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Montezuma County’s hopes for solar power begin to dim

Company interested, but power purchase agreement is needed

Three years ago, Montezuma County began an economic development campaign to attract large-scale solar farms. And while there has been progress, hurdles remain.

In 2015, county commissioners rolled out a welcome mat that included a map showing ideal locations that have flat land and are close to substation connecting to regional and national transmission lines.

An analysis of the region’s consistent sunshine and elevation also were pitched to attract solar investment. A county resolution was passed outlining a commitment to promoting renewable energy.

Once the line was cast, private industry began to nibble on the bait, but challenges arose about companies gaining access to the power grid, according to county officials.

County Natural Resource Director James Dietrich said three solar companies showed interest. One remains.

“Companies have told us the challenge has been securing the power purchase agreement from the utility,” he said. “We reached out to show the county has the criteria solar companies are looking for, but it is up to private industry to take it from there.”

EDF Renewables stepped forward and is in the preliminary planning stage for a large-scale solar farm west of Cortez, said project development manager Vincent Green.

“It is a sunny area with flat land, and there are good growth patterns related to future energy use and demand. We plan our projects around that growth,” he said.

About 1,000 acres of property has been leased from landowners for the rows of solar panels, Green said. The capacity would be between 50 megawatts and 150 megawatts. Exact costs of the project are not known, but it would be “tens of millions” of dollars.

But real design planning and construction cannot begin until a power purchase agreement with an energy utility is secured to deliver and sell the power to consumers.

Empire Electric Association, based in Cortez, is one of 43 independent cooperatives served by the Tri-State Generation and Transmission Association.

Tri-State provides wholesale power to its co-ops and heavily relies on coal and natural gas-fired generation power plants, but it also draws from large solar and wind projects. Tri-State owns or operates high-voltage regional transmission lines in Colorado, New Mexico, Wyoming and Nebraska. It also owns coal mines and is co-owner of the coal-fired Craig Station Power Plant in northwest Colorado.

Empire is required to buy 95 percent of its power from Tri-State, under a long-term contract. The format is typical of Tri-State contracts with co-ops, officials say. A co-op can produce 5 percent of it power from other sources, such as locally produced renewable energy.

Empire Electric has 4 percent available on its system for moderately sized solar, wind or hydroelectric projects, said General Manager Josh Dellinger. But the large-scale solar farm proposed by EDF Renewables would significantly exceed the 5 percent cap.

Part of the issue is infrastructure limitations, he said. Empire does not have a substation large enough to accommodate an industrial-size renewable energy project.

“It would likely make more sense for a project like that to have a dedicated substation and connect directly to the transmission grid,” Dellinger said.

Green said he understands Empire’s limitations to accept power from his proposed project. The next option is to negotiate a power purchase agreement with Tri-State or with Western Area Power Administration, which both have transmission infrastructure in the area. That complex process is ongoing, Green said, and negotiations can take two years.

Green said he is “hopeful and bullish,” for the Montezuma County solar project.

“You have the resources without a doubt and have all the pieces for a good project,” he said. “I envision that a lot of solar will come to that area because demand for renewables is going up, and prices are going down.”

Tri-State has been facing criticism of its long-term contracts with cooperatives. The 5 percent cap on locally produced power is viewed as too restrictive for communities looking to ramp up renewable wind, solar and hydro-electric energy.

For example, in December, the Delta Montrose Electric Association filed a formal complaint with the Colorado Public Utilities Commission in an effort to buy itself out of its contract with Tri-State.

DMEA cites escalating rates and a desire to seek more affordable local renewable energy as reason for a divorce from Tri-State. They are asking the PUC to “adjudicate a just, reasonable and nondiscriminatory exit charge.”

Tri-State’s position is that the PUC does not have jurisdiction in the contract dispute.

In 2016, Kit Carson Electric Cooperative in New Mexico secured a $37 million buyout from Tri-State.

Wild Earth Guardians has been pushing for Tri-State to accommodate more renewable energy projects at the cooperative level, said climate and energy program director Jeremy Nichols.

As the cost of coal rises, Tri-State’s members are on the hook for the increase, he said, and not surprisingly, many members don’t like it.

“There is a lot at stake with the Montrose case. They are the trailblazers right now,” Nichols said. “Investing heavily in renewables appears to be the new model for economic sustainability, but it depends on getting out of these contracts that prevent it.”

This month, Colorado legislators weighed in on DMEA’s request for a buyout of the Tri-State contract.

In a Jan. 14 letter, 17 state senators and 35 state representatives said they supported the PUC setting the price for the co-ops exit from Tri-State.

In the letter, legislators said Coloradans should have “access to less expensive power from local and diverse generation sources.”

They state it is unlawful for Tri-State to demand “unjust, unreasonable, or discriminatory charges,” and if they do, it is “depriving rural Coloradans access to less expensive power generation that can serve as a catalyst for economic development on the Western Slope.”

State Sen. Don Coram and Rep. Marc Catlin, representing Southwest Colorado, signed the letter.

“I signed because Delta-Montrose co-op came to me and said they have hit a brick wall in their negotiations, so I want the PUC to make a ruling,” Catlin said.

He said the solution should be negotiated on market-based principals and not legislatively.

“Tri-State has been a good utility, but maybe they need to be more nimble in these changing times. If we have alternative sources that generate power cheaper, then we should do it,” he said.

The hang-up, critics say, are the contracts that restricts a co-op’s ability to buy power from alternative sources other than Tri-State.

Tri-State counters by touting its overall renewable energy portfolio. The company states on its website that 30 percent of electricity consumed by cooperative members comes from hydroelectric, wind and sun power.

Tri-State recently issued a Request for Proposals for a sizable solar project, and there was interest from local developers. But this month the 100-megawatt Spanish Peaks solar project north of Trinidad was chosen. This is Tri-State’s fourth utility-scale solar project.

The 660-acre project includes more than 300,000 photovoltaic solar panels on single-axis tracking arrays that follow the sun throughout the day. It will serve the energy needs of 28,000 rural homes.

“Tri-State secures renewable energy with the highest value at the lowest cost for our member cooperatives, and this is our largest, most cost-effective solar project to date,” said Mike McInnes, Tri-State’s chief executive officer, in a press release. “By developing renewable projects through Tri-State, our members take advantage of an economy of scale unavailable in smaller projects.”

The Spanish Peaks Solar Project is Tri-State’s second utility-scale solar energy project with juwi, the U.S. subsidiary of Germany-based renewable energy company juwi AG. The project is adjacent to the 30-megawatt San Isabel Solar Project in Las Animas County, Colorado, which was developed by juwi and began producing power for Tri-State in 2016.


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