations will double between 2017 and 2018 and then keep expanding rapidly in the U.S. and around the world.

To see why this trend is a big deal, consider how electricity works.

It takes a hidden world of complexity and a series of delicate balancing acts to power homes and workplaces because the grid has historically had little storage capacity. After being generated at power plants, electricity usually travels down power lines at the speed of light and most of it is consumed immediately.

Without the means to store electricity, utilities have to produce just enough to meet demand around the clock, including peak hours.

That makes electricity different from most industries. Just imagine what would happen if automakers had to do this. The moment you bought a car, a worker would have to drive it out the factory gate. Assembly lines would constantly speed up and slow down based on consumer whims.

It sounds maddening and ridiculous, right? But electric grid operators basically pull this off, balancing supply and demand every few seconds by turning power plants on and off.

That’s why a storage boom would make a big difference. Storage creates the equivalent of a warehouse to stow electricity when it is plentiful for other times when it is needed.

Governor’s Forum on Agriculture recap

Colorado Convention Center Solar Power System

From Colorado Politics (Marianne Goodland) via The Durango Herald:

Hickenlooper, speaking to an audience at the 27th annual Governor’s Forum on Agriculture this week, said that the Colorado Outdoor Recreation Industry Office met with representatives from recreation offices and outdoor recreation companies from eight states, and the result was something called the Colorado Accord. It’s a nonpartisan effort to work on issues related to clean air, water and public land – areas the trade association strongly supports and part of the reason the trade show moved to Colorado, he said.

This accord is the start of an opportunity for Colorado to be a national leader in outdoor recreation, Hickenlooper said. The companies involved are small – around 10 to 15 employees.

“They don’t want to live in the cities or their businesses to be in the cities,” he said. “These are companies that are naturals for smaller communities … . This is a chance to build a relationship between farms and ranches and outdoor recreation. If you want more jobs in your towns, there will never be a better chance.”

The governor also addressed the ongoing negotiations over the North American Free Trade Agreement, and the importance of maintaining partnerships with Canada and Mexico, which are NAFTA partners. The renegotiation of the 22-year old agreement hasn’t gone as quickly as he would like, Hickenlooper said.

“Our relationships with Canada and Mexico need to remain strong,” given that more than half of Colorado agricultural exports go to those two countries, he said, adding that NAFTA has the potential to do so many good things for Colorado, and that he has talked with officials from both countries.

“They just want a deal,” Hickenlooper said.

Hickenlooper said he recently spoke with the U.S. Secretary of Agriculture Sonny Perdue and their positions align on several issues, such as the need for better and faster negotiations with South Korea, China and India on agricultural trade; about volatility in the labor market for ag, and for a more balanced approach on agricultural regulations.

One of the state’s highest priorities for global exports, he said, is to open up Asia. “There’s an insatiable appetite for beef and pork” in South Korea, China and Japan, and the U.S. needs a fair deal with those countries.

Hickenlooper also made a push for a long-term funding solution for the Colorado water plan. Last month, the governor said he favored a change in how the state collects severance taxes on oil and gas, saying, among other things, that Colorado has the lowest severance taxes on oil and gas in the region.

A court case two years ago with oil giant BP dramatically reduced the amount of severance taxes the state can collect, which has been used in the past to mitigate oil and gas activities in rural communities and to pay for water projects around the state. The state had to take money out of its general fund to pay for the property tax deductions the court decided BP was owed. After that, the state’s share of severance taxes dropped from around $150 to $200 million per year in 2016 to about $25 million last year, Hickenlooper said.

Without a structural change in how severance taxes are levied, he warned, severance taxes could come to an end. “But let’s get a referred measure on the ballot” that will provide a fair tax structure for oil and gas, he said. “It’s a social contract with the state of Colorado. If it were presented properly,” voters would not walk away from it.

That didn’t fly with Senate President Pro tem Jerry Sonnenberg of Sterling, who was in the audience and is president of the board of the Colorado Agricultural Leadership Program, which hosts the annual agriculture forum. Sonnenberg disputed the governor’s claim that Colorado has the lowest severance taxes in the region.

