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Cooperative is a viable business model for urban areas as well as rural ones, says CEO of Core Electric Cooperative

by Allen Best

Like the name “Tiny” applied to a child who has become a strapping man, Intermountain Rural Electrical Association needed a new, more accurate name.

It was formed in 1938 in the Colorado mountain community of Bailey. It expanded in later decades beyond the foothills onto the Great Plains, taking in small towns that have become some of Denver’s largest suburbs: Castle Rock, Parker, and Centennial. The service territory extends from the outskirts of Fairplay on the west to Deer Trail, a community along Interstate 70, on the east.

Core Electric Cooperative, the new name, reflects that geographic and demographic shift but also a broadened mission. Electricity has become more central to the lives of people in the last 75 years, and more changes yet have started.

The new name also reflects desire to provide assurances to companies considering locating in the utility’s service territory.

“As our member communities have grown and modernized, we saw that we needed a new name to represent the place we occupy, not just geographically, but in people’s everyday lives,” said Jeff Baudier, the chief executive of Core (CORE, in the cooperative’s preferred style).

“The name better captures where we are in our evolution,” said Baudier in an interview with Big Pivots.

Core serves 300,000 people via nearly 170,000 meters, most of any of Colorado’s 22 electrical cooperatives. It has doubled membership since 1998.

United Power is Colorado’s second largest electrical utility, delivering electricity along the northern flanks of the metropolitan area in the Firestone and Brighton area. It has 100,000 members, a doubling since 2004.

The two giant cooperatives are alike in that they both want to assure their members that they can provide electrical services that their members want.

But with the new name, Core also wants to instill in existing and potential customers confidence that it can deliver the best in electrical services. In that, it is playing to urban sensibilities that, rightly or wrongly, are suspicious of rural.

“We are trying to show that the cooperative business model is one that might have had its roots in rural communities, but it’s just as valid as a business model in a city or major metropolitan area for large industrial and commercial customers,” said Baudier.

Xcel Energy, an investor-owned utility that is responsible for 66% of electrical sales in Colorado, has the monopoly on most of metro Denver.

“We are just as sophisticated and reliable—and, in fact, we are more reliable,” says Baudier in a comparison to investor-owned utilities. “And we are affordable. The key difference is that our members have an opportunity to own part of the utility.”

Core has been moving rapidly to take advantage of discounted prices of renewables and expanding opportunity in storage. Solar last year delivered 33% of the electricity distributed by Core to its members. The cooperative plans to roughly double its solar capacity by around 2026.

Storage is also part of the future, in homes and, likely in the next few years, in large lithium-ion batteries.

A paradigm shift is underway, not just at Core but many other electrical cooperatives and other utilities. Twenty years ago, electricity flowed one way from mostly giant coal-fired power plants. There was little differentiation in prices. And renewables, of course, were scarce.

The new paradigm is one of more distributed generation. For example, CORE has 4,000 dispersed locations for solar generation by members, mostly rooftops, that collectively have 20 megawatts of generating capacity. The power no longer flows in just one direction.

Greater changes are afoot in customer choice. Nearly all Core’s 170,000 meters have advanced capabilities, the start of a great new interface between consumers and electrical supplies. Those meters coupled with new pricing policies will allow customers to decide when to use their electricity. For example, demand typically surges between 4 and 8 p.m., and pricing partly reflects this greater demand. Time-of-use pricing allows customers to shut off air conditioners, if they wish, and instead open windows to catch evening breezes —and save money while doing so.

“People now want to be able to say where their power comes from, how much they use, how much they pay,” says Baudier. “The (electrical) industry is going to a much more user-driven space.”

Still to be decided is the future of Core’s single largest generating asset, a 25% share of Comanche 3, a coal plant near Pueblo that was completed in 2010. Xcel Energy is the primary owner, having a two-thirds stake, as well as the operator. Another electrical cooperative, Holy Cross Energy, owns the balance.

In 2010, when it began operations, it was projected to have a useful life to 2070. Now, however, Xcel says it wants to continue operations only until 2040 and at a much diminished capacity. State regulators in coming years will have to decide whether the coal plant should be allowed to continue operations that long, given its troubled history.

When it will it close? “We know there will be a time when we will transition out of Comanche, but we don’t know enough to say when that will be,” says Baudier.

For a broader role of the churn underway in the world of electrical cooperatives, see also story about Tri-State Generation and Transmission. 

Allen Best
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