PUC urging Tri-State to move into 21st century

Environment Colorado

DENVER – The Colorado Public Utilities Commission questioned officials from Colorado’s second largest electricity provider Wednesday on their commitment to incorporating clean energy into the company’s resource plan and to realistically planning for the significant costs of climate protection.

The PUC, which is responsible for issuing permits for new power projects in Colorado, opened a docket and held a public hearing to discuss how Tri-State Generation and Transmission will generate power and transmit it to its 44 member electric cooperatives in four states,18 of them in Colorado.

Commissioner Matt Baker noted that much of Tri-State’s service territory contains some of the best renewable resource potential in the country and that other power providers are aggressively pursuing them.

“Right now, Xcel (Energy) and the developers working with them are going out into your territory” and laying claim to those resources, Baker said.

Like other utilities across the country, Tri-State is trying to meet increasing demands for electricity. Unlike many of them, Tri-State’s plans for new sources of energy hinge on the construction of a new coal-fired power plant, or perhaps nuclear as a secondary option.

“Tri-state’s service territory contains some of the best wind and solar resources of any area in the country,” said John Nielsen, the energy program director at Western Resource Advocates. “The company can and should be a key player in moving Colorado toward a new energy economy.  Unfortunately, Tri-state’s resource plan still relies heavily on old-style coal plants to meet new energy demands.” 

The company continues to push forward in trying to build a coal-fired power plant near Holcomb, in western Kansas. Tri-State would own and operate one of the project’s two 700-megawatt units. Last October, the secretary of the Kansas Department of Health and Environment denied a permit for the facility based on the danger its carbon dioxide pollution posed for Kansans. Tri-State and its partners have filed several lawsuits to overturn the denial.

Although it has yet to begin a formal permitting process, Tri-State also has proposed building a power plant in southeastern Colorado and already has acquired sufficient water rights – around 20,000 acre-feet – for such a project.

“There is a cleaner, more reliable and more economically beneficial way to generate electricity in the 21st century,” said Pam Kiely, the legislative director of Environment Colorado.  “By embracing energy efficiency and clean energy, Tri-State could reduce demand for electricity, avoid costly construction of a new dirty power plant. That would save cooperative members money on their utility bills. Hopefully the PUC can help them get there.”

Part of the PUC’s mission as the state’s utility regulator is to ensure that Coloradans have safe, reliable and affordable services. An implicit part of that task hinges on shaping efficient coordination between utilities.

The PUC also is working with Xcel energy, Colorado’s largest power provider, on its plans to add 1,000 new megawatts of wind and solar energy and to cut demand by more than 600 megawatts –the output of an entire power plant – by investing hundreds of millions of dollars in efficiency programs. Xcel also has committed to reducing its CO2 emissions 20 percent below 2005 levels by 2020, and will close two older coal-fired power plants as part of that effort.

Tri-State, meanwhile, is betting largely on coal, which prompted inquiries from the PUC about: 

  • Its energy- and demand-forecasting methods.
  • Changes to its resource plan, particularly replacements for the deficit left by the rejected Holcomb project.
  • Investment and planning in clean energy resources.
  • Improving energy efficiency.
  • How its resource plan incorporates the impact of pending climate change regulations.

Due to the national attention brought by the Kansas decision, a number of reports already have analyzed some of those issues. Researchers at Lawrence Berkeley National Laboratory, for example, found that while most Western utilities are opting for substantial amounts of renewables and efficiency in response to the financial risks of climate legislation, Tri-State is not. In fact, of the 16 utilities researchers looked at, they determined that Tri-State’s embrace of coal and minimal investment in clean energy gave it the single most carbon-intense energy portfolio.

“As a member ratepayer of one of the rural cooperatives that Tri-State serves, I’d really like to see them be more aggressive on clean energy and efficiency,” said Steve Schechter, a Gunnison County Electric Association ratepayer. “If we continue down the road we’re on, customers are going to suffer the economic consequences of bad decision-making.”

New York investment advisement firm Innovest came to the same conclusion in a financial analysis of Tri-State’s partner in the Holcomb project. Innovest determined that climate legislation could add between $22 million and $54 million annually to Sunflower Electric’s operations, making “the risks outweigh the potential benefits” of coal. It said Sunflower “failed to account for likely regulatory scenarios, and will therefore expose its ratepayers to the significant financial exposure associated with a strategic focus on developing new coal capacity.”

“Having the PUC involved is a great opportunity both for Tri-State and for the co-op members it serves,” said Roger Alexander, a Poudre Valley REA ratepayer. “A more forward-thinking plan will help us save money, reduce our energy use, create more opportunities to develop local sources of renewable energy. We hope Tri-State embraces this process and steps up to the plate.