Dive Brief:
- Delta-Montrose Electric Association (DMEA) of Colorado will sell stock in order to raise funds to leave the service of Tri-State Generation and Transmission Association following concerns that the power provider should be delivering a cleaner mix of energy, according to The Colorado Sun.
- DMEA's decision comes just two years after Kit Carson Electric Cooperative in New Mexico exited its agreement with Tri-State G&T after agreeing to a $37 million fee. The utility still believes its customers will save tens of millions of dollars.
- Rocky Mountain Institute (RMI) in August concluded the Tri State's 1 million consumers could save more than $600 million through 2030 by retiring some of its fossil-fuel plants and moving toward renewables.
Dive Insight:
DMEA won't be disclosing the cost to buy out of its contract — but it could be steep based on Kit Carson's fee, according to the Denver Post. However, the rural cooperative believes the shift towards renewables will lower rates enough to make up for the charge.
The utility sees addressing power supply costs as "essential for long-term rate stabilization for our members," DMEA CEO Jasen Bronec said in a statement. The utility voted this week to allow a limited stock issue in order to raise cash to buy out of the Tri-State deal.
RMI's study estimated $600 million could be realized through avoiding the operating expenses and fixed costs of its fossil-fueled power plants, which are contributing to rate increases for electricity customers in Colorado, Nebraska, New Mexico and Wyoming. In those states, RMI said rates rose by more than five times the national average between 2007 and 2016.
Perhaps unsurprisingly, Tri-State was critical of RMI's analysis and said they were given a copy of the research only shortly before it was published.
"The RMI report does not equate to the thorough resource modeling in our integrated resource planning," Tri-State senior manager of communications Lee Boughey said in a statement. "We encourage RMI to suggest scenarios and engage in our inclusive public process next year."