Sonnenberg told Colorado Politics that “we have robbed $400 million from severance taxes” to cover budget shortfalls, including $100 million to pay BP for the lawsuit. “We need to figure out how not to rob Peter to pay Paul,” Sonnenberg added. “If we truly want to do something about severance tax, maybe we add all energy: wind, solar, nuclear and hydroelectric.”

Renewable energy tops 18 percent of U.S. electricity grid, rivaling nuclear

Chron.com (James Osborne):

Solar farms, wind turbines and hydroelectric dams are getting close to surpassing nuclear power plants contribution to the U.S. electrical grid, according to a new report by Bloomberg New Energy Finance.

Last year 18 percent of electrical generation came from renewable energy sources – more than double what they did a decade ago – the report said. Nuclear power plants represent 19.7 percent of the generation on the grid, according to the U.S. Department of Energy, surpassed only by coal and natural gas plants.

“The massive and historic transformation of the U.S. energy sector clicked into a higher gear in 2017, despite some new headwinds including policy uncertainties,” the report entitled “Sustainable Energy in America: 2018 Factbook” read. “Renewable deployment grew at a near- record pace.”

The growth comes even as the Trump administration has curtailed or eliminated restrictions on greenhouse gas restrictions while also trying to expand fossil-fuel production in the United States.

But so far it has done little to turn investors away from renewable energy, which is widely seen as an area of growth in the decades to come as countries try to limit the damage of climate change.

Investment in wind, solar and other renewable technologies totaled $333 billion in 2017, the second highest level on record, according to the Bloomberg report.

The impact on the atmosphere can already be seen. The expansion of renewables, as well as the shift away from coal to natural gas, has sent the nation’s greenhouse gas emissions to their lowest level since 1991, according to Bloomberg.

CU Boulder announces membership in new University #ClimateChange Coalition

Boulder County Solar Contractor Residential Commerical. Photo credit: Flatiron Solar

Here’s the release from the University of Colorado at Boulder:

CU Boulder on Tuesday announced it has joined the University Climate Change Coalition (UC3), a newly formed coalition of 13 leading North American research universities that have united to help communities achieve their climate goals and accelerate the transition to a low-carbon future.

UC3’s initial cohort of member institutions—representing distinguished universities from the United States, Canada and Mexico—formally unveiled the initiative at the Higher Education Climate Leadership Summit in Tempe, Arizona, during a panel discussion that included CU Boulder Chancellor Philip DiStefano.

“With our university partners in UC3, we can meet the challenges of climate resiliency and sustainability,” DiStefano said. “Through leadership and innovation, together we can positively impact humanity now and for generations to come.”

CU Boulder Chief Sustainability Officer Heidi VanGenderen will serve as the primary campus liaison for the UC3 endeavor, working closely with Vice Chancellor for Infrastructure and Safety David Kang, Vice Chancellor for Research & Innovation Terri Fiez and other campus leaders.

For more than half a century, CU Boulder has been a leader in climate and energy research, interdisciplinary environmental studies programs, and engaging in sustainability practices both on campus and beyond. These endeavors fit within CU Boulder’s mission to improve communities through collaborative research, innovation and entrepreneurship.

Campus leaders have set a goal of reducing greenhouse gas (GHG) emissions by 20 percent by 2020 from a 2005 baseline, a 50 percent reduction by 2030, and an 80 percent reduction by 2050.

It is with this blend of history, expertise and determination that CU Boulder will contribute to the efforts of UC3, which aims to foster an exchange of best practices and lessons learned in pursuit of carbon neutrality and greenhouse gas reductions. Together, these institutions have committed to mobilizing their collective resources and expertise to help businesses, cities and states achieve their climate goals.

