ORIGINAL REPORTING: A Big Move Toward The Energy Transition
As co-ops struggle with stranded fossil fuel assets, Tri-State may finally embrace the energy transition; "Our goal is a transition that lowers rates. It might be hard – but it might be beautiful," the G&T's new CEO told Utility Dive.
Herman K. Trabish, Aug. 7, 2019 (Utility Dive)
Editor’s note: The rebellion is growing across the country by member co-ops against their power providers who will not move ahead in the energy transition.
Though many rural power suppliers, burdened by debt from stranded fossil fuel assets, have resisted the growing shift toward renewables and distributed energy resources, some are beginning to see the economic promise of that transition. Tri-State Generation and Transmission (G&T) Association, which serves 43 member cooperatives in the West, has been a prime example of this trend. Driven by member discontent and the growing cost effectiveness of renewables, the G&T's new CEO says he wants to embrace the change.
"I saw the need for a shift into the new energy economy before I stepped in," Duane Highly told Utility Dive. "Utilities once had almost no choice but to build coal, but now policies are different, and economics are drastically different. Our goal is a transition that lowers rates. It might be hard – but it might be beautiful."
Stakeholders and long-time Tri-State watchers are hopeful of a transition, but want action, not words. It may be "hard" to address longstanding financial obligations in fixed fossil assets, but changes will be necessary to prevent dissatisfied member cooperatives from following former member Kit Carson Electric Cooperative (KCEC) and soon-to-be former member Delta Montrose Electric Association (DMEA) to early contract exits.
A "beautiful" transition that lowers customer rates might seem out of reach for electricity suppliers like Tri-State with deep debt in stranded fossil fuel assets, observers told Utility Dive. But if it realizes its proposed transition, it can be a model for others willing to take new approaches to their resource mixes and overcome the burden of their fossil fuel habits.
Despite low-cost renewables options, much of "rural America" is still served by G&Ts whose resource portfolios remain dominated by fossil fuels, Erik Hatlestad, Energy Democracy Program Director for Clean Up the River Environment Minnesota, told Utility Dive. Distribution co-op customer rates and dissatisfaction are escalating as power suppliers refuse to accept "the new financial reality," Hatlestad said. "Their need to pay off their debt is creating a dictatorship of capital that is driving a pro-coal dogma."
Similar to tensions between Tri-State and its member cooperatives, coal-reliant G&T's elsewhere are struggling to keep their members happy. The Wabash Valley Power Alliance, Tipmont Rural Electric and Northwest Iowa Power Cooperative are fighting battles for cleaner power mixes with power suppliers who see renewables as “something negative” and “from a political context and doesn't make any economic sense," Guzman Energy CEO Chris Riley told Utility Dive... click here for more
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