Tuesday, July 12, 2016

Tri-State Generation and Transmission tries hobbling LPEA's renewable energy options

I submitted a column to the Four Corners Free Press for their July issue reporting on La Plata Electric Association's board of directors considering the forfeiture of their future negotiation rights on renewable energy projects to notoriously renewable energy hostile Tri-State Generation and Transmission.

Researching that column I came upon many informative articles that I didn't have the space to credit, so I've decided to collect the better ones and share a few key quotes from each for easy reference. 

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June 14. 2016
By Jessica Pace Herald staff writer
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June 15. 2016
By Jessica Pace Herald staff writer
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6/15/2016 - LPEA Statement
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June 21, 2016
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February 18, 2016
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July 10, 2015
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April 2, 2015
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June 19, 2009

June 14. 2016
La Plata Electric Association to consider waiver Wednesday
Approval would extend negotiating authority to main power supplier

By Jessica Pace Herald staff writer

On Wednesday, the La Plata Electric Association will consider a waiver that would allow the cooperative’s main supplier, Tri-State Generation and Transmission Association, to take the lead on negotiating with outside energy developers.

LPEA staff support the proposed waiver, saying it will streamline the process with developers because Tri-State has negotiating expertise, without precluding LPEA from investing in local, renewable-energy projects. …

June 15. 2016
LPEA delays controversial waiver vote again
Board waiting on decision from energy regulatory commission

By Jessica Pace Herald staff writer

In lieu of making a decision in advance of a pertinent Federal Energy Regulation Commission ruling, the La Plata Electric Association on Wednesday tabled a vote on a waiver involving its primary power provider.
Tri-State tries hobbling LPEA renewable energy development.  

Tri-State Generation and Transmission, from which LPEA purchases 95 percent of its power, proposed the waiver, which would give Tri-State authority to negotiate with qualifying facilities.

Qualifying facilities are generating facilities that offer power at special rates and meet standards defined under the Public Utility Regulatory Policies Act. They are often local, renewable energy sources.

The proposed waiver came in response to a dispute that arose last year between Tri-State and one of its member cooperatives, the Delta-Montrose Electric Association, over whether the cooperative can purchase power from qualifying facilities. The federal commission found that DMEA could do so, but it has not ruled on whether Tri-State is entitled to recover from the cooperative costs lost as a result of the qualifying facility.

That decision is expected to come next week, and may bear on the LPEA board’s decision to support or oppose the optional waiver. The board agreed to take up the issue at its July meeting with more discussion. …

La Plata Electric Association’s official statement:
LPEA Board adopts wait-and-see of Qualifying Facility waiver -

Time to be taken to further understand pros and cons of issue

Following extensive member input and discussion, the La Plata Electric (LPEA) Board of Directors today decided to table Resolution 2016-07 and revisit the issue during the July board meeting. The resolution would have authorized LPEA to sign the Qualifying Facility (QF) waiver, which would require LPEA’s primary power supplier, Tri-State Generation and Transmission (Tri-State) to negotiate directly with a QF for purchase of the renewable electricity generation. 

“We may make a decision next month, we may make a decision in six months, but we don’t want to make a decision until all board members thoroughly understand the QF waiver,” said LPEA Board President Davin Montoya.

The LPEA board received an overview of the QF details during the board meeting, and has a scheduled Strategic Planning Session during which the QF waiver will be further discussed. (The PowerPoint presentation has been posted to the LPEA website for member review. Click here to view.)

A Qualifying Facility, which by definition generates electricity from a renewable resource, is granted QF status by the Federal Energy Regulatory Commission (FERC) and receives special rate and regulatory treatment under FERC’s Public Utilities Regulatory Policies Act (PURPA). The central goal of PURPA is to facilitate renewable generation.

LPEA, a Touchstone Energy Cooperative established in 1939, provides to its more than 30,000 members, with nearly 42,000 meters, safe, reliable electricity at the lowest reasonable cost, while being environmentally responsible. For additional information, visit www.lpea.coop.

