Opinion: Delta Montrose Electric joins KCEC in leaving Tri-State Generation

By Luis Reyes
Posted 8/7/19

On behalf of Kit Carson Electric Cooperative, I would like to congratulate Delta Montrose Electric Association on its successful settlement agreement with Tri-State Generation and …

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Opinion: Delta Montrose Electric joins KCEC in leaving Tri-State Generation

Posted

On behalf of Kit Carson Electric Cooperative, I would like to congratulate Delta Montrose Electric Association on its successful settlement agreement with Tri-State Generation and Transmission. DMEA has just entered a world of exciting, affordable and transformative new power supply options. This may not mean much to many people, but speaking from our positive experience, the results have the potential to have incredible benefits to the communities and citizens in DMEA's territory.

KCEC took this leap almost three years ago, separating from Tri-State through a similar settlement process. Our members were demanding cleaner, more affordable energy and some of our larger customers were even thinking about pursuing other power supply options or leaving our community altogether. Under our previous contract, KCEC did not have the ability or flexibility to develop our own renewable resources at a scale to meet our members' needs and we saw our rates continue to increase year after year. Our exit from Tri-State opened a world of opportunity and uncertainty, but we found a partner in Guzman Energy to help us successfully navigate the transition, set energy priorities and goals, and develop power supply solutions to meet our members' needs.

As is well documented at this point, our agreement with Guzman Energy included a six-year payback period of the exit charge we paid to Tri-State. We have faced a lot of criticism and skepticism but now, halfway through that payback, the reality is that we are and will continue to be a much better, stronger electric cooperative and the communities in our service territory are more economically competitive to attract and retain businesses as well. After the next three years, we are forecasting that our wholesale rates will decrease by as much as 40 percent.

One of the first actions we were able to take was to set a goal of powering our community with 100 percent solar energy in the daytime by 2022. To do this, we created an energy roadmap that included up to 35 megawatts (MW) of small solar arrays throughout our communities supported by several battery storage projects. Today, we have 10 MW on our system with an additional 6 MW at three sites in the works and scheduled to be complete by the end of the year. This puts us halfway to our goal, right on schedule.

The benefits of having a creative and flexible power supply partner like Guzman Energy go beyond having cleaner, more affordable energy on our system. The economic development opportunities have been far-reaching. We are using local labor for all of the solar and storage development, resulting in more local jobs and an estimated $1.1 million dollars per MW built in direct and indirect benefits through wages, leases, restaurants and both gross receipts tax and property tax in our communities. This local development, including a 1.5 MW array on-site, supports the revitalization of the El Rito campus of Northern New Mexico College and the return of technical and vocational programs that went away a few years ago. This local investment and job creation simply would not have been possible within our previous, restrictive contract.

Like Delta Montrose Electric, KCEC's members demanded change. Three years into our contract with Guzman Energy, the benefits of those changes are evident as our community builds a sustainable, clean environment to work and play in, enhancing our quality of life. This benefits not only the citizens who live here but the visitors and tourists who come to visit the "Solar Capital of the World" and take advantage of the opportunities our vibrant communities have to offer. Our businesses like the Taos Ski Valley are setting their own sustainability goals, setting themselves in a different class among ski resorts and capitalizing on the benefits of cleaner, more affordable energy.

DMEA is at the beginning of this path and has much to look forward to. It's not always easy but the benefits of having options and flexibility far outweigh the challenges. KCEC is happy to be a resource for DMEA as it begins this journey and shares our experience and knowledge. Congratulations to DMEA members and board of directors - the best is yet to come!

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