Maybe a national first for battery storage?

Mark Gabriel has eight big batteries distributed across the United Service territory – and he’d like to have even more

by Allen Best

Batteries were all around when directors of United Power and others gathered under a white tent set up along an industrial site in Brighton.

Small power banks, such as you might insert in a shirt pocket in case your mobile phone needs juice, were lined up on a table, mementos for the occasion offered by United and its partner, Ameresco.

Next to it was a United Power Ford F-150 Lightning truck, whose battery delivered the electricity that amplified the voices of the speakers who issued the stream of acknowledgements and congratulations.

In the distance was a humongous 1.3-million-square-foot warehouse, a former Costco distribution center being retrofitted to enable Amprius, a California-based company, to produce what the company calls next-generation lithium-ion batteries. Amprius projects that operations will begin in 8 to 14 months.

Central to the occasion were other batteries, made by Tesla and located behind a high chain-link fence and next to the older Bromley Lane electrical substation. It was one of eight new battery installations set up among United Power’s substations in partnership with Ameresco.

Together, the batteries have 78 megawatts of capacity, or 313 megawatt-hours, explained Jonathan Mancini, senior vice president of Ameresco, the owner of the Tesla batteries. They can smooth out the grid by being able to deploy this power at certain times to help with price fluctuations.

United Power has a 20-year contract for use of the batteries. The batteries were ordered in late June 2023. Such batteries are not plucked off Costco shelfs. They arrived relatively expeditiously.

Mark Gabriel, the chief executive of United, took the microphone.

“What you’re seeing here is the first wave of what we believe is the future for distribution utilities,” he said. And it was built for days exactly like this, he added, with temperatures forecast to reach the high 90s.

“This week will probably be the record load (demand) for United Power,” he said. (It was). “And one way to manage that is by having storage close at hand.”

Other utilities have large amounts of storage, Gabriel acknowledged, but likely none have it spread out across their service territories.

“To my knowledge, it’s the first time it’s been done in the country,” he said. “Now, of course, the marketing staff is just shaking their heads, because we can’t prove that. But I do know from talking with other CEOs on a very regular basis that this concept of bringing storage to the distribution system is unique. We believe this is the future as we work to meet the needs and demands of our members.”

Then, after a ceremonial flip of the switch, we were free to roam among the batteries. There wasn’t much to see. What they do is plenty interesting.

Capacity provides value

In the shade of the tent, Gabriel further explained to me the value of the batteries. They allow United to buy electricity at low prices and have it when prices are high.

“Right now in the Western United States, there’s a lot of energy and a shortage of capacity,” he said. “That’s not going to get better as we close coal and some other power plants.”

The batteries count as capacity. That gives United Power additional value.

The Ameresco representative had described it in similar terms. He cited the opportunity to “leverage arbitrage,” which I interpreted to mean that United can deliver value to the Southwest Power Pool — a regional transmission organization — day-ahead market. United is a member. That stored electricity may be worth something to other utilities. It’s something on the margins of this energy transition, how batteries can help pay for themselves.

“A megawatt this afternoon in this market will be north of $120 a megawatt-hour,” Gabriel said. “Okay, I can tell you the battery (cost of electricity from the battery ) is less than a third of that. We have 78 megawatts of (electricity stored in) batteries as opposed to me going and buying 78 megawatts at a very expensive price.”

Ameresco will own the batteries and United the land underneath. Gabriel did not divulge the precise price, but did said it was less than half of what they had been paying at $75 a megawatt-hour deliveries.

One board member of United earlier had described the power-purchase agreement with Ameresco as a “measured risk.” Gabriel conceded there is risk, but downplayed how much. “There’s always some risk, particularly when you’re starting a project,” he said.

Other utilities in California, Arizona, and Texas have put in big single-site batteries.

“We don’t believe that makes the most sense for us. You talk about risk. You put all your risk in one physical location. No. 2, it requires transmission-level power (and transmission costs money), and No. 3, it doesn’t help the local residents of the grid. (The batteries) build resilience on the grid.”

There’s little to see beyond the chain-link fence and the batteries. What they do is plenty interesting. Photo/Allen Best

United got into the battery game in 2018, the first at any scale in Colorado. This was three years before directors hired Gabriel away from his position as regional administrator for the Western Area Power Authority. But, much like Bryan Hannegan, who left the National Renewable Energy Laboratory to transform Holy Cross Energy, Gabriel had spent time contemplating the grid of the future, even writing a book published in 2009 called “Visions for a Sustainable Energy Future.”

More batteries vs. transmission

I asked Gabriel whether ultimately he might look to install batteries at all 25 substations.

“Ultimately, yes,” he answered. “I’m worried about meeting the load that’s growing here in our footprint.”

Transmission may ultimately allow energy to be shipped around the country. Under the best scenarios, it will take time.

“I’m asked once a week to sign and support somebody building transmission,” said Gabriel. “I always raise my hand and say, ‘Give it to me.’ But the earliest we’re going to get new transmission in this part of the country is 2030 to 2031. And if I’m right about our growth, we’ll be twice our size by 2030.”

Won’t the Colorado Power Pathway be delivering oodles of wind and solar, too, from the Eastern Plains of Colorado to the Front Range by 2028?

Gabriel sidestepped exactly what Xcel’s 345-kV transmission lines will deliver to United.

“Hope is not a strategy,” he said, citing a former boss.

“What I have to do is figure out how am I going to meet the needs of my members today.”

I asked him specifically about resource adequacy. He had said he was worried. United gained 3,000 members last year — and this year is already at 2,000 new members.

The subdivisions of lots and houses both large and small continue to sprawl across former farmland near Brighton and other areas of its service territory. Along the major highways the industrial expansion continues. BNSF had been securing permits for a giant new Intermodal Facility and Logistics Park, a place for offloading of goods from trains for distribution in metropolitan Denver.

United last year had a peak demand of 634 megawatts. On Friday, it set a new record of almost 650 megawatts. By 2030, though, Gabriel expects demand to rise to 1,200.

“This is a resource adequacy play right here,” he said, nodding at the lithium-ion batteries.

Speaking of data centers

Then we talked about data centers. Some in Colorado, most notably former PUC commissioner John Gavan, have warned about the danger posed to Colorado’s carbon reduction goals by surging demand from data centers. Gabriel doesn’t buy the worry.

“It’s like anything else: With enough lead time and enough cooperation, anything can get done. A data center is no more worry for me than another housing development other than I need to know enough in advance so that we can get equipment ordered which, by the way, they pay for.”

Gabriel said United is talking with a large company – he declined to name it – that has four data centers being planned. United wants to know whether they have the money up front to pay for what is needed, what their time frame is, and how can United contract for the power they will need separate from other members. “Because I’ve got to protect our membership,” he said. “All of those are solvable problems.”

I asked him about a major tech company that has land near DIA.

“I cannot comment, but I’ll give you the perfect example. When this particular data center group came to us, they said, ‘Hey, we’re looking at 24 different sites,’ And we said, ‘20 of them don’t work. But these three…’ That’s what I mean by cooperation. We said, if you put it here, here and here, we can help you. If you want to put it in any other site, we can’t help you because of the location.”

Data centers, he added, provide great load for utilities “because they run 24/7. They’re got a high power factor. They don’t cycle up and down. You know, homes are not efficient load. Data and oil and gas are very good loads.”

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