SLV Rural Electric Cooperative CEO discusses rates, renewable energy

The San Luis Valley Rural Electric Cooperative (REC) held its annual meeting on Wednesday of this week, and one of the topics on the table was the 2020 announcement from the board of directors for Tri-State Generation and Transmission Association was a goal to cut wholesale rates by 8 percent by 2023.

The first step in reaching that goal was a 2 percent reduction in wholesale rates, which was announced in April of this year and will be retroactive to March. There are three components of that 2 percent rate cut: transmission demand, generation demand and energy.

The reduction in wholesale rates translates into a reduction in cost for REC. “We just got these numbers in April so we’re still working [on how this will translate into savings],” states Loren Howard, CEO of REC, “but because we are not for profit, any money that is saved will go back to our members.”   

The specifics of how those savings will be rebated to customers is currently under discussion. Howard states that a recommendation is being developed and will be presented to the board of directors of REC at their meeting on June 29, after which members will be notified of plans going forward. “The savings will be given back to members,” Howard emphasized.

On the topic of savings to members, REC has stated that their use of renewable energy sources is designed to save members on their energy bills. When asked to provide specifics about the amount of savings involved, Howard stated that REC has two power purchase agreements.

One power purchase agreement is with a small hydro facility located northwest of South Fork. According to Howard, that agreement, under which REC purchases power at a wholesale cost, accounts for about 1 percent of the power SLVREC provides. Because the power costs from the hydro facility are equal to Tri-State wholesale power costs, that facility does not save members any money but is a renewable energy resource.

The second agreement, with the Penitente Solar facility located west of Center, does save REC money as the cost for power is less than the wholesale cost. Penitente produces 2-3 percent of the kilowatt hours provided for members and results in, roughly, a small purchased power cost savings. Howard stated, “To the extent that we can find installations like that or negotiate agreements like that, we will.”

“We support renewable energy,” Howard states. “We have an active net meter member program for those members who want to put solar on their house. Our rates are also designed to make sure the people who put solar on their house are paying their fair share and other members of REC are not subsidizing those net meter installations. But if members want to put solar on their house, we support that. Almost every day, I get a new application where a member wants to put solar on their house or business.”

A second announcement made in 2020 by Tri-State Generation and Transmission addressed “partial-requirement contracts” that would allow member cooperatives to potentially self-supply more power than what their 5 percent current contracts with Tri-State allow. REC’s two existing power purchase agreements provide 4 percent of REC’s kilowatt hours.

Howard states that REC is looking for other installations to provide the additional 1 percent self-supply usage REC is currently allowed but operational considerations limit choices due to current federal rules of putting excess power “on the grid”.

The wholesale rate reduction goal of 8% by the year 2023 and allowance for partial-requirement contracts are part of a larger plan released by Tri-State in January of 2020.

Titled the Responsible Energy Plan, Tri-State commits to “implementing a clean energy transition that will expand renewable generation and reduce greenhouse gas emissions while ensuring reliable, affordable, responsible electricity for our member cooperatives and public power districts, and for the communities they serve. Our Responsible Energy Plan (REP) is based on a vision for the future in which the benefits of an economy-wide energy transition – from cleaner air to economic opportunity to a greener grid – are shared with everyone.”

Anyone interested in reading the plan in its entirety can do so by going to Tri-State-Responsible-Energy-Plan-Jan2020.pdf (tristate.coop)


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