Tri-State Generation and Transmission in their own words:

Tri-State Generation and Transmission Association is a wholesale electric power supplier owned by the 44 electric cooperatives that it serves. Tri-State generates and transmits electricity to its member systems throughout a 200,000 square-mile service territory across Colorado, Nebraska, New Mexico and Wyoming.

Serving approximately 1.5 million consumers, Tri-State was founded in 1952 by its member systems to provide a reliable, cost-based supply of electricity. Headquartered in Westminster, Colo., nearly 1,500 people are employed by Tri-State throughout its four-state service area.

Tri-State’s power is generated through a combination of owned baseload and peaking power plants that use coal and natural gas as their primary fuels, supplemented by purchased power, federal hydroelectricity allocations and renewable resource technologies. ...

March 8, 2016
FERC case re DMEA - Tri State renewable generation dispute

Delta-Montrose Electric Association in western Colorado received a ruling from FERC about a year ago saying that DMEA, a distribution coop, was obligated to buy power from Qualifying Facilities.  Now DMEA's G&T, Tri-State, has filed a request with FERC that would approve them to charge a rate penalty on DMEA if they buy QF power. …



¥ What’s the issue? Last week, DMEA’s power supplier, Tri-State Generation & Transmission, filed a request with the Federal Energy Regulatory Commission (FERC). Tri- State wants FERC to approve a rate penalty on utilities like DMEA when they buy energy from local renewable projects.

¥ What would this mean for Delta and Montrose counties? Tri-State’s rate penalty would make purchases from renewable sources uneconomical. This threatens not just local renewable generation, but also the tremendous economic development that comes with it. 

¥ Didn’t FERC already say DMEA must buy from local renewable sources? Yes. In a 2015 ruling, FERC said that DMEA must buy from renewable generation projects under a federal law called “PURPA” (the Public Utilities Regulatory Policy Act). Tri-State’s new request to FERC would essentially undo FERC’s 2015 ruling. 

¥ What is PURPA? Congress passed PURPA in 1978 to promote competition in generation and to support the development of local, renewable generation projects. PURPA requires utilities like DMEA to buy from local renewable generation projects (called “qualifying facilities”)—regardless of whether those purchases are permitted under the utility’s power supply contract (such as the one DMEA has with Tri-State). 

¥ What specifically is Tri-State requesting? Tri-State agrees that PURPA requires DMEA to buy from renewable generation projects, but wants to charge DMEA a penalty for revenue that Tri-State “loses” when DMEA buys energy from these projects instead of buying from Tri-State. 

¥ What is DMEA’s position on Tri-State’s request? DMEA believes that FERC regulations prohibit these “lost revenue” penalties under the type of partial requirements purchase contract that DMEA has with Tri-State. If FERC approves Tri-State’s penalty, it will stop any new renewable generation for DMEA members and will deprive our economy of jobs and millions of dollars in economic development.


June 21, 2016
New Ruling Opens Up 400 GW Renewables Market

FERC confirms that co-ops can buy unlimited power from PURPA-qualifying facilities

Delta-Montrose Electric Authority (DMEA) is not only responsible for keeping the lights on and the books in the black. As a member-owned rural electric cooperative in southwest Colorado, DMEA is also responsible for living up to the seven cooperative principles, including principle 7: concern for community

So when hundreds of Delta County residents were laid off in a series of coal-mine closures, DMEA staff and leadership were looking for ways to meet their fiduciary responsibilities while also staving off an economic downturn. One obvious source of economic development was local renewable power. Nestled at the base of the Rocky Mountains on Colorado’s Western slope, Delta and Montrose counties are blessed with abundant sunshine and swift streams, rivers, and irrigation canals.