Two of UC3’s major initiatives in its first year include:

  • Cross-sector forums: Each UC3 institution will convene a climate change summit during the 2018 calendar year to bring together community and business leaders, elected officials and other local stakeholders. Summits will be tailored to the local and regional context and will focus on proven, research-tested policies and solutions that can help communities achieve their climate goals and/or plan for resiliency in the face of a changing climate.
  • Coalition climate mitigation and adaptation report: A coalition-wide report, to be released in late 2018, will synthesize best practices, policies and recommendations from all UC3 forums into a framework for continued progress on climate goals across the nation and the world.
    UC3 will operate in close partnership with Second Nature’s Climate Leadership Network, a group of hundreds of colleges and universities, of which CU Boulder is also a member, that have committed to taking action on climate.
  • Harnessing the exceptional resources and convening power of member institutions, the coalition will work to inform and galvanize local, regional and national action on climate change. Coalition members will bring to these efforts a critical body of expertise in areas including climate modeling, energy storage systems, next generation solar cells, energy-efficiency technologies, smart grids, transportation sector innovations, regulatory and policy approaches, and more.

    In 2015, the U.S.-based members of the UC3 coalition together performed almost a quarter of the environmental research conducted by all U.S. institutions, according to data collected by the National Science Foundation.

    “The research university has played an important role in creating new knowledge, convening thought leadership and serving as long-term community members,” Second Nature President Timothy Carter said. “By applying these strengths to locally relevant climate challenges, we see transformative potential for accelerating climate solutions in these locations in a way that couldn’t happen if the institutions and sectors continued to act on their own.”

    A time of inflection for rural America’s energy paradigms — The Mountain Town News

    From The Mountain Town News (Allen Best):

    Twilight of an energy era as supplier of rural co-ops turns back on coal plant

    This story is adapted from the Dec. 28, 2017, issue of Mountain Town News. Subscriptions are $45 per year.

    In March 2017, a decade after it first applied, wholesale electrical supplier Tri-State Generation & Transmission and its Kansas-based utility partner received approval to build a major new coal-fired power plant at Holcomb, Kan. It will almost certainly never get built.

    The energy world turned upside down in the 10 years between first application and final approval. Electrical demand, rising steadily at the turn of the century, flattened. Prices of other forms of generation, including natural gas and renewables, tumbled. Had the two plants originally proposed been built, they might have displaced older, less-efficient coal-fired power plants. But such plants are built to last 40 years or more.

    If not immediately, the Holcomb plant would have quickly become a stranded asset. Think of the value of a computer purchased in 2007.

    Tri-State still has not formally pulled the plug. A 10Q report to the Securities and Exchange Commission in September noted that the air permit granted by Kansas in March expires if construction does not begin in 18 months. “We have assessed the probability of us entering into construction … as remote,” said the filing.

    The SEC filing reported $93.5 million had been invested in the Holcomb project through 2016, not including land and water. Those costs, said the filing, are “impaired and not recoverable.”

    Ratepayers, most of them in rural areas of four states, will be apportioned the cost. Terms have not yet been defined.

    The ambition to build a coal plant at Holcomb reflected the technology and mentality of an era that now seems past. An August 2017 analysis of the future of coal by the consulting firm MJ Bradley & Associates reported that at least 420 coal-burning units, mostly smaller and older, had been retired since 2010 in the United States. But the fall-off in coal production was far sharper than that. Analyzing Energy Information Administration data, the firm estimated that 80 percent of the decline in coal generation was the result of utilities choosing not to use their coal units.

    If the era of big coal is ending, the future energy paradigms are not entirely clear for members of Tri-State and other co-operatives across rural America. Aside from amenity-laden places with ski areas nearby, rural American has generally not shared the

    prosperity of urban America. That dissatisfaction was evident in the last presidential election. With some exceptions, the ski towns like Crested Butte or broad swathes of northern New Mexico, it was Trump country.

    As a candidate, Donald Trump promised to bring back coal and turn back the environmental regulations of the Obama administration. Repealing regulations is one thing, turning back technology quite another. It’s a wonder he didn’t promise to restore flip-phones or, better yet, rotary phones.

