Crazy times in Colorado's energy world

Electric cooperatives hear about the twists and turns of nuclear energy, data centers and SPP’s new balancing authority

by Allen Best

Jason Quinn made a bold prediction on Monday at the annual meeting of the Colorado Rural Electric Association.

“The grid is evolving, right? It’s actually a really exciting time, scary but exciting,” said Quinn, the interim executive director of Colorado State University’s Energy Institute. “The grid is going to change more over the next 3 years than during the last 30 years.”

In the half-hour that followed, Quinn never completely laid out how the electrical grid will change. Instead, he challenged the several hundred people gathered at the Westin Hotel in Westminster to talk hard with each other about changes that may be possible in this big pivot in energy.

Along the way, though, he did suggest some ways that it will not change, at least not soon. Nuclear, for example, and hydrogen.

“I see hydrogen personally as champagne, and not table wine. What I mean by that is yeah, there’s some unique occasions we’re going to pop it off, and it’s going to be great. But I don’t know if that’s necessarily the answer. We kind of saw that play out, right?”

Clean coal is another one, he added. Eight to 10 years ago or longer, some had great faith in the technology. The reality: one pilot plant, and it didn’t really take off.

Quinn, who said he is 47, pointed out that nuclear at about the time of his birth was predicted to be source of energy in the future that would be “too cheap to meter.”

That didn’t happen, of course.

Quinn, a mechanical engineering professor, directs the CSU Energy Institute while Bryan Willson is on leave for work with the Department of Energy. The institute is housed in the old coal plant in Fort Collins located along the Poudre River and College Avenue. CSU took over the building and has refashioned it into what Quinn described as a “multi megawatt test bed.”

“We run three and a half megawatt gas turbines, five 5,000 horsepower reciprocating engines, really focused on natural gas, hydrogen, those sorts of things, and combustion technologies on the experimental side of things. And then on the grid side of things, doing a lot of grid modeling, but also demonstration of integration of technology.”

“Our mission is really focused on hands-on experience, followed by entrepreneurial scale up,” said Quinn. His specific focus is on economic viability.

“The weirdest thing I’ve ever worked on was synthetic spider silk derived from goat’s milk, so that you could put Nike fibers so that Nike athletes could run faster or something like that. “

But, he added, he has worked on everything from biofuels to small modular reactors.

Quinn apparently plays hockey, if not particularly well, by his own description, at the C League level. He showed a slide of the famous quote from hockey great Wayne Gretsky: “I skate to where the puck is going, not where it has been.” He said his play favored the latter.

“That’s the challenge that I throw toward you all,” he said. “How do you determine where the puck is going to go, and how do you make those decisions and whether they’re going to be right?”

“You’ve got a limited amount of resources, and you have to decide when you step on the gas and what you step on, right? Too early and you fail. Failure is not an option for you all, right? Too late and you miss the bandwagon. You miss that sweet spot. How do you find that sweet spot? What does that look like? How do you make those decisions?”

Colorado has 22 electrical cooperatives, of which 21 are members of the state association. Often called “rural” electrical cooperatives, they were formed with federal aid in the late 1930s to serve rural areas that the investor-owned utilities found uneconomical.

They range greatly in size and many other ways. The largest now serve primarily urban areas. Sedalia CORE Electrical Cooperative has the most members, 180,000 in parts or all of nine counties, including the municipalities of Castle Rock and Parker. Brighton-based United Power has fewer members, 120,000, but supplies far more power, because of industrial users.

In decades past, many cooperatives were stodgy, resistant to change. That era has passed, and many cooperatives are moving forward on innovations inconceivable 20 years ago.

Among the most aggressive in pursuing changes has been Glenwood Springs-based Holy Cross Electric. Bryan Hannegan oversees operations at Holy Cross. In 2017 he left what is now the National Laboratory of the Rockies to become chief executive. With directors elected from the Vail, Aspen and Battlement Mesa areas, he has made Holy Cross a cooperative recognized nationally for its efforts to embrace new approaches to electricity.

For example, Holy Cross was early to encourage home batteries that could be shared with the grid. It is now starting to experiment with vehicle-to-grid programs.

Holy Cross’s story is not a simple one, though. It has the confusing distinction of being a co-owner of the Comanche 3 coal unit in Pueblo while still managing to achieve 89% renewable energy for the year through September. The output of Comanche 3 is consigned to other power providers.

Hannegan moderated a panel at Monday’s conference about data centers. But before he began asking the questions, he noted that current trends were in many cases a decade ago the domain of futurists.

“The power grid is definitely evolved from hub and spoke, large generation, passive customer, one-way delivery network of commodity electrons to something that is much more dynamic,” he said. “It’s much more distributed, it’s much more digital,” he said.

“We have consumers that are generating their own power and storing it. We have them feeding it back onto the grid. We have generation resources that are more weather-dependent and variable than ever before. We’ve got concerns around data and cybersecurity. We’ve got physical challenges from extreme weather events and all manner of disturbances. We’ve got new demands for energy services, both large and small, from the electronics in our home to the data centers that power them; it is a time of rapid change, and so must our institutions, our markets, our governance, and our utilities that run that grid.”

Google’s Sydney Henry said her company could help Colorado utilities meet their carbon-reduction goals through partnership on geothermal or other technologies but also made the case for tax breaks enjoyed by what she cast as similar manufacturers. Top, Jason Quinn of Colorado State University’s Energy Institute. Photos/Allen Best

During his panel, two representatives of data center developers contended that their products could actually help the electrical cooperatives. For example, Google’s Sydney Henry said that her company might be able to push ahead on development of enhanced geothermal, using the Earth’s heat to create electricity, for use at data centers.

