• Thu. Nov 24th, 2022

Best: Questions about Colorado’s second largest utility company

ByKarla E. Kowalski

Nov 24, 2022

The Aspen Times

Grocery stores have consolidated. The opposite happens with utilities. We see some of them starting to unravel. In particular, the question is whether Colorado’s second-largest electric utility, Tri-State Generation and Transmission, will survive this major inflection point in how we generate and consume electricity.

Xcel Energy, Colorado’s largest utility, seems secure in its business model even as the world of electricity is being turned upside down. It could be the last coal-fired power plant still standing. Comanche 3 – sometimes called Pueblo 3 – is scheduled to be retired by the end of 2030 at the latest. However, the utility has been fleeing coal since at least 2017, when falling wind and solar prices became apparent. It reliably gives shareholders a yield of around 9%.

Tri-State has no private investors. It was founded in 1952 by electrical cooperatives to transmit electricity. Over time, it added coal-fired power plants and other energy sources to its portfolio. It supplies power to 42 electric cooperatives in four states, including 17 in Colorado.



In 2018, Xcel provided 52% of Colorado’s electricity and Tri-State 18%, followed by Colorado Springs Utilities and then other smaller utilities.

A decade ago, Tri-State was sluggish and calcified. At the time, it was still attempting to build a giant coal-fired power plant in Kansas. Fortunately for its members, Tri-State failed. By 2019, it had pledged to embrace change — which includes closing its last coal-fired power plant in Colorado by 2030.



The changing perspective on rural Colorado served by the cooperatives was evident at the Colorado Rural Electric Association’s annual conference in late October. The very name of the conference, Innovations Summit, reflected the recognition of change.

It lacked undercurrents from just a few years ago, when panel moderators made eye-rolling jokes about climate change. This year, a farmer who said his tractor was already worth more than his house opposed the idea of ​​electrifying farm equipment.

But that was not the general tenor. Rural cooperatives mostly accept that we need to figure out electricity – and energy more broadly – without putting emissions into the atmosphere. They also recognize that electricity will play a wider role in transportation and buildings.

Some cooperatives move faster than others. Holy Cross Energy, the cooperative with 50,000 members in the Vail, Aspen and Rifle areas, has a bold goal of delivering 100% zero-emission energy by 2030. Bryan Hannegan, the managing director, outlined his cooperative’s plans for microgrids. Holy Cross is one of five Colorado cooperatives independent of Tri-State.

As for Tri-State, 15 years ago it had a CEO who ridiculed the idea of ​​climate change on national television. Now it has a CEO who is open about the way forward to even deeper emissions cuts.

If cost-effective technology for emission-free electricity is 80% to 90%, the answers to 100% targets remain unclear. Some technologies or set of technologies need to be scaled up to accommodate the fluctuations in renewable energy.

Deeper thinkers about the energy transition, including Aspen-born Hal Harvey, co-author of The Big Fix, say nuclear power may provide the answer. It’s not cost effective now, but it wasn’t solar power in the past either. Geothermal energy is another candidate. Both were items on the agenda of the conference.

It was hydrogen too. Duane Highley, Tri-State’s chief executive since 2018, said he sees a potential use of hydrogen at Craig when coal plants close. It could use the existing infrastructure, including transmission lines, and leverage many of the same skills as the existing people at Craig. But here, too, the technology is not quite there yet.

Who will Tri-State’s customers be in 10 years? Tri-State has lost two customers to Denver-based Guzman Energy in recent years, and neither co-op seems to be looking back. Now two other tri-state co-ops, La Plata Electric and San Miguel Power, both plan to purchase significant amounts of electricity from new sources.

Other cooperatives may go entirely. United Power, which serves outlying areas north of Denver, represents more than 20% of Tri-State’s total demand. The co-op insists it will disappear from Tri-State by May 2024, once federal agency officials decide how much Tri-State must pay to keep the remaining members unharmed.

Tri-State has tremendous value in its transmission lines. However, its coal-fired power plants appear to be a liability. It has about $4 billion in debt.

Will Tri-State look similar by 2030, only slimmer and even more agile? Or will it have a whole new business model?

Allen Best publishes Big Pivots, an e-journal focused on the energy and water transitions in Colorado and beyond. Visit bigpivots.com for more information.

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