Guzman Energy, the company helping Kit Carson Electric Cooperative build out a solar network across the region, has made an audacious proposal to the local co-op's …
Guzman Energy, the company helping Kit Carson Electric Cooperative build out a solar network across the region, has made an audacious proposal to the local co-op's former energy provider, Tri-State Generation and Transmission.
On Tuesday (May 28), Guzman announced that it is publicly making a "large-scale, transformative, economic proposal" to Tri-State.
The proposal would pump cash into the organization in order to "finance the accelerated retirement" of some of Tri-State's coal-dependent assets.
Guzman Energy President Chris Riley said his company made the move because of new laws in New Mexico and Colorado that mandate transitions toward renewable energy sources.
"Rapidly changing economics, combined with new carbon reduction goals in states that include the majority of Tri-State's members, mean there's a lot at stake for those who own and are served by Tri-State," Riley said.
Kit Carson paid Tri-State millions of dollars to buy itself out of a power supply contract in 2016, specifically because of limits imposed by Tri-State on locally produced solar energy. While the move angered some of KCEC's members because of the cost of the buy-out to customers, it also put the cooperative in a good position to meet new state mandates for renewable energy.
Guzman said it can help Tri-State do the same.
"We've put a proposal on the table that would help Tri-State and its members lower costs right now while simultaneously reaching compliance with new laws. We look forward to taking the proposal directly to Tri-State's owners and facilitating an open and transparent dialogue," said Riley.
Tri-State's reaction was less than favorable.
"Guzman Energy brought us an imaginative and creative high-level verbal proposal, which lacked any specific or meaningful detail or terms. Tri-State requested a written proposal but Guzman refused to provide one, instead deciding to go to the press," said Tri-State CEO Duane Highley.
"It is not in our best interests to enter into an arrangement with Guzman Energy, a for-profit energy trader, before other options are also explored," read a thread on the company's Twitter account.
Guzman fired back with a statement contesting Highley's comments.
"Guzman disputes Tri-State's assertion that we were asked and refused to provide more details, as well as their assertion that we demanded exclusivity. Guzman recognizes that a proposal of this scale will require a competitive process and we welcome it. We welcome further discussion with Tri-State, its members and anyone else who would like to discuss the proposal," said a spokesperson for Guzman Energy.
Keven Groenewold, longtime chief executive officer of the New Mexico Rural Electric Cooperative Association, which represents 14 co-ops around the state, said he doesn't know whether Guzman's proposal would be a good deal or a bad one. "At this point, I would have to say there is not a lot of interest, simply because these are high-level 30,000-foot aspirations but with very little detail," Groenewold said. "As the other members watch what is happening at Kit Carson, they are not real enamored of Guzman."
In addition, Groenewold said solar and wind projects underway by Tri-State already, along with access to federal hydroelectric power, may make it possible for New Mexico's co-ops to meet the new state law requiring more renewable energy, even without help from Guzman.
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