The Crested Butte News Serving the Gunnison Valley since 1999
The great 2024 Gunnison County Electric Association election is underway. Co-op members have until June 18 to get their physical ballots back or until June 16 to submit an electronic ballot.
While District 6 incumbent Polly Oberosler is running unopposed, the District 7 at-large seat is empty and three people are running for that position. Frank Stern, Shannon Hessler and Edward Howard have all thrown their hats in the ring. The Crested Butte News has been asking those three questions to provide voters a better understanding of their positions on the issues. All GCEA members are eligible to vote.
—Mark Reaman
FRANK STERN
How can you and the board ensure reliable and cheap electricity for GCEA members? Are you comfortable with the current rates?
GCEA has some of the highest electricity rates in the state. I am not comfortable with that position. A big factor in these high rates is the low density of its customers – it costs a lot more to serve customers in rural areas than in dense cities. This largely is unavoidable. However, I would like to make sure that GCEA is considering non-wires alternatives to serving remote customers, which include distributed energy resources and microgrids. These have been used for decades and are increasingly being used by utilities to reduce costs.
We also need to keep a close eye on Tri-State’s financial situation. As I discussed last week, Tri-State has had its credit rating downgraded by all three ratings agencies once or twice, which increases borrowing costs, which lead to higher rates. I’m not advocating leaving Tri-State, but GCEA should consider leaving Tri-State, but we should have a Plan B.
Another thing GCEA could do to reduce customer costs is to be more proactive in encouraging use of its existing time-of-use (TOU) rates and investigate other rate designs. TOU rates have one rate for off-peak periods and another for on-peak, as opposed to a single rate for all periods. This reflects how GCEA gets charged for its electricity. With the traditional flat rate, on-peak use is charged less than it costs, and off-peak use is charged more than it costs. Customers using TOU rates have incentives to shift usage to one peak. This both saves them money directly and reduces average rates. Our nearby co-op, San Miguel Electric Cooperative, is taking a more pro-active approach to TOU rates.
Should the GCEA be doing more to “green” its energy grid and supply? How?
GCEA has strategic goals for 2030 of 70% renewable energy and reducing greenhouse gas emissions by 90% compared to a 2015 baseline. I support these goals to help mitigate climate change.
For GCEA to meet its strategic goals and maintain reliability while keeping its already high rates from going higher, we are going to have to rely on the outside world, as I discussed last week. Costs of electricity generation, like cars, are subject to massive economies of scale. The electric utility system and the rural co-operative system are great examples of INTERdependence, working together for the common good.
Also, GCEA’s service territory does not have particularly good renewable resources. Wind is not nearly as good as in eastern Colorado or Wyoming, solar resources suffer from snow and limited site availability, hydro and geothermal are limited. There are likely to be some specific situations for local renewable generation, like the Taylor hydro project in progress.
Fortunately, GCEA’s main provider of electricity, Tri-State has made an impressive change in direction under its new CEO. It is making excellent progress towards its goals of 80% reduction in CO2 emissions associated with wholesale electricity sales in Colorado and 70% clean energy supplied to members system-wide by 2030. If Tri-State continues to make good progress towards these goals, along with existing and planned local renewables, GCEA’s grid will be substantially greener and GCEA should meet its strategic goals.
Would you advocate leaving GCEA’s wholesale energy supplier, Tri-State, like some other co-ops have done? Why or why not?
Because of the impressive course correction I discussed above, I think staying with Tri-State is likely to be the best approach to meeting its strategic goals without increasing rates. Also, GCEA signed a 44-year contract with Tri-State in 2006. GCEA will not be able to exit this contract without paying an expensive contract termination fee. While some bigger Tri-State members have recently left or are leaving Tri-State, it is unclear that any have financially benefited. A small co-op like GCEA, would be challenged trying to go it alone.
However, we should have a Plan B in case things change for the worse.
Are you a fan of the proposed Solar Farm by the Baxter Gulch trailhead?
The project is helping the Town of Crested Butte and others meet climate action goals and is not increasing overall rates, so it makes sense for GCEA to support it.
Shannon Hessler
How can you and the board ensure reliable and cheap electricity for GCEA members? Are you comfortable with the current rates?
Electric rates are determined largely by Tri-State, our power provider. A way to stabilize rates and ensure reliability is to increase the renewables in our electric portfolio. Anyone who fills up their gas tank knows that fossil fuel prices fluctuate up and down constantly, while renewable energy sources are not subject to the same price volatility. I also will underline that increasing the efficiency of the energy we are using – no matter the source – is paramount to saving people money and increasing reliability.
Should the GCEA be doing more to “green” its energy grid and supply? How?
