19th annual Headwaters conference examines Energy: Supply & Demand

“I’m very nervous about our current power supply”

This is part one of a two-part look at the future of electrical energy in the Gunnison Valley and elsewhere, as revealed from the 19th annual Headwaters Conference held at Western State College last weekend.

Seventy years ago electricity was the force that helped rural communities across the American West realize economic growth and prosperity. Today, some energy experts believe electricity can be the force that will once again lead to economic prosperity, through a transition to new forms of power generation and greater conservation of resources.
In 1935, during the midst of the worst economic downturn in the nation’s history, President Franklin D. Roosevelt made an executive order to create the Rural Electric Administration.
That administration’s purpose was to provide cheap loans to help power companies construct transmission lines into rural areas. At the time only 10 percent of the country’s rural areas had electricity.
The Gunnison County Electric Association (GCEA) was envisioned in 1936, and the first power began flowing through local lines in 1941.
GCEA chief executive officer Mike Wells says, “Generation and distribution of electricity has been the biggest economic development tool the country has ever deployed. No other device has added so much to our standard of living and economic success than power.”
Delta/Montrose Electric Association (DMEA) general manager Dan McClendon says rural communities could once again see growth and economic prosperity from investing in energy. “Here, 70 years later, I think rural areas can do the same thing by developing renewable resources at the local level,” he says.
International Renewable Resources Institute director Alex Eaton agrees, saying, “America could poise itself again to have amazing economic growth and prosperity… We are sort of on the verge of a great New Deal.”
Clean Energy Economy for the Region executive director Heather MacGregor said the transition to a renewable energy future will be challenging, but meeting that challenge is akin to rafting or skiing. The first instinct is to look at the obstacles, the rocks and the trees. But a good skier focuses on the line between the obstacles.
But not every line down the mountain is the same, and some are more challenging than others.

Energy crisis
In 1892 electricity cost $3.20 per kilowatt hour (kw/h). Today, GCEA charges about ten cents for the same amount. “This is why we tend to waste electricity,” says Randy Udall, a former director of Aspens’ Community Office for Resource Efficiency and a guest speaker at the Headwaters Conference.
Udall says within the last 50 years power demands have skyrocketed, not only because of increasing population, but also due to an interconnected demand for the conveniences of modern life—televisions, refrigerators, washing machines, and fog lights.
Eaton agrees. “Nobody in this room wants energy. It’s a very abstract concept. What we want is the services it provides,” he says. “We have been blessed with reliable, inexpensive power and we take it for granted.”
Citing a report from the Alliance for Energy Efficiency, McClendon says the average U.S. household spends $938 a year on electricity for space heating, $204 on lights, $109 to run the fridge, $212 for air conditioning, and $212 for electric water heating.
While some electricity distributors, GCEA and DMEA included, currently promote energy conservation, Eaton says many consumers would rather turn up the heat than put on a sweater. “Why would we? They’re always itchy… It feels strange to deny ourselves services that are available,” he says.
Wells says he doesn’t think the populace is ready for the lifestyle changes that would save enough energy to prevent the creation of large new power plants. “If we could achieve 20 percent reduction through conservation, we would still need many more power projects to satisfy peoples’ needs,” Wells says.
Citing a report by the Colorado Energy Forum, Wells says due to an increase in population the state is projecting the need for “an additional 4,900 megawatts of electricity—that’s a 40 percent increase, by 2025.”
Wells says Tri-State Generation and Transmission, which provides the power GCEA distributes, does not produce enough of its own electricity to meet the needs of its 1.4 million consumers. Therefore the electric cooperative must buy energy on the open market, which costs more for consumers.
Wells says Tri-State is anticipating at least a 4 percent increase in the cost of power next year because of the increasing cost of buying energy on the open market. He says the GCEA board of directors hasn’t approved any rate increase yet, but will ultimately have to absorb the cost increase from Tri-State as well as additional administrative and maintenance expenses on the local side.
Furthermore, some companies that sell energy on the open market are closing plants as operational costs increase and a carbon tax looms on the horizon under the new presidential administration. Excel Energy, for instance, has plans to close two coal power plants. The reduction in supply and the increase in demand naturally drives up costs, Wells says.
Tri-State is currently seeking approval for several new power plants of its own. Two proposed coal-fired power plants in Kansas were recently denied approval by the state’s Department of Public Health, although Tri-State is appealing the decision. A third power plant has been proposed in southeast Colorado, but has only just begun the planning process. Even if the plant were already approved, Wells says it would take quite a while to build.
Tri-State senior manager of communications Lee Boughey said it would take 48 months of construction before any power would be produced at a new coal power plant.
Wells said he didn’t believe conservation, efficiency, and local renewable energy generation would be enough to meet the demand for energy in the short-term future. “These efforts alone will not be enough. Coal will be required to meet the demands of the future,” he said.
“I’m very nervous about our current supply of electricity,” Wells continued. He said the rural west was facing aging facilities, insufficient transmission lines, and difficulty even financing new power projects. Without an additional power supply soon, Wells said, the Gunnison Valley could face unscheduled outages, and higher rates to boot.
“Power generation is what’s needed short-term… We could be facing some real serious power delivery problems as early as 2009 or 2010,” warned Wells.

