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Students probe whether co-ops best served by staying with G&Ts or getting divorces 

by Allen Best

A master’s thesis by two students at the University of Colorado-Boulder explores the relationship between electrical co-operatives and the generation and transmission organizations, or G&Ts, that supply most, but not all, of them.

What, ask Kayla Carey and Nathan Stottler, is the best way for the co-ops that serve most of rural American to further engage in the clean energy transition?

Co-ops serve 56% of the geographic area of the country, serve 42 million people and sell 13% of electricity consumed.

In particular, they explore the relationship of the G&Ts and what they call the culture of coal. Coal-fired generation contributes to roughly 23.5% of the nation’s electricity mix but 40% of the electricity consumed by members of co-ops.

How can co-ops best move forward?

Their paper explains the challenges of the co-ops from their founding to those of today. One constant has been that of density of customers. Investor-owned utilities deliver power to about 35 customers per mile of power line, municipal utilities 47 customers per mile, but co-ops 7. That sometimes gets overlooked in the comparison between investor-owned utilities such as Xcel Energy, Colorado’s largest, and Tri-State, its second largest.

Tri-State is only mentioned once in the first 60 pages of the thesis, but then comes up frequently in two case studies, one about the 2016 departure of Kit Carson Electrical Cooperative and then a second case study that is focused on efforts by United Power to exit and Tri-State’s appeal for jurisdiction by the Federal Energy Regulatory Commission.

This is from Big Pivots, an e-magazine tracking the energy and water transitions in Colorado and beyond. Subscribe at bigpivots.com

They conducted 42 interviews, 31 of them from Colorado and other Tri-State states.

The interviews yielded conversations about the difficulty of stranded assets for the G&Ts and questions of the debt. That would be a more narrow but worthy research study. It’s a common discussion topic among those who follow Tri-State, if one rarely talked about in public.

Another idea briefly mentioned is that the time has come and gone for G&Ts, at least for the generation component of that mission. Kit Carson provides an argument that this is true, and Holy Cross Energy another. But these are unusual co-ops.

They uncovered the complaints familiar in the scuffles between the dissident members of Tri-State that reform in the governance model is needed. One complaint is that each member co-op gets one vote, whether United Power with its 97,000 members or the smallest co-op with its 1,700 members. Most smaller coops, without staff expertise, tend to defer to management.

They concluded that G&Ts likely provide the fastest route to co-op decarbonization, but the co-ops need to work with the G&Ts to create a more flexible approach to meet the needs. “Not accommodating the merging needs of their fellow member co-ops may lead to the collapse of the G&T model,” they conclude.

Many ideas would be a worthy research topic for these grad students should they elect to continue their environmental studies in the realm of energy at the Ph.D. level. While knowing little about environmental programs, I wonder if an intertwining with business and economics studies would be crucial.

Meanwhile, the non-academic world of energy moves along briskly. The narratives of 2017 or even 2018 already seem like medieval history.

Allen Best
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