The majority of DMEA’s power comes from Tri-State, a Denver-based cooperative that provides generation and transmission services to 44 distribution co-ops in five states. The long-term contract with Tri-State allows DMEA to self-generate up to, but no more than, 5 percent of the co-op’s annual electricity use. In 2015, DMEA already sourced just under 5 percent of its electricity from local hydroelectric and solar, and therefore, when DMEA wanted to green its energy supply, reduce energy spend, and promote local economic development, the co-op was constrained in its options. 

DMEA took the matter to the Federal Energy Regulatory Commission (FERC), which confirmed last Thursday that DMEA can source local and renewable electricity beyond its 5 percent self-generation limit by signing power purchase agreements with independent power producers. The ruling has major implications for the nation’s 905 electric cooperatives and 830 municipal utilities as well as the for-profit and nonprofit generation and transmission providers that serve those co-ops.


FERC’s Thursday ruling clearly rejected Tri-State’s petition, stating:
Tri-State’s petition would effectively undo Delta-Montrose’s statutory obligation to purchase from QFs and correspondingly limit QFs from selling power to Delta-Montrose at negotiated rates.
—FERC, June 2016 Commission Meeting Summaries


     1. Distribution co-ops and municipal utilities are no longer constrained in their ability to source cost-competitive local power
     2. G&Ts need to embrace a distributed energy future

The FERC ruling has opened up a huge potential distributed renewable energy market. Renewable energy buyers and sellers both have a role to play in enabling this market to achieve its full potential. 

Co-Ops and munis need to educate themselves on their options: Many co-ops and munis have great opportunities to competitively procure low-cost distributed renewables. They should educate themselves on current prices for solar and wind, third-party ownership options (e.g., PPA), self-generation laws, and policies at the G&T, state, and national levels. Now that renewables can be procured cost competitively, co-op staff and boards have an obligation to their members to educate themselves on renewable energy options.

Developers need to offer straightforward prices and system packages: Often developers contribute to buyer confusion by offering opaque or confusing prices for community-scale renewable resources. Developers can grow revenue, decrease customer acquisition costs, and better access the market by creating standardized packages and pricing options. 

Developers and buyers together need to come together to minimize system cost: Buyers and sellers both play a role in decreasing the total cost of community-scale solar. They share cost-reduction levers and can effectively come together to reduce cost through things like effective contracting, rational delineation of development activities, volume aggregation, and lean system design. ...


February 18, 2016
DMEA Opposes Effort to Limit Local Renewables

Yesterday DMEA learned that its wholesale power supplier, Tri-State Generation & Transmission Association, filed a legal action that threatens DMEA's efforts to bring renewable generation -- and the possibility of tremendous economic development -- to DMEA's service territory. Tri-State's February 17 filing before the Federal Energy Regulatory Commission (FERC) in Washington, D.C., asks FERC to approve a rate penalty on utilities like DMEA when they purchase electricity from local renewable generation projects. 

DMEA is obligated by a 1978 federal law called PURPA (the Public Utilities Regulatory Policy Act) to buy energy from local renewable generation facilities. In 2015, DMEA obtained a ruling from FERC that these renewable purchases were required -- not withstanding contrary provisions in DMEA's partial requirements power supply contract with Tri-State. 

Tri-State's filing yesterday with FERC essentially seeks to undo this ruling. …


July 10, 2015
FERC Removes Obstacles that Limit Distributed Renewable Energy in Colorado

 In a July 1 ruling FERC (the Federal Energy Regulatory Commission) cleared the way for Colorado’s Delta-Montrose Electric Association (DMEA), along with other electric co-ops, to step outside the bounds of a 40-year power supply contract with Tri-State Generation & Transmission Association and tap into local renewable energy supplies. FERC’s ruling, which was unanimous, clarifies what had been deemed unclear wording in PURPA (Public Utilities Regulatory Policies Act), as well as Tri-State’s regulatory status.

The contract DMEA and 43 other electric co-ops had signed with Tristate in 2001 required them to purchase 95 percent of their electricity from Tri-state. In short, FERC ruled that as per PURPA DMEA not only had the right but the obligation to purchase electricity directly from “Qualifying Facilities” (QFs) over and above the five percent cap it’s limited to in its contract with Tri-State.

