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Proposed group to study long-term future of La Plata Electric Association

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Wednesday, Jan. 3, 2018 10:11 AM
La Plata Electric Association's board may form a new subcommittee to examine the future of the co-op. A possible topic for the new group is the buying out of its contract with Tri-State Generation and Transmission.

Herald Staff Writer

The long-term future of La Plata Electric Association is likely to be the focus of a new subcommittee that would explore options for purchasing more renewable energy, among other initiatives.

The co-op's board has not yet voted to create the subcommittee, but board members expressed support for it at their last meeting, said Ron Meier, manager of engineering and member relations.

The board could take official action in January.

Customers have expressed interest in transitioning to renewable energy during the past year. More than 900 people and 111 businesses signed a petition calling on the city of Durango to commit to transitioning to 100 percent renewable electricity by 2050. The city agreed to start a discussion but has not made a formal commitment.

Some residents see solar and other green energy sources as the future, especially as the price of renewable energy falls.

Landis

"Business as usual is not going to be viable. We need to make sure we are looking to that and planning for it," LPEA board member Rachel Landis said.

Unger

LPEA is restrained on how much renewable energy it can purchase by its contract with Tri-State Generation and Transmission, its wholesale supplier. The subcommittee could explore buying out of that contract, but that wouldn't be the sole purpose of the committee, LPEA Board Member Guinn Unger said.

It could also explore a partial buyout and remaining in the current contract, he said. But the scenarios that the subcommittee would explore have not yet been identified, he said.

LPEA set aside $75,000 in its 2018 budget that could be used to hire consultants to value the co-op's contract with Tri-State, Meier said. The value of the contract would be a piece of the puzzle in buying out LPEA's contract with Tri-State, he said.

The subcommittee could come to the LPEA board with a recommendation on whether to spend the $75,000 on valuing the Tri-State contract, Unger said. Knowing the value of the contract could help LPEA negotiate a contract buyout.

The money could pay for three different companies to value the contract, he said.

"If you just got a bid from one consulting company, you really wouldn't be sure," he said.

Lyon

LPEA board member Doug Lyon said he supports the subcommittee but would like to see a cool-headed and broad analysis.

However, he is extremely skeptical about buying out LPEA's contract with Tri-State because doing so could require the co-op to borrow hundreds of millions of dollars. He doesn't want LPEA to lose its flexibility by taking on too much debt when technology is changing.

"I think it would be imprudent to make a multi-hundred-million-dollar bet right now," he said.

He would like to see the co-op focus on roof-top solar and battery storage behind the meter, which is allowed under the current contract with Tri-State.

"We have enormous flexibility behind the meter; I think that's the direction we need to look," Lyon said.

mshinn@durangoherald.com

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