    That comparison is not an idle one. We are at the early stages of a transformation in how we produce and consume energy no less sweeping than those in telecommunications and computers during the last 30 years.

    Only recently have we replaced the incandescent light bulb invented by Thomas Edison with new varieties that are cheaper and far more energy efficient. The business models for delivering electricity have changed very little in the last century.

    This point was made recently by a member of an electrical co-operative in Western Colorado in response to doubts about the technological ability to integrate renewables.

    “I find it hard to think of another industry that has had such a lack of innovation and change for the past 100 years,” said John Gavan, an elected director of Delta-Montrose Electric Association, a co-op serving west-center Colorado. “This sector is extremely ripe for innovation, and there is a huge amount of low-hanging fruit to go after.”

    The question, said Gavan, is whether Tri-State will recognize this shift and react accordingly. If not, “they, too, will be left behind.”

    That’s the question for rural America, too. Even if no plant is built at Holcomb, will the leaders of rural America realize the opportunities for innovation and how those changes can benefit their constituents? Or will they continue to plow money into technologies and business models that have had their day, as Tri-State did for a decade at Holcomb?

    In 2015, signs supporting coal were abundant in Craig, Colo. Photo/Allen Best

    Coal, it kept the lights on

    Tri-State Generation & Transmission is the result of New Deal legislation passed in 1935. Investor-owned utilities had shunned rural areas because of the high cost of transmission and distribution. George Norris, a senator from Nebraska, shepherded the legislation that delivered low-cost federal loans to electrical co-operatives that were created to generate and distribute power in rural areas.

    That legislation still defines the nation’s electrical landscape: 864 electrical cooperatives together provide electricity to 70 percent of the land mass in America, delivering about 11 percent of the nation’s power.

    By the 1950s, rural co-ops were unable to keep up with growing demand from their small towns, farms and ranches. Tri-State was formed by co-ops to transmit electricity from the giant new dams being constructed on major rivers of the West. It also built giant new coal-fired power plants of its own. In time, it became a vertically integrated wholesale provider, owning a coal mine and rail cars. It was in the coal business, not just the business of delivering power.

    By 2006, when the plants at Holcomb were first proposed, Tri-State had grown to include 44 member co-operatives in New Mexico, Colorado, Wyoming, and Nebraska. Demand was growing at 6 percent a year. Even then, there were calls for energy efficiency as a way of reining in demand growth. Tri-State resisted, suggesting that this was better left to member co-operatives. The local distribution co-ops tended not to have the expertise for their own programs. What Tri-State did understand, though, was what had worked in the past: two 700-megawatt coal-fired power plants.

    That squared with the narrative of the Bush administration. In 2001, a Dick Cheney-led energy task force called for a wave of new power plants lest the nation suffer the rolling blackouts that California had experienced in 2000. Utilities responded with proposals for 200 new coal plants.

    A rendering of what was proposed at Holcomb adjoining an existing plant. Source: Sunflower Electric website.

    For its new plants, Tri-State chose Holcomb, located along the Arkansas River in southwest Kansas, about 30 minutes from the Colorado border. It has a railroad, able to deliver coal from Wyoming’s Powder River Basin or, perhaps, from Tri-State’s own coal mines near Craig, Colo. It has water, and it had an existing power plant operated by Sunflower Electric, a smaller electrical wholesaler serving co-ops in Kansas. Estimated costs were $3.7 billion.

    To ensure markets for the new power, Tri-State asked for 10-year extensions of the 40-year contracts. Only 2 of the 44 co-ops refused.

    In western Colorado, directors of Delta-Montrose Electric remembered the fallout of another period of enthusiastic coal-plant building 1979 to 1982. An oil-shale boom that the plants anticipated failed to materialize and the utility that built them, Colorado-Ute, went into bankruptcy in 1991. When that happened, Tri-State picked up Delta-Montrose and other co-ops supplied by the bankrupt utility but also ownership stake in those coal plants at Craig, in northwest Colorado.