With the ruling, FERC opened the door for DMEA and other Tri-State electric co-op members to tap into cost-competitive renewable energy resources right in their backyards. DMEA intends to move forward and contract for electricity from a small-scale hydropower facility to be built on a local irrigation canal proposed by Percheron, DMEA’s Manager of Member Relations and Human Resources Virginia Harman said.

Greater Use Of Local Renewable Power

Enacted in 1978 as part of the National Energy Act, PURPA promotes development of cost-effective small-scale hydropower and other renewable energy resources, as well as energy conservation and energy efficiency, FERC explained on its website. Under PURPA, public utilities are obligated to purchase electricity generated by certified QF as long as they total no more 80-MW of electrical power capacity. PURPA QFs receive special rates and regulatory treatment.

“Community support for DMEA was overwhelming,” Harman pointed out. More than 70 individuals and organizations, including coal companies, as well as the NRDC (Natural Resources Defense Council) and the Aspen Skiing Company, supported DMEA’s FERC petition.

DMEA CEO Jasen Bronec said that FERC’s ruling “is a victory not just for DMEA and its members, but for people and communities throughout Delta and Montrose counties. Purchasing local renewable power will further DMEA’s long-term strategic goal of diversifying our power supply, which means more stable rates to our members and lesser impacts from any future power rate increases. ...

April 2, 2015
A rural utility bucks against its power supplier
In a coal-producing region, this western Colorado co-op fights for renewables.

The relationships between rural energy co-operatives and the utilities that provide their power are usually pretty subdued. Like partners in a long and stable marriage, they mostly understand each other and few disputes make it out of the boardroom. 

But earlier this year, it became clear that things have deteriorated between Delta-Montrose Electric Association and its provider, Tri-State. The two have quietly—and not so quietly—been at odds for years over whether Delta-Montrose, a rural electricity cooperative based in Montrose, Colorado, could go outside their relationship to generate some of its own power. Finally, in February, Delta-Montrose called on federal regulators to resolve the dispute.

On Feb. 9, Delta-Montrose filed a petition with the Federal Energy Regulatory Commission (FERC), which regulates much of the nation’s energy transmission. 

In it, Delta-Montrose asked for the commission to clarify federal law, which could require Tri-State to loosen the ties that bind. Delta-Montrose is allowed to get a small fraction of its power—five percent—from a provider besides Tri-State. But it would like to sign up with a company hoping to construct a small hydro project. …


June 19, 2009
Growing Away from Big Coal
Rural electric co-ops make a slow push back toward community energy

Last month, a new type of farm sprouted in Brighton, Colo. United Power, the rural electric cooperative that serves the town and a large swath of communities and agricultural lands on the state's northern Front Range, unveiled what's been touted as the nation's first cooperative solar farm. Customers can "rent" one or more of the 48 panels in the 10-kilowatt array for $1,050 apiece, for a 25-year period. In return, United Power credits their monthly utility bills for the power their panels generate. Other electric co-ops see this project as a possible prototype: a way to distribute local renewable energy without forcing customers to pay for the equipment or its installation. "People can even come visit their solar panels," says Troy Whitmore, United Power's director of external affairs. "And the sky's the limit as to how many modules we can have, depending on demand."

Until recently, co-ops like United Power were unlikely to dream up projects like this. Co-op culture has a long history of conservatism. And United Power and 43 other co-ops in Colorado, New Mexico, Wyoming and Nebraska are locked into long-term power purchase contracts with the electricity wholesaler Tri-State Generation and Transmission. The utility has a reputation for being pro-coal and dismissive of renewable energy projects, which it has generally considered too costly and unreliable. And Tri-State's purchase contracts limit the amount of electricity member co-ops can own and control to 5 percent of their energy load. In effect, this has prevented co-ops from investing much in local and renewable power on their own.

But over the last couple years, …


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