Tri-State’s clean(er) coal
While Tri-State continues to pursue building a new power plant, Boughey says, the company is also looking to make its existing system cleaner and more efficient.
Last month Tri-State Generation and Transmission was recognized as a Bronze Achiever in the Colorado Environmental Leadership program for its efforts at reducing the waste and environmental impact at the Nucla power plant in southwest Colorado (in photo on previous page.) The plant rests outside the town of Nucla, population about 700, in Montrose County. The Nucla Station generates a base load of 100 megawatts of electricity.
The recognition by the Colorado Department of Public Health and Environment (CDPHE) is the first of its kind to be given to an electric utility provider since the Environmental Leadership program was created in 1999.
According to the CDPHE’s website the Bronze Achiever classification “recognizes facilities that have made significant achievements in improving the environment of Colorado.” The bronze status also means the plant has had no regulatory violations for at least a year, and has made pollution prevention efforts such as increasing energy efficiency, minimizing waste and conserving water.
Wells says the award was given primarily for the Nucla plant’s reduction of hazardous waste. “It was my understanding… they’ve cut down the hazardous waste by magnitudes. What used to be a 55-gallon drum is now a Coke can,” Wells says.
Local clean energy advocate Bruce Driver says the bronze recognition for the Nucla power plant is a great achievement, and shows the progress Tri-State is making at reducing pollution from coal power. But, he says, coal power is still a dirty source of energy. “It’s a pretty clean plant, unless you’re talking about carbon. It’s still coal, and it still has a big carbon footprint,” Driver says.
Driver is a member of a local citizens group called the Alliance for Clean Energy, which advocates for clean energy production from renewable resources.
Making a large reduction in carbon emissions is required to get a Silver or Gold rating, and reaching those levels is a large hurdle for a coal facility, says Tri-State spokeswoman Karly Nelson. “As a coal-based facility it takes a lot more effort in terms of the technology required,” she says, referring to pollution prevention technology like carbon sequestration, which has yet to be implemented at a coal power plant in the United States.
And that is technology Tri-State is currently researching. Boughey says the company is testing an algae-based carbon-capture system for the proposed facilities in Kansas, and is also investing in other forms of carbon sequestration technology.
Boughey says, “A big chunk of energy efficiency Tri-State pursues has nothing to do with our consumers. It’s making transmission lines more efficient so we have less losses, and better efficiency in our plants to make our overall system more efficient. What we can do in that regard can many ways eclipse what consumers do in aggregate for efficiency.”

Part 2 of this series will take a look at the alternative options to coal-based power and the need for greater consumer-level energy efficiency. From Delta Montrose Electric, which is focused on building local renewable energy sources, to the island of Samso, Denmark, which generates 100 percent of its power from renewable sources, Part 2 will consider what others are doing to meet the new energy future, and what might be holding them back.