    In Northern New Mexico, Taos-based Kit Carson Electric Cooperative also refused the extension. Almost a decade later, in 2016, it finally got a divorce from Tri-State. Another electrical provider, Guzman Energy, paid the $37 million severance fee and pledged to assemble a portfolio heavy in local renewables.

    In Kansas, there was opposition, too. Why did Tri-State want to build its plant in Kansas? After all, Kansas is on a different grid than Colorado and other Rocky Mountain states. The two grids can be bridged, and they are in several places. But there’s additional cost. Given that additional cost, some environmentalists suspected that Tri-State chose Holcomb and Sunflower as its partner with the expectation that the regulatory bar would not be as high in Kansas.

    They were wrong.

    Shocking decision

    In October 2007, Roderick Bremby, secretary of the Kansas Department of Health and Environment, issued a denial that drew national attention. The grounds were believed to be unique at the time: carbon dioxide emissions.

    “It would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing,” Bremby wrote in his decision. Carbon dioxide was not then regulated under the federal Clean Air Act.

    Bremby’s ruling drew fierce response. “Without new coal-fueled plants in our state, experts predict that electric bills will skyrocket and Kansans will be more dependent than ever on hostile, foreign energy sources,” said an ad funded in part by Peabody Coal, a major operator of mines in Colorado, Wyoming and elsewhere.

    Earl Watkins Jr. then the head of Sunflower Electric Power, insisted that two plants, not just one, had to be built, as just one plant was insufficient to meet the needs of Sunflower’s 400,000 customers.

    This claim was made in response to an offer by Gov. Kathleen Sebelius, a Democrat, to allow one plant if the utility committed to developing wind farms and energy conservation programs.

    Kathleen Sebelius

    It was a bruising battle in Kansas, one barely noticed in Colorado. Opponents of the plant remember threats. The split in Kansas was defined primarily by geography. Sebelius enjoyed her strongest support in eastern Kansas, where cities and university towns are located. Sunflower serves western Kansas, a place of wheat fields and oil derricks.

    Three times, lawmakers in Kansas sent legislation to Sebelius that would have removed her administrator’s authority over the air-quality permit. Just as many times she vetoed the legislation. Once, legislators came within a single vote of overturning her veto.

    In her third veto, Sebelius pointed out that Sunflower didn’t actually need as much power as it claimed.

    “Kansas would be creating massive new emissions for power we don’t need,” she wrote. She also noted the recent election of President Barack Obama and his plans to regulate carbon dioxide.

    “What was a bad idea last year is an even worse idea today,” she said. She instead urged legislators to look into new business models for producing power by Kansas wind and other renewables as well as improving energy efficiency.

    One advocate who fought the Holcomb proposal says it was almost like the fight was never actually about energy. Instead, Tri-State’s vertical integration predisposed its solution. “It was like burning coal to make money, not burning coal to make electricity.”

    Finally, in May 2009, Sunflower agreed to a compromise with Gov. Mark Parkinson, the successor to Sebelius. Instead of two plants generating 1,400 megawatts, Sunflower was left with a single, 895-megawatt plant with improved coal-burning technology. These changes pared greenhouse gas emissions from 11 million tons of carbon dioxide a year in the original proposal to 3.6 million tons. The compromise also included a provision for net-metering, allowing producers of wind and solar power to send energy over Sunflower’s lines.

    A penny saved …

    Even then, the energy world had shifted dramatically. Natural gas prices had also tumbled. In Colorado, lawmakers passed legislation outlining a shift from coal to natural gas by the state’s largest electrical provider, Xcel Energy. Underlying the legislation was strong confidence in the abundance of natural gas at low prices.

    Prices of renewables had also started dropping. Utilities were learning to integrate intermittent sources into electrical supplies with greater ease than expected.

    But demand growth had also stalled when the Great Recession arrived. When economic activity picked up, demand for electricity stayed flat.

    This disconnect between economic growth and increased energy use has profound but diffuse consequences.

    Brian Deese photo credit Wikipedia.com.

