KCEC: lower prices & better future

To the editor,

La Plata Electric Association candidates Jack Turner, Jeff Mannix and Holly Metzler are proposing that we pursue cheaper electricity prices; read on, then please vote for them. Those of us whose electricity bills soared this past winter are open to information and options, because we can’t afford to keep paying more.

According to John Adams (our second president) “facts are stubborn things.” Here are a few facts (see online version for footnotes), but please do your own research about the important issue of energy use.

Blended wholesale rates from LPEA’s current electricity provider Tri-State have doubled since 2000 (an increase 2.5 times the rate of inflation) from $35.40/MWh (megawatt-hour) to roughly $74/MWh1.

“Tri-State G&T is now charging up to 212 percent more for electricity than nearby wholesale competitors in the same region,” according to a study2 by The Western Way, which notes that “even higher electricity rate increases for rural consumers appear inevitable.” Tri-State’s primary fuel source – coal – increasingly cannot compete with cheaper technologies3. Unfortunately, the contract the LPEA Board signed with Tri-State allows unlimited rate increases until the year 2050. On the open market, far less expensive fixed-rate contracts are available – like the one signed by Kit Carson Electric Cooperative (KCEC) in Taos with Guzman Energy.

After many years of accepting increases to our electric bills, in 2018 our LPEA Board finally stepped up to its obligation to provide us co-op members with the cheapest rates by studying alternative vendor options. But amazingly, there’s pushback: some folks claim that our rates will somehow skyrocket if we change to a cheaper vendor. Others insist that our change model, KCEC, is racked with rate increases and pending bankruptcy after their switch to open market vendor Guzman Energy. Are these facts, or falsehoods? Well, let’s have a look.

According to the recent report of the Institute for Energy Economics and Financial Analysis4 “the power purchase agreement with Guzman immediately led to lower annual wholesale electric prices for KCEC: $67.25 per megawatt-hour (MWh), a 15 percent drop from the $79.17/MWh Tri-State had charged the co-op the year before.” This $67.25/MWh rate includes a debt payment KCEC owed Tri-State for exiting their contract. When it’s paid off, their rates with Guzman will fall to a fixed average around $47/MWh from 2022-26. KCEC is not facing bankruptcy nor experiencing rate hikes; quite the reverse. KCEC is paying less, headed down, while LPEA’s $74/MWh is headed up in contract with Tri-State.

Freed from Tri-State’s contract prohibition on community generation, KCEC is busy installing 35MW of solar generation, which will drop their prices even further when equipment is paid off. LPEA enjoys the same premium solar potential, but our Tri-State contract prohibits further community solar.

The U.S. government’s National Renewable Energy Laboratory has partnered with KCEC to create a template to help co-ops follow KCEC’s path away from unsustainable high-priced contracts (like LPEA’s). The template will assist co-ops in developing their own community-owned generation facilities, create jobs and dramatically lower prices. KCEC is one of just nine teams selected to participate in this “Solar Energy Innovation Network”5.

Thank you, KCEC, for your bold leadership. Reader, do your research, share this please and vote.

– Kirby MacLaurin, Durango

 

1source: LPEA staff via email.

2https://static1.squarespace.com/static/5734cf71b6aa60fb98e91bf2/t/5ca64ecc53450a53329bd62e/1554403022229/TWW+Rural+Energy+Report+4-4-2019+(FINAL).pdf

3https://www.utilitydive.com/news/pacificorp-shows-60-of-its-coal-units-are-uneconomic/543566/

4http://ieefa.org/wp-content/uploads/2019/04/How-Kit-Carson-Electric-Engineered-a-Cost-Effective-Coal-Exit_April-2019.pdf

5https://kitcarson.com/electric/building-a-resilient-energy-roadmap-for-rural-electric-cooperatives.