The move to renewable electricity and away from coal may have financial as well environmental benefits. That is the lesson at Tri-State Generation and Transmission Association, a power-supply rural electric cooperative which serves four states and 41-member distribution companies in Colorado (where it is headquartered), Wyoming, New Mexico and Nebraska.
Since the start of the electricity era, coal has been king. When the energy crisis struck 50 years ago, coal was not only the king, but also the savior.
At that time, the national fuel mix was roughly 45 percent coal, 25 percent oil, 10 percent gas, 10 percent hydro, and 5 percent nuclear. It was essential to cut oil way down and nuclear was becoming a dirty word. Coal — indigenous, bountiful and cheap — was the answer to utility fueling needs. Global warming wasn’t on the table.
Patriotic Fuel Choice
There was a surge in coal use and the rural electric co-ops added more coal. They were often close to the mines and, besides, coal was a patriotic fuel choice.
Wind and solar weren’t options. Solar cells hadn’t been developed yet. The hope for solar was in concentrating heat with mirrors (thermal solar).
No one knew how to make a large wind turbine or even what it would look like. Ideas included multi-blade, farm-type windmills and an eggbeater-shaped device.
A unique U.S. Department of Agriculture program, Empowering Rural America (New ERA), financed under the Inflation Reduction Act, is making the decisive break with coal possible and attractive to the co-ops.
In late October, USDA granted Tri-State a whopping $2.5 billion financing package, including low-cost loans and grants. The loans and grants are the result of years of work, led by Tri-State and other stakeholders, to support legislation to assist electric cooperatives in their energy transitions.
The results will be dramatic: Tri-State will invest in over 1,200 megawatts of solar, wind and storage, and will retire — along with those already retired — coal plants in three states, while continuing to participate in the low-cost Laramie River Station, a coal plant in Wyoming. It will also deploy new renewables across the four states it serves.
Lisa Tiffin, Tri-State senior vice president for energy management, told me, “We are currently planning to add 700 megawatts of wind, 240 megawatts of solar, and 300 megawatts of storage.”
Todd Telesz, chief financial officer, said the move to renewables, using the new funding, will enable rates for Tri-State customers to be 10 percent lower than a business-as-usual scenario by 2034.
Rural Communities Are Winners
CEO Duane Highley, enthused, “This is monumental for Tri-State, for our members and for the future of rural electric cooperatives. Most importantly, this is all about our rural communities, who are the beneficiaries, and how we can accomplish an accelerated energy transition that ensures reliability and in an affordable manner that finally allows rural Americans to own the generation and directly see the benefits.”
For the recently retired coal plants, some of the new funding will be used to offset “stranded assets.” This is a term used to describe financially viable units that are taken out of service for other than economic or technical reasons, like the shift away from carbon-intensive coal to renewables. Coal stations that have been closed or are going to close in the next five years represent about 1,400 megawatts of Tri-State’s more than 4,500 megawatts of capacity.
These are the stations, which have been closed or are facing closure over the next several years: Escalante Station, New Mexico, retired end of 2020; Craig Station Units 2 and 3, Colorado, set to close in 2028; and Springerville Unit 3, Arizona, scheduled to close in 2031.
“The resource acquisition period is 2026 to 2031. The coal retrenchment has already begun and the last of the identified coal plants will close in 2031,” Tiffin said.
New plant will be spread out over the states served by Tri-State. Tiffin said she is a great believer in diversity both in terms of plant location and type of resource.
Dispatchability of resources remains critical to reliability, and Tri-State will still get energy from its share of Laramie River Station, where the cooperative has also supported the state’s Integrated Test Center to demonstrate carbon capture, utilization and storage technologies.
She also told me that Tri-State had received its “obligation letter” that would assure the program would go ahead as planned.
This transition will have support across the aisle, from liberal climate hawks and conservative farm-state legislators. The energy transition in rural America is reducing dependence on coal, even if coal isn’t yet dethroned.
