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.