Tri-State, GCEA’s power supplier, has a Responsible Energy Plan which details their path towards 50% clean energy by 2025 and 70% clean energy supplied to members by 2030. GCEA has a role to continue adding “green” electricity through local renewable projects like the Oh Be Joyful Solar Farm and Taylor Park Hydro. Local electricity production means local jobs and income are created here. GCEA should also be creating opportunities for rooftop solar to be more financially accessible to homeowners through programs like the On-Bill Repayment Program.
It is important to emphasize that greening the grid is only a third of climate action planning – the other two steps are to continue to electrify and increase efficiency, and they must all occur simultaneously. It won’t matter in the long run if we have a grid powered by 100% renewable energy in the next several decades if we are still using fossil fuels to heat our homes and drive our vehicles. I believe that GCEA and Tri-State have an additional role to play with rebates and incentives for members who choose cost-effective electric appliances, electric heating, and electric vehicles.
Would you advocate leaving GCEA’s wholesale energy supplier, Tri-State, like some other co-ops have done? Why or why not?
As a Director on the Board, it would be my job to work with the other members of the Board to achieve the goals set forth by our community. Other co-ops have left Tri-State with goals to increase local governance over their electricity and to add renewables more quickly to their electric portfolio. Our community values renewable energy, grid reliability, and energy independence. I think that to achieve these goals, there are avenues to explore without leaving Tri-State. Some co-ops are exploring partial buyouts from Tri-State, which means that they can increase their local generation cap.
I would advocate for our community values – including considering a partial buyout from Tri-State.
Are you a fan of the proposed Solar Farm by the Baxter Gulch trailhead?
Yes, absolutely. In addition to providing solar energy for the Towns of Mt. Crested Butte and Crested Butte, I think the visibility of the solar array as you’re driving into Crested Butte is important. I think as a tourist destination, sustainability projects must be visible to our visitors. Normalizing things for tourists like renewable energy, recycling, composting, reusable water bottles, etc., may allow us as small communities to have an outsized impact.
Edward Howard
How can you and the board ensure reliable and cheap electricity for GCEA members? Are you comfortable with the current rates?
Affordable electricity is one of the primary goals of the board. GCEA is a co-op meaning that everyone who has a metered account with GCEA, is also an owner. Because of this, GCEA is not driven to make a profit to satisfy outside shareholders, they are in business to serve the members and provide electricity as affordable as possible. The entity does, however, need to recover the cost of electricity, the distribution grid infrastructure, and the administration of the business as well as maintain net margins to meet debt service and covenant agreements. By net margin, I mean the excess of the revenues over the costs. GCEA returns excess margin to us as patronage dividends. These dividends can be cashed in at a discounted amount or held to maturity and redeemed at full value. I am comfortable with the current rates because I think that the board of GCEA has always taken this approach.
Should the GCEA be doing more to “green” its energy grid and supply? How?
I think the best way to increase the percentage of green energy into the GCEA power grid is to continue to encourage and work with Tri-State to bring more green energy into the portfolio. GCEA covers a large distribution area and the distance between many of the meters is significant, this combined with a membership that is approximately 8,980, means that the costs to maintain and upgrade the distribution system is spread over one of the smaller co-op memberships. In my opinion balancing affordability with reliability and safety means that the board needs to be cautious in its pursuit of local green energy projects. It can be difficult and costly to get power generated by local projects to our grid; because of factors including, but not limited to, distance, power line size and topography. Therefore, it is more cost effective, and the economies of scale are much better if the board encourages and supports Tri-State’s investment in green energy.
Would you advocate leaving GCEA’s wholesale energy supplier, Tri-State, like some other co-ops have done? Why or why not?
I do not advocate leaving Tri-State. Tri-State is a co-op and GCEA like all the other members of Tri-State is an owner. The member-owners of Tri-State over the years agreed to build a generation and transmission system and invested approximately $5.8 billion, as of last year, in this system, most of which was done by borrowing long-term debt. As part of this investment, the member-owners committed to long-term contracts to purchase energy from Tri-State to pay for this investment. Leaving Tri-State means having to buy out the long-term contract as well as forfeiting our ownership equity. Based on my very basic calculation from information included in Tri-States 2023 10-K concerning the contract withdrawals of three members, I estimate that this would cost GCEA in excess of $20 million. This contract buyout would have to be recovered from us, the members of GCEA. The current rate from Tri-State includes all the costs related to marketing, transmission, and maintenance of the system designed to get the energy to us. Leaving Tri-State means that GCEA would have to bear those costs in addition to the market cost of the energy. Further, third-party marketers are beholden to their investors and by necessity have a profit motive rather than working on behalf of us, the GCEA members.
Are you a fan of the proposed Solar Farm by the Baxter Gulch trailhead?
Personally, I don’t like looking at fields of solar panels, I think they’re ugly. However, I realized that my personal views may be in the minority. I do understand the importance that this project could be to the Town of Crested Butte and that it is one of the viable green energy projects in our area. That is why there are public hearings to assess the pros and cons of such projects.
