Update on the Power Supply Committee
DURANGO, Colo. - As planned, consultants retained by the Power Supply Committee (PSC) of La Plata Electric Association (LPEA), have completed their initial studies, and the LPEA Board of Directors reviewed the findings in Executive Session during the Board’s April Committee of the Whole, with full public presentations made during the open board meeting today (April 17, 2019).
The PowerPoint presentations from the consultants will be posted on the LPEA website, www.lpea.coop. Also, the “live stream” of today’s meeting will be archived and available for review on the website.
Specific consultant findings, including financial information, will not immediately be released to the general public to avoid impacting future negotiations with alternative power suppliers and current primary power supplier Tri-State Generation and Transmission.
“Initial studies by the consultants indicate that there is potential savings for LPEA to engage with alternative power suppliers while maintaining reliability,” said LPEA CEO Mike Dreyspring. “But we’ve got more work ahead of us. We need to have further study of the transmission system – the availability of us to get electricity to our service territory from out of the area – and the costs affiliated with that.”
Dreyspring also noted that different generation mixes could impact delivery costs, and LPEA needs to secure a thorough understanding of potential financial transactions between LPEA and suppliers.
Taking the aforementioned into consideration, the Board voted in favor of the following directives to move the process to the next step:
• LPEA will obtain indicative pricing from wholesale suppliers with a fuel mix that is designed to meet LPEA’s 50-30-70 goal, and includes some level of local renewable generation.
• LPEA staff will determine costs and data needs of a transmission study to be completed by Western Area Power Association and Tri-State Generation and Transmission to determine how they could serve LPEA transmission needs if LPEA were to purchase power on the wholesale market.
• The LPEA Board directed staff to host at least one public forum in each of the four Board Districts to update members by reviewing the consultants’ public reports and discuss the planned next steps.
• The LPEA Board directed staff to put together a pro-forma spreadsheet to demonstrate what the potential buy-out and alternative power supply costs will do to LPEA’s members’ rates, and how all affect LPEA’s cash flow.
“LPEA will be working over the coming months on these next steps,” said Dreyspring.
“We already had planned on organizing public presentations for members so we, LPEA, can tell you more about trends in the market and expand on what the electricity generation going forward might look like, so we’re glad the Board supports that effort.”
In September 2018, the LPEA Board formed the PSC specifically to study the challenges and opportunities of power supply, assess the value of LPEA’s contract with wholesale power supplier, Tri-State Generation and Transmission, and identify options for increasing LPEA’s flexibility to provide more local renewable generation.
Following an extensive search, and a thorough Request for Proposals process overseen by the Power Supply Committee, the LPEA Board of Directors authorized retention of two outside consulting entities to assist in study of LPEA’s future power supply options.
• Albuquerque, N.M.-based Enchantment Energy Consulting, Inc. and Rio Energy, LLC (as partners for purposes of the LPEA project) - to conduct a study of the wholesale power contract between LPEA and Tri-State Generation and Transmission.
• Salt Lake City, Utah-based Energy Strategies - to conduct an analysis of wholesale power markets and potential opportunities that may be available to LPEA.
LPEA’s Power Supply Committee was made up of three voting LPEA directors, Britt Bassett, Tim Wheeler and Kohler McInnis and one non-voting director, Jack Turner, along with two LPEA management team members, CEO Dreyspring and Dan Harms, manager of rates, technology and energy policy.
LPEA, a Touchstone Energy Cooperative established in 1939, provides to its more than 30,000 members, with in excess of 42,000 meters, safe, reliable electricity at the lowest reasonable cost, while being environmentally responsible. For additional information, contact LPEA at 970.247.5786 or visit www.lpea.coop.