But as with Holy Cross and its ownership of a coal plant, the arguments of Henry were confusing. She also argued that Colorado needed to give tax breaks to data center developers, to give them the same break enjoyed by other manufacturers. There is really no difference, she said.

Colorado’s energy pivot is also confusing in other ways. Launching the conference were the comments of Larry Nickell, the president and CEO the Southwest Power Pool. The Arkansas-based SPP has maintained a regional transmission organization in the Eastern Electrical Grid for many years. Member utilities are in 14 states extending from northern Texas to the Canada border.

The market allows member utilities to share electricity, in theory — and in practice — allowing them to need less resources of their own. Efficiency is the goal.

Utilities in Colorado for many years talked about joining such an organization, but for a whole host of reasons dragged their feet. SPP launched its market in the Western grid on April 1. Many Colorado utilities — Tri-State Generation and Transmission, Platte River Power Authority, and eight other providers of power in Colorado — are inaugural members. In addition to the Colorado members, several utilities in two other states are participating in the SPP market.

Xcel Energy, though, was not yet ready to commit, instead agreeing to participate in a more limited approach called Markets+, which SPP expects to launch in October 2027. Black Hills Energy also has not joined.

A law adopted by Colorado in 2021 requires all utilities in Colorado to join a regional market no later than January 2030. The basic idea is that electricity must be shared broadly and efficiently across large areas, broader than one time zone and broader than one weather system.

Larry Nickell, chief executive of Southwest Power Pool, said SPP had some “close calls” on having enough electricity to meet demands in its new western balancing authority earlier this year.

Is SPP, in its new market construct, big enough yet? The answer would seem to be no, it is not. SPP’s Nickell talked at length about the concerns of resource adequacy — fears it might not have enough power to keep the air conditioners blowing cold air during July and August. As such, it called on Tri-State several times to reopen the Craig coal unit that had been scheduled to be retired in December.

Questions linger about whether tapping Craig was the most cost-effective approach to addressing worries about SPP’s resource adequacy.

The peak demand this year for its members in the Western grid, said Nickell, was 4,800 megawatts. That compares with 58,000 megawatts peak demand this year in its balancing authority in the Eastern grid, a 3.5% growth from the previous peak demand. The peak demand among its utilities in the Western grid was 11% higher than the previous year.

“We had some close calls,” he said.

Nickell admitted to apprehension in this new Western market, which also involves utilities in two other states in addition to Colorado. He also talked about efforts to improve flow of electrons between the Eastern and Western grids.

Questions posed to Nickell were of the softball variety. None were taken from the floor. The elephant-sized question is whether SPP will be able to gain the necessary size to provide efficient sharing of resources. An alternative for Colorado utilities is to join in CAISO, the California-spawned independent system operator.

An important moving part is whether Bonneville Power Administration’s hydro power from the Columbia River Basin will be part of SPP’s mix.

Bonneville had said it would join Market+ but in September announced it had reservations about doing so. In an Oct. 22 letter to the Colorado Public Utilities Commission, Joseph Pereira, director of the Colorado Office of the Utility Consumer Advocate, pointed out that without Bonneville, “the market may be significantly smaller in scale, with less desirable resource attributes.” Pereira’s office asked the PUC to open an investigatory docket to probe whether the “costs and benefits of regulated Colorado utilities in the Markets+ offering given the high potential for a change in circumstances.”

The first unit at Craig was scheduled to be retired in late December 2025 and was in fact broken down when federal orders were given to keep the plant available. SPP called for the plant to be returned to service several times in 2026.

In an interview with Big Pivots, Pereira questioned the need for the Craig unit’s power. A day before its planned retirement on Dec. 31, Energy Secretary Chris Wright issued a 202(c)3 order that it remain available. Wright had issued a similar order for a coal plant in Michigan, and a federal court has ruled that in that case the order was unlawful. No court has rule don the legality of the Craig order. See “Implications of Michigan case for Craig coal unit.”

Regardless of whether it was available, Pereira and his office see the SPP call for power from the plant as unnecessary. Instead, he said, it reflects the disfunction of SPP’s market.

As for data centers, they were mentioned throughout the CREA conference, including in Nickell’s comments. In its Eastern grid operations, said Nickell, members forecast peak demand of 110,000 megawatts in 10 years compared to the 58,000 this year. About 30% of that, he said, was projected to come from data centers, with the remainder from more general growth in electrical demand. This comes after a period of little growth.

“I expect it’ll probably look similar in the West. I don’t yet have those numbers,” he said of projected growth in demand.

Quinn, in his noon-hour talk, also mentioned data centers. “Looking back, who predicted 10 years ago that we would have a one-gigawatt data center? Anybody who said that 10 years ago, you would be like, ‘You’re crazy.’ “

Trying to prepare for the future, he told the leaders of the electrical cooperatives, they needed to have some options that would elicit the reaction of “Dude, you are crazy.” To be real, it has to be a little bit crazy.

But Quinn also admitted that crazy is sometimes just that. He recalled that as a 22-year-old, he was in a Ph.D. program on nuclear fusion energy. He concluded then that it would not happen in his lifetime. And he wanted to make an impact.

Looking back, he thinks his 22-year-old self was right. A buddy in grad school, though, had another crazy idea about stellarators, a magnetic confinement fusion device. He’s now chief technical officer of a company that got a $300 million venture capital investment.

“The hard part is picking your pony. And I challenge you not to pick one pony, but a couple of ponies that are all running in the same direction to get you where you need to go.”