The Crested Butte News Serving the Gunnison Valley since 1999
Hydro a success, solar still in the works
By Mark Reaman
Local, Gunnison County-centric renewable energy projects are not easy to pull off and operating margins can be thin. The Gunnison County Electric Association (GCEA) is involved with two such projects, a hydroelectric project at the Taylor River dam and a potential solar farm just south of Crested Butte.
While the hydro project is up and running, producing electricity that is saving GCEA members a bit of money, the solar array remains a question mark. Construction companies are compiling solid numbers to determine the cost of construction of the Oh Be Joyful Solar Project located near the Baxter Gulch Trailhead just south of Crested Butte. If it pencils out, the expectation is that it will be built in 2025 while federal tax credits for such projects are secure.
GCEA strategy execution specialist Matt Feier said the Taylor Dam hydro project has been on the radar as a possibility since the early 1980s. “We are happy to see it finally up and running,” he said. “Further, the new facility has been running smoothly and as expected since startup.”
The $4.6 million project located at the Taylor Park Dam is a partnership between GCEA and the Uncompahgre Valley Water Users Association (UVWUA). The new 500-kilowatt (kW) hydroelectric turbine and generator at the site will operate at or near full capacity 24