    At a forum in Colorado during September, former Obama aide Brian Deese recalled informing the president that economic growth had returned without a concurrent increase in energy demand. For decades, economists had been confident that economic growth and energy demand came together, holding hands. When first told the news, Deese related, Obama refused to believe it. Deese rechecked his sources. Indeed, it was a new day in energy, and it still is.

    This day had been foreseen decades earlier by Amory Lovins. Then a scholar at Cambridge who had been fond of loping along on hikes with David Brower of the Sierra Club, he wrote a profoundly influential essay in the October 1976 issue of Foreign Affairs called “Energy Strategy: The Road Not Taken.”

    Lovins—who in 1982 built a passive-solar home at Old Snowmass, near Aspen—argued in that essay that the dominant energy paradigm was a costly mistake. He rejected the assumption embraced by both government and industry that economic growth correlated directly to increased consumption of energy.

    In his essay, Lovins articulated the case for ramped-up energy efficiency, much greater pursuit of renewable energy, and of more local or distributed energy resources. In all this, he argued the case for profit as the driver.

    In the 41 years since then, Lovins has never strayed from his core arguments. At long last, efficiency has begun to take hold. It’s just getting started, he said at a conference in October sponsored by the Center for the New Energy Economy.

    All of this is pertinent to the role of Tri-State and its member co-ops going forward. They’ve been in the business of selling electrons. Lovins argued that it’s the wrong business model. You don’t care how much electricity it took to chill your beer, he said, only that your beer is cold. If utilities made their money on services, not bulk sales, they would operate very differently.

    We’re still coming to grips with the distinction.

    Colorado Green, located between Springfield and Lamar, was Colorado’s first, large wind farm. Photo/Allen Best

    Renewables have continued to tumble. Lazard, which calls itself the world’s leading financial advisory and asset management firm, in early November issued a report about the levelized cost of energy. That is to say, energy costs without subsidies. The report was full of disclaimers. For example, direct comparisons must take into account issues such as location and dispatch characteristics.

    Still, without subsidies, renewables stand on their own very well in this asterisk-ridden comparison sheet:

    On-shore wind: $32 to $62

    Gas combined cycle: $48 to $78

    Coal: $60 to $143

    Nuclear: $96 to $137.

    Solar PV: $46 to $222.

    In future years, solar prices are expected to continue to drop sharply.

    Forward looking

    Tri-State acknowledges a new order to its world, but only begrudgingly so. Telling was the response of Barbara Walz, Tri-State’s senior vice president for policy and compliance, during a panel discussion at the Western Power Summit, an energy conference in October. When Holcomb was proposed, she said, growth in electrical demand by Tri-State averaged 6 percent annually. Now, it has flattened.

    In retrospect, did the Sebelius administration do ratepayers an economic favor by denying the Holcomb power plant on environmental grounds? I asked.

    No, she said, Tri-State needs the ability to plan, she said.

    That sort of dig-in-your-heels resistance plays well in places like Craig, Colo., where Tri-State still operates three coal plants. Early in his campaign, the reality television star Donald Trump spun out his easy message of bringing back coal by “getting rid of job-killing EPA regulations.”

    Craig and Moffat County cast 81 percent of their votes for Trump, a proportion not all that different from the wheat- and corn-growing countries of other parts of co-op country in Colorado.

    Tri-State’s distrust of change contrasts sharply with the strategy of investor-owned Xcel Energy, which operates across eight states, including Colorado, where it does business as Public Service Co. of Colorado. Early in the 21st century, it was also moving briskly forward with the old energy paradigm. In 2004, it reached agreement with environmental groups to push energy efficiency more actively while going forward with a major new coal-fired power plant at Pueblo, Colo. Holy Cross Energy, which serves Aspen and Vail, is a minority investor in that plant and its production. The plant began operations in 2010. It was the last coal plant in the United States to begin operations.

