Challenging the status quo for rural utilities

Colorado’s electric cooperatives, the utilities that provide electric service to Colorado’s rural communities, are bravely re-imagining their future and challenging the status quo. Today, nearly 1.5 million Coloradans are customers of those cooperatives who purchase their wholesale power from TriState Generation & Transmission.

After years of investments in fossil fuels and more than $3 billion in debts, Colorado’s electric cooperatives are forced to buy expensive, polluting energy with little flexibility to make changes to their power sources. As of 2017, Tri-state’s electricity mix was still close to 60 percent coal and gas. The recent announcement by Tri-state to start a progressive retirement of coal power and replace it with renewable energy is not quick enough and does not pass on the benefits through lower costs.

Several cooperatives, led by La Plata Electric Association and United Power, are asking Tri-state and regulators to allow them to buy out of their contracts so they can pursue an independent and more environmentally responsible energy future. In a time of economic uncertainty, reducing cost for their customers is all the more critical. LPEA and United have presented an existential choice to their customers and the other cooperatives that serve rural Colorado:

Should we stay with TriState or forge our own path?

Each of the 42 Tri-state utility members across Colorado, New Mexico, Wyoming, and Nebraska will make the choice that is right for their communities. Today’s modern options for electricity supply will allow any community in these states to create a new energy future that is reliable, clean, and less expensive. New options will allow rural communities to decide on the kind of energy that they want and, in particular, build local projects.

Looking from the sidelines, it seems that changing the status quo is not easy. Arguments are made that if cooperatives exit their system and get their energy elsewhere, Tri-state will become insolvent, and that both their remaining customers and those customers of cooperatives that exit will face a chaotic uncertain energy future that threatens reliability, affordability, and ultimately the economic vitality of these communities.

Change is hard, but it is also possible … and affordable. The legacy contracts and the debt associated with the older coal and natural gas plants that should be fully amortized by now should not stand in the way of a better solution for members cooperatives and their rural communities. Well capitalized and experienced renewable energy owners are ready to provide cleaner and more affordable energy solutions.

Our company, Capital Dynamics, owns and operates more than 7,500 MWS of predominantly renewable generation across the United States with $6.5 billion assets under management. We already own and operate one of the largest utility-scale solar projects in Colorado. We are also building two distributed generation projects, one for a low-income housing authority and one for a university. We are ready to invest much more in Colorado.

Cooperatives and communities could benefit from locally sited solar and energy storage projects to not only increase the reliability for the communities, but also providing additional economic benefits and tax base through sales taxes, job creation, and property taxes.

United Power and LPEA deserve a public commendation for their work to create an equitable path to pursue their own energy future, for their customers, and for all the other electric cooperatives that may follow in their path. We urge decision makers to support these cooperatives for the benefit of their members and help Colorado transition to a green economy.

Andrew Heinle is the executive vice president of origination for Arevon Energy, an affiliate of Capital Dynamics Clean Energy Infrastructure Platform.