Tri-State has just announced their plans to build the second largest solar array in the state of colorado! This project (known as spanish peaks) will double their solar generation capacity. Tri-state Already produces more solar energy than any cooperative in the nation and this move will add an additional 100mw to their renewable mix.
The most controversial topic going on at LPEA is about breaking the long-term contract with Tri-State G&T.
Critics of the Tri-State contract like to make erroneous claims, such as the % of coal used for generation
They also like to say that we we need more “choice” and “flexibility” for local generation
But they seem to always disregard the truth about Tri-State
Here are some facts.
- Tri-State is an extremely reliable generation source, outages from Tri-State are practically nonexistent
- They are currently working to help bring more renewable projects online
- Tri-State already produces over 30% renewables from their asset portfolio
- They are also the largest G&T provider of solar energy in the country
- Tri-State closed one coal fired plant last year, with two more closings scheduled in the near future
- The flexibility and choice currently exist, its just not as profitable for third party investors
And so what about the buyout?
- Just to request a buyout valuation for LPEA will cost a minimum of $250,000
- The estimate for breaking the contract with Tri-State is currently between $400-$700 million
- Even with an attractive rate, the interest alone could force LPEA into bankruptcy
- This number is only to break the contract, it includes no assets, and no future power
- But if the contract is broken, the $75 million in assets LPEA owns with Tri-State will be forfeited
- Then, power bought on the spot market would need to be brought in over Tri-State’s transmission lines (called “wheeling”)
- There are significant costs associated with this service.
- Also the LPEA will have even further costs to keep the lines up to Federal Regulations, costs currently mitigated by Tri-State.
Then we would still have to buy power on the open market.
- Currently we are buying power from Tri-State at a rate of 7.4 cents per kWh
- Utility scale Solar is currently being produced at 4 cents per kWh but that is AT THE SOURCE
- To transmit that energy, it would cost at least an additional 2 cents per kWh
So, the people on the board (and running to be on the board) want to break the Tri-State contract to theoretically “save” roughly 1.4 cents per kWh? And again, that’s just for the actual energy itself, BEFORE: the extra cost of breaking the contract, the interest on a loan of that size, the cost of use of Tri-States’s lines and equipment, the costs of paying people to keep LPEA current on Federal regulations, AAAND the extra retail cost of getting that power to us.
Oh, and did I mention, we have equity in Tri-State and breaking the contract would drastically mess with our balance sheet? We would go from a position of $75 million asset to an additional (minimum) $400 million liability.
The main reason Shaw Solar, San Juan Citizens Alliance, and others, are pushing to break the contract is because written into the current contract, LPEA can purchase up to 5% of its power locally. They are wanting to do more “local” energy. Which sounds great, but in reality these are for-profit companies (or non-profit organizations that protect the positions of these companies) and will benefit greatly from increased local generation and pass on any loss in revenue to you, the member, before suffering those losses themselves.
The recent vote to raise the 5% to 10% could have changed the dynamic in theory, but it would have likely meant a substantial rate increase on member’s electric bills. For this reason alone, Director McInnis voted against the LPEA’s decision.
Under policy 118, we could produce as much local renewable energy as we wanted, it just wouldn’t benefit third parties. There are some Directors (ie Britt Bassett) that have personal investments in local solar gardens and want to profit even more.
READ THAT AGAIN…
Directors like Bassett, who have personal investments in local solar gardens, WILL profit greatly from increased local generation, and even more from a break in the contract. Many of the people who want to sway your vote, are doing so in order to line their own pockets
But most importantly, we have to think about the reliability of our power.
Little known fact- solar doesn’t produce very much power in the dark (peak usage times) and a sufficient power source is necessary to fill the gaps. You don’t have to be a nuclear engineer to know that bullshit smells the same everywhere you go.
Also, if the LPEA does not have the financial stability they do now, and are forced into buying power on the retail market, the reliability of our power will be uncertain.
The progressive candidates say they want local renewable energy but members are spending in excess of $900,000 to subsidize the more affluent members to get free electricity via rooftop solar. If renewable energy is really cheaper, why is it being subsidized?
This will clearly not be good for LPEA, it’s members or our area, especially since over 3600 members currently cannot afford their monthly electric bill. What will that do to those members if rates go up even more?
Breaking the contract with Tri-State is a lose-lose situation. It only benefits those who have a vested interest in local solar and LPEA members will suffer the consequences of this one sided money making opportunity…