This story was originally published here. canary media.
Tri-State Generation and Transmission Association, one of the nation’s largest rural cooperative utilities, is bringing energy transformation to its large western service territory. It is currently acquiring its first large-scale solar power plant as it prepares to move away from its dependence on coal power.
Tri-State generates and transmits power to 41 member cooperatives that retail to 1 million customers in rural Colorado, New Mexico, Wyoming and Nebraska (four states, despite the name). Our customer base spans 200,000 square miles, larger than the entire state of California, with an average customer density of only five customers per mile of power line. Just a few years ago, Two member cooperatives leave Tri-State The idea is to find cheaper, cleaner power elsewhere. Since then, Tri-State has announced a series of clean energy commitments to provide 50% renewable electricity by the end of 2025, up from 33% in 2023.
The cooperative announced last week that it will purchase Axial Basin Solar, a 145-megawatt project to be built in Moffatt County, Colorado, and Dolores Canyon Solar, a 110-megawatt project in Dolores County, Colorado. did. Both projects are still under construction but are expected to provide power by the end of next year. Tri-State has also signed three new power purchase agreements from solar farms that will be operational by the end of the year.
Just days after that announcement, Tri-State announced the largest third-party solar project it has contracted to date, the 200-megawatt Origis Solar development at the former Escalante Generating Station coal-fired site. They reported that electricity was flowing. New Mexico. The cooperative also submitted an innovative proposal to federal regulators to work with members who want to: Produce your own clean energy locally.
Puerto Rico is using residents’ home batteries to back up its power grid.
“Over the past months and years, Tri-State has been a critical leader in the cooperative space in identifying how to deliver the benefits of clean energy to our members and take full advantage of the inflation reduction law. “ said Uday Varadarajan, senior principal at RMI, a climate think tank that tracks rural cooperatives. decarbonization. (Canary Media is an independent affiliate of RMI.)
This acceptance of the energy transition was by no means guaranteed. It is an American cooperative power company that supplies about 12% of America’s electricity. It accounts for 56% of the total landscape., are at serious risk of being left behind by the clean energy transition. The U.S. has fostered a renewable energy industry through tax credits, which don’t do much for the many federal, municipal or cooperative utilities that generate power as non-profit businesses and don’t owe the IRS. Many cooperatives also sign long-term contracts, committing to pay for coal power plants even if they want to switch to cleaner, cheaper alternatives.
That situation is now changing, thanks to the landmark climate policies passed in the Inflation Reduction Act of 2022. Chief among them is a “direct payment” option that would give nonprofits access to the same generous clean energy tax credits as for-profits. Even if you have little or no tax burden. After seeking clarity on tax regulations, Tri-State’s leadership decided now was the time to go on strike.
“Nonprofit cooperatives cannot take advantage of any of these advantages. [renewable tax credits] Because we didn’t have a tax obligation to offset,” said Lee Boughey, Tri-State’s vice president of communications. But now, he added, “we are pursuing the maximum amount of financing available to the cooperative.”
From incumbent to agent of change
In 2016, at least several local cooperatives that purchase power in the Tri-State were complacent about the pace of decarbonization. Kit Carson Electric Cooperative in New Mexico break off ties that year, paid a $37 million exit fee to buy power from a company called Guzman Energy and produce more clean energy locally. Colorado’s Delta-Montrose Electric Association soon followed suit. Guzman beat them It uses a renewable energy-focused portfolio that they say will save them money over time compared to staying in the Tri-State.
Tri-State launched a clean energy plan effort in 2019 and pledged in late 2020 to reduce carbon emissions 80% by 2030 and close several coal plants. Recent solar investments represent progress toward that promise.
Clean energy technologies and prices have reached a different level of maturity in the early 2020s compared to 2016, Boughey said. Now, utilities are seeing ample cost savings and benefits for their customers by maximizing low-cost renewable energy generation while ensuring enough “firm” power (currently provided by coal and fossil gas power plants) to keep the lights on. The utility recently set a new record for instantaneous renewable production on May 24, when wind and solar supplied 87% of its power generation over a 30-minute period.
Collaborating customers are also shareholders, so the people who vote for utility leadership are the same people who benefit from low-cost renewable energy. Tri-State also supports the economic development of its client owners by investing in projects within the region.
“As we pursue the energy transition, we can ensure that utilities in the western United States continue to maintain reliability and resilience despite the challenging weather they may face,” said Boughey.
Inflation reduction laws break down barriers to cooperatives.
The Inflation Reduction Act (IRA) finally gave cooperatives the opportunity to take advantage of the renewable energy discounts available to tax-heavy for-profit businesses. But it also included a program specifically designed to help rural cooperatives deal with coal plant closures without burdening customers with higher power prices.
Cooperatives cannot raise capital in the same way as for-profit utility companies owned by Wall Street. For example, cooperatives do not issue shares to profit-hungry investors. To build new power plants without incurring steep rate increases for customers, cooperatives often borrow cheap debt and repay it over decades using electricity generation or transmission revenues. Many cooperatives, including Tri-State, are still paying for coal plants they expected to operate for decades more. Closing early for climate or economic reasons leaves customers saddled with outstanding debt for something that no longer creates value.
The IRA has invested $240 billion in clean energy. America still needs more.
This turned out to be one of many ambiguous decarbonization challenges addressed by the IRA. that I created a program The U.S. Department of Agriculture is calling it Empowering Rural America, or New ERA for short, and has provided $9.7 billion to help rural utilities finance their transition away from coal and support coal communities in the process. The program draws suggestions for: $93 billion in energy transition investmentsPublic and private sources (awarded projects not yet announced).
“By breaking down some of those barriers, we’ve made it easier than ever before and rural America has emerged,” Varadarajan said. “What rural co-operatives have proposed since the IRA is quite surprising.”
Tri-State used new federal funding opportunities as a springboard to imagine the next steps in the clean energy transition. Late 2023 Proposal to Colorado Utility Regulators They argue that federal funding could help expedite the closure of the Craig Generating Station in 2028 and the Springerville Generating Station in 2031. Tri-State will fill the gap with 1,250 megawatts of wind, solar and energy storage, including conventional lithium-ion. Batteries for multi-day energy storage and new iron-air batteries. The plan also calls for the addition of a 290-megawatt combined cycle natural gas plant along with a carbon capture and sequestration plan.
“We need to have dispatchable capacity for when renewable resources are not available,” Boughey said. Tri-State noted that it goes beyond industry-standard reliability metrics to prepare the grid for extreme weather events, whether hot or cold.
Renewable energy purists may nod to carbon capture from fossil fuel power plants, which has little real-world economic success. But Tri-State plants the plants as a backup for moments when renewable energy can’t cover the day. And even with new gas, the portfolio is expected to lower carbon emissions from Tri-State’s Colorado power generation by 89% by 2030 compared to a 2005 baseline. These reductions exceed what Colorado requires of utilities, the company noted. The most advanced utility Nationwide.
