ORIGINAL REPORTING: Tri-State members increasingly unsatisfied as New Energy prices beat the G&T’s model
Tri-State members increasingly unsatisfied as the rise of distributed resources upends the G&T model; Given the increasing affordability of renewable energy, "the very reason G&Ts were created is less valid every day," Chris Riley, president of Guzman Energy, told Utility Dive.
Herman K. Trabish, Jan. 15, 2019 (Utility Dive)
Editor’s note: The economics of New Energy are becoming undeniable though Tri-State continues to avoid facing reality.
A struggle over the future of the power sector is unfolding in the Mountain West as the supplier of generation to 43 electric cooperatives resists members' demands for a new resource mix. Tri-State Generation and Transmission (G&T) Association is the latest utility power supplier caught in the transformation of the power system economics. As 2018 announcements from Xcel Energy Colorado and PacifiCorp showed, buying and using new renewables now can cost less than running existing coal generation. Leading Tri-State members are demanding their supplier recognize this new reality.
"This is a fight for how future electricity demand will be met and a part of the fundamental questioning of the traditional utility business model," Chris Riley, president of Guzman Energy, the new power supplier to New Mexico's Kit Carson Electric Cooperative (KCEC), a former Tri-State member, told Utility Dive. Guzman took over the power supply for KCEC in 2016, after the cooperative paid Tri-State $37 million to exit its contract. Since then, Guzman's mix of renewables and market-purchased power has kept KCEC on track to resolve that $37 million deficit by the early 2020s and deliver an estimated 40% rate decrease. This validates new power system economics described in the Rocky Mountain Institute (RMI) reports a new power supply could save hundreds of millions dollars over the next decade for customers of Tri-State member co-ops. The report reinforced recent analyses by Xcel Energy and PacifiCorp and has has led to increased doubt among Tri-State members… click here for more
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