by Emma Foehringer Merchant
July 29, 2019

Not so long ago, Tri-State Generation and Transmission Association, a wholesale electricity provider and co-op utility with members in New Mexico, Nebraska, Colorado and Wyoming, was rejecting attempts to push the Western utility to more aggressively embrace the energy transition. 

A Rocky Mountain Institute analysis published last year, which I wrote about in a previous column, suggested Tri-State could transition toward renewables while saving $600 million by 2030. Tri-State disagreed with the results and said it was already taking advantage of low-cost renewables as much as possible.

In May, Guzman Energy, another wholesale power provider based in Colorado, presented Tri-State with a plan to remake its portfolio with over 70 percent renewables. Tri-State declined the offer and told Greentech Media it “was innovative, but it was costly.”

Now, in a sign of the times, the utility has decided to go its own way. This month it announced a “Responsible Energy Plan” alongside a shiny new mission statement highlighting “affordable and responsible” electricity. Tri-State says it can achieve decarbonization objectives akin to those laid out in Guzman’s plan at a lower cost. 

Although the plan so far contains few specifics and leans on renewables announcements Tri-State had already made, it demonstrates that even the most change-averse utilities are responding to pressure to move toward more clean energy resources — in no small part helped along by increasingly aggressive state policies. Tri-State’s 43 member systems voted unanimously to support the plan.

“These actions do not fit the false narrative portrayed by some that Tri-State is unwilling to change and we are stuck in the past,” wrote Tri-State CEO Duane D. Highley in a July 23 letter to commissioners on the Colorado public utility board. “I sincerely hope you can see that Tri-State is not just giving ‘lip service’ to the state’s clean energy goals, nor are our actions just a ‘PR campaign.’” 

Perhaps to emphasize an earnest commitment to its new mandate, Tri-State announced concurrently that it would shut down a 100-megawatt coal plant in Western Colorado in early 2020. It had been slated to retire by the end of 2022. 

"Watershed moment" 

Tri-State told Greentech Media it will work through 2019 cementing the specifics of its plan. For now, details remain sparse.

The utility says it will increase wind and solar resources — its current resource mix includes about 31 percent renewables — but it has not yet specified by how much. It recently opened a new request for proposals that emphasizes its interest in owning and operating solar projects. A recent ruling also means Tri-State must now submit its integrated resource plans to state regulators, who will approve them.   

In January, Tri-State announced a 100-megawatt solar project that it says will double its solar power when it becomes operational, estimated for 2023. In February, the utility announced a 104-megawatt wind farm.   

As part of its plans, Tri-State says it will increase the availability of community solar, energy storage and EV infrastructure available to members, and at lower costs. 

Tri-State will work with the Center for the New Energy Economy, a department at Colorado State University that convenes energy regulators, policymakers and stakeholders to develop policies in line with the energy transition.

Former Colorado Governor Bill Ritter, who helped to establish the Center for the New Energy Economy in 2011, called Tri-State’s new direction “a watershed moment.”

“This is one company that’s going through the same kind of transition that power companies throughout the United States are wrestling with,” said Ritter. 

“Things that Tri-State may have said in the past about renewables, about the cost of renewables, are just that — they’re in the past,” Ritter added.

Sign of the times 

Tri-State is still dealing with fallout from those past decisions and comments.

In July, the co-op finally reached an exit agreement with one of its members, Delta-Montrose Electric Association, that had been in the works for some time. Delta-Montrose will now get its electricity from Guzman, the supplier that offered a plan to Tri-State. 

Delta-Montrose is not the first member to leave Tri-State. Kit Carson Electric Cooperative left the supplier in 2016 and now also gets electricity from Guzman.

In creating the Responsible Energy Plan, Tri-State spokesperson Lee Boughey said the utility aims to offer more flexibility to its members.

“The other important part of this Responsible Energy Plan is the work we’re doing with our members to ensure they have the flexibility they need for developing local renewable energy resources,” said Boughey. “We want to ensure that those members who want do more locally have the flexibility to do so.”

It wasn’t just pressure from members that compelled the change. Though members have mulled leaving the supplier for years, recently passed laws in Colorado and New Mexico legally require changes in Tri-State’s resource mix. Colorado passed a bill requiring 100 percent carbon-free electricity by 2050, and New Mexico passed a zero-carbon electricity by 2045 bill that also increased its renewable portfolio standard to 80 percent by 2040.

The carbon-reduction requirements in Colorado will force a change in Tri-State’s coal resources, Boughey said. But the co-op is also beginning to publicly recognize the economic benefit of clean energy. 

Mark Dyson, an author of the RMI report on Tri-State, said Tri-State’s recent public statements connecting affordability to clean energy are new.

“That’s the first time I’ve seen that language acknowledging the compatibility of low rates and clean energy from Tri-State,” said Dyson. “That’s a great sign.” 

While Boughey said Tri-State first began investing in solar in 2009, he affirmed that economics play a significant role in Tri-State’s choice to more significantly move in a new direction.

“The pace of our renewable energy additions really relates to the cost of renewable energy projects,” said Boughey. 

As CEO Highley’s comments make clear, Tri-State has faced significant criticism for what detractors have called resistance to change. With the new vision, clean energy advocates remain cautiously hopeful that Tri-State will lay out a progressive path. 

Some Western peers have already done so. Xcel Energy, which serves customers in Colorado as well as Minnesota and several other Midwestern and Western states, committed to 100 percent carbon-free electricity by 2050 before Colorado enshrined that target. In December, Platte River Power Authority, which serves several cities in Colorado including Fort Collins, announced a 100 percent renewables target. 

It remains to be seen how quickly Tri-State’s ambition will rise to meet the new state requirements. But its public messaging signifies there will be one less energy transition holdout among companies supplying U.S. electricity.