    Xcel Energy proposes to close two of its coal-fired generating units at Comanche, indicated by smokestacks at right. The stack at left, for the plant completed in 2010, provides energy for a portion of Aspen and for the Roaring Fork and Eagle valleys. In the foreground is the largest solar farm east of the Rocky Mountains at its opening. Photo/Allen Best

    But in 2004, Xcel also suffered a defeat in Colorado. State voters approved the nation’s first state-wide renewable energy mandate. Xcel had opposed the mandate but then embraced rising levels of renewables with gusto. Many of the wind turbines erected to meet those mandates are located on land owned by members of Tri-State’s co-operatives.

    In August, Xcel announced it was ready for more. Subject to approval by state regulators, Xcel will close down two aging coal-fired power plants at Pueblo and replace the lost generation with primarily wind and solar, but also natural gas. By 2025, this will push Xcel’s renewable portfolio to 55 percent.

    In making the announcement, David Eves, chief executive of Public Service Co. of Colorado, said the fuel switching is expected to result in rates that will be no higher and could be lower than existing rates.

    Several months later, at the Center for the New Energy Economy conference, Eves spoke to the rapid changes in the business of generating and delivering electricity. “It’s here, it’s happening faster and faster. We don’t know where it will go,” said Eves. “This is very different than even five years ago.”

    Xcel has its critics. It’s like Tri-State in a fundamental way in that it wants to preserve its role as the energy provider. The difference is on the margins. It recognizes that a new day has arrived. It is experimenting with microgrids and increased use of demand-side management programs. In short, it is a ballroom dancer compared to the heel-heavy stance taken by most co-ops and their wholesale suppliers, including Tri-State.

    Electrical co-ops have no oversight from state regulators and, if in the case of Tri-State, no oversight from federal regulators if federal loans have been paid. The sole oversight comes in cases that go before the Federal Energy Regulatory Policy.

    Not all co-ops have been so devoted to coal and so resistant to change.

    For the last decade, Holy Cross Energy has been carving a somewhat different path. Based in Glenwood Springs, the co-operative serves the Aspen and Vail areas but also the Grand Valley to Rifle and Battlement Mesa. It has its feet in both renewables and coal-fired generation at Pueblo.

    Earlier this year, directors from the Vail, Aspen and Glenwood Springs areas plucked a new manager, Bryan Henegan, from the National Renewable Energy Laboratory. Among his work there, he co-founded the Integration Laboratory, described as the place where all the technologies and business models are coming together.

    At the annual conference of the Colorado Rural Electric Association on Oct. 30, Henegan—who has a doctorate—showed charts about cost and cumulative capacity for wind utility-scale and charts for LED adoption, expanding electric vehicle sales and declining battery costs and other manifestations of this evolving transformation in energy.

    None of these models showed new coal-fired power plants.

    Somewhat surprising, perhaps, Xcel, Tri-State and Holy Cross may start sharing electrical generation in the future. They have been operating their own electrical systems, in a somewhat Balkanized manner. This is true of most the West altogether. Elsewhere in the country power supplies are pooled into regional markets, to more efficiently match supplies of lowest-cost electricity with demands. Lately, power providers in the Rocky Mountains have been talking about joining the Southwest Power Pool, helping distribute electricity most efficiently and most economically. This is considered one way to move around low-cost renewable energy most efficiently.

    Even in rural areas, change is coming.

    Some foresee a reordering of the power around power. Instead of being passive consumers of power, farmers, ranchers and others can be producers, too. This is distributed generation but also it’s part of a broader concept called the democratization of energy.

    This idea, not unique to rural areas, should perhaps also be overlaid with the concept of resilience. Both should play well to red-state, libertarian and conservative America.

    This is a time of inflection, of change. It’s just not clear where this story about energy models will bend and what role it may play in our Grand Canyon-sized national political divisions.

    A center-pivot sprinkler near Wray, Colo. Photo/Allen Best

    Rhetoric and reality

    Ultimately Holcomb should be seen as an early episode in what will be an extended last-gasp effort by fossil fuel interests to extend their future just a few decades longer. The presidency of Donald Trump is part of that.

