News from Colorado's electrical cooperatives

CORE gets something less than half a loaf, while Tri-State and United Power may avoid courtroom drama. And Tri-State gets $26.7 million for its energy ecosystem project

The Bipartisan Infrastructure Law was the foundation for a $26.8 million grant from the Department of Energy to Tri-State Generation and Transmission for a distributed energy resource management project.

The project aims to improve the efficiency, capacity, flexibility, and reliability of the electric grid while integrating renewable resources and managing energy loads.

This is the project overseen by Reg Rudolph, who is now Tri-State’s chief energy innovations officer after a stint managing San Isabel Electric, the cooperative based in Pueblo West.

With a match by Tri-State, the grant will be used for such things as home weatherization, electrification and energy efficiency rebates, commercial and industrial energy efficiency improvements, community solar projects, and electric vehicle charging.

The grant has a component to it that will target low-income and energy-burdened rural communities.

United Power and Tri-State may avoid court battle on their way to a divorce

United Power and its wholesale supplier, Tri-State Generation and Transmission, may be able to avoid an expensive trip through a district court during January before their final divorce.

The Brighton-based cooperative and Tri-State sent out simultaneous press releases on Nov. 8 saying that they have executed a “term sheet” that sets forth terms for the two utilities to make good faith efforts to execute a formal settlement agreement. The deadline for this is Dec. 8, at which time they are to jointly file for dismissal of the pending lawsuit in Adams County District Court.

“In the end, the settlement is a good outcome because it provides the certainty that everybody needs to move forward with their plans,” said Eric Frankowski, director of the Western Clean Energy Campaign.

United Power plans to be gone from Tri-State by May 1, 2024, and it has been busy lining up alternative power suppliers. Tri-State is busy, too, as it must submit its electric resource plan with the Colorado Public Utilities Commission on Dec. 1.

The judge in Adams County District Court must still approve the plan, noted Frankowski, “but I cannot imagine him not doing so if the parties have agreed to it. And it would clear the court calendar of something that could drag on for a while.”

That court case was about whether Tri-State illegally added three new non-utility members in 2020 in order to qualify for review of its rates and other matters by the Federal Energy Regulatory Commission. One of the new members is an outfitter near Craig and the second a greenhouse near Fort Lupton.

FERC accepted Tri-State’s application. That immediately set back efforts by United Power to get resolution of how much it would have to pay to Tri-State in order to leave remaining members whole. After all, Tri-State has remaining debt of several hundred million dollars and other disruptions caused when one member leaves. United is the single largest member of Tri-State, alone responsible for more than 20% of demand on Tri-State’s system.

Before this, the question was being addressed by the Colorado PUC. An administrative law judge, after hearing a week of testimony, issued a recommendation that was close to what United Power had argued was fair and equitable. Tri-State had proposed a far higher figure, more than a billion.

This same process has now been heard by an administrative law judge at FERC, who again came up with a formula that yielded a number not terribly different from the administrative law judge. But the FERC commissioners themselves have not yet taken up the question nor have they said when they will. Many involved had expected resolution by now.

Nebraska cooperative has inked deal with supplier after future exit from Tri-State on May 1

An electrical cooperative in northwestern Nebraska has announced it will get its electricity from Nebraska Public Power District beginning May 1 after it ends its contract with Tri-State Generation and Transmission.

Chance Brisco, the general manager of Northwest Rural Public Power District, told a radio station in Chadron that his cooperative was a founding member of Tri-State in 1952, and it has been a successful relation. But now, conditions aren’t what they were. “With the changes in the electric industry and consideration of Northwest Rural’s future needs, the board of directors believes NPPD offers the best opportunity for continued success into the future.”

Plus, he added, the cooperative will keep $6 million in Nebraska instead of exporting it to other states.

Comanche 3 part-owner gets $26.45 million for outages in 2020 & 2021

For a while, Xcel Energy was having a difficult time making the case that it needed to continue operating Comanche 3 through 2030, even on a diminished capacity, in order to ensure reliability of electric service.

The coal plant, Colorado’s youngest, operational beginning in 2010, was proving to be the state’s most unreliable. It was down for repairs for a year beginning in 2020.

And this is what will be needed to keep the lights on in 2030?

CORE, the largest electrical cooperative in Colorado, has a 25 and 1/3% interest in the coal plant. Holy Cross Energy owns 8%, although it has assigned the output to Guzman Energy. Xcel operated it. This was per the agreement with its co-owners when they bought in to plans for the plant in 2005.

According to the complaint filed by CORE in Denver District Court, “Comanche 3 was proposed to be a state-of-the-art, 750-megawatt super-critical electric generating facility and commenced commercial operation in 2010. It was proposed have a useful life of at least 60 years.”

Then came the troubles.

In 2021, after the plant was up and running again—at least for a while—the Public Utilities Commission staff had completed a report. A decision by the PUC commissioners on March 24, 2021, summarized what the staff members and consultants had found about the outage of 2020 and others of prior years.

“Some of these incidents are the result of single failures, but many incidents appear to be more of a chronic or systemic failure,” said the PUC commissioners in their decision asking Xcel to share more documents.

“One of the more troubling aspects of Staff’s reports is the large number of findings in the various reports regarding improper operating practices, inadequate maintenance, and failure to adhere to industry standards.”

The report continued: “Specifically, why is Comanche 3, a unit still in the first decade of its 60-year useful service life, plagued with such unit reliability? In general, poor unit reliability is usually the result of a combination of poor equipment design and substandard operation and maintenance (O&M) practices. Staff’s investigation revealed that this is likely the case for the Comanche 3 2020 outages.”

Then came another outage in early 2022 for several months. CORE several months before had sued Xcel but later amended its complaint.

Oct. 25, a jury in Denver District Court ordered Xcel to pay CORE $26.45 million for the lengthy outages. CORE had asked for $253 million, arguing that the value of the coal plant that had been expected to continue operations much longer had been substantially diminished.

A statement issued by the cooperative that quoted Jeff Bauder, the chief executive, suggested some disappointment.

“This verdict will at least partly compensate CORE for damages caused by the systemic failure of Xcel to prudently operate Comanche 3, which negatively impacted our member owners,” he said.

CORE months ago announced that it was charting a future independent of Xcel and largely independent of fossil fuels. At the end of 2025 it will leave its power-purchase agreement with Xcel Energy. It will procure power from other sources. It will retain its ownership in the coal plant, though.

Holy Cross had previously negotiated a settlement but declined to disclose the settlement terms.

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