    Consider the Trump administration proposal in October to prop up failing coal and nuclear power producers with a $10.6 billion bailout through surcharges on the monthly energy bills of ratepayers. The presumed goal was to ensure security against power outages. But as analysts were quick to point out, only a tiny, minuscule percentage of shortages on the nation’s electric grid are due to fuel supply problems. Instead, power outages are almost entirely the result of distribution-level problems, like poles falling over.

    Whether that plan goes forward is still to be determined. But note how contrary it is to the principle of competition and open markets that Trump and his supporters have heralded. However, it does coincide with Trump’s vow to bring back coal. The Associated Press reveals communication by coal-producer Robert Murray in which he made a desperate plea for just such help. Murray owns coal mines in Utah and elsewhere.

    Rhetoric does not match reality. Republican leaders continue to recite messages taken from their talking-points of a decade ago. Perhaps some actually believe what they say. It seems more to be out of political expedience, a way of telling their followers want they want to hear, not what they need to hear.

    The remarks last summer of U.S. Senator Cory Gardner come to mind. He still lives in the same town he grew up in, Yuma, located in Colorado’s northeastern corner, a region almost exclusively served by co-ops and also a region where counties gave up to 85 percent of their votes to Trump last year.

    Gardner, at an oil-and-gas conference in downtown Denver, noted that he had supported wind energy in the past but then warned against over-reaching of renewables to the detriment of people on fixed incomes or of farmers irrigating corn and alfalfa fields.

    “You don’t have to go so far as to cause economic collapse,” he said.

    But is exactly the reverse the greater worry: That by failing to take advantage of new technologies and business models, will the poor and the giant irrigators be hurt?

    In this, as in other things, have facts become useless, to be discarded if they don’t fit the narrative? Trump’s campaign illustrated how little facts actually mattered. Whether tax cuts for the wealthiest of Americans or health care, facts get run over by the bus of narrative. It’s a narrative that Trump rode to the White house by corralling the electoral votes of farm country allied with the rust-belt regions.

    Gardner maintains a home in Yuma, the town of his origin. It’s along Highway 34, which crosses the Continental Divide in Rocky Mountain National Park 300 miles to the west. It’s also along the Republican River.

    George Norris

    In McCook, Neb., two hours downstream along this same river and highway, is a memorial to the George Norris, the Senate sponsor of the legislation in 1935 that yielded the electrical co-ops. He was called the last of the progressive Republicans.

    Rural America needs a George Norris or three today, politicians who can look forward, not pay mindless tribute to those things of the past that were never good or have outlived their usefulness. Greenhouse gas emissions pose a real economic and social risk. New technologies have come along to compete with those of old.

    Co-ops were created to serve the interest of their members/customers. There’s a good question whether they still do. In an essay published circa 2008, U.S. Rep. Jim Cooper, a Democrat from Tennessee, made his skepticism large in his title: “Electrical Co-operatives: From New Deal to Bad Deal?

    In McCook, Neb., two hours downstream along this same river and highway, is a memorial to the George Norris, the Senate sponsor of the legislation in 1935 that yielded the electrical co-ops. He was called the last of the progressive Republicans.

    Rural America needs a George Norris or three today, politicians who can look forward, not pay mindless tribute to those things of the past that were never good or have outlived their usefulness. Greenhouse gas emissions pose a real economic and social risk. New technologies have come along to compete with those of old.

    Co-ops were created to serve the interest of their members/customers. There’s a good question whether they still do. In an essay published circa 2008, U.S. Rep. Jim Cooper, a Democrat from Tennessee, made his skepticism large in his title: “Electrical Co-operatives: From New Deal to Bad Deal?”

    Tri-State may have moved on from giant coal plants at Holcomb, but the larger question is whether it will help its member co-ops move briskly into the future of microgrids and other cutting-edge, decentralized technology.

    As Gavan, the director at DMEA, the co-op long at odds with Tri-State said recently, Tri-State will have to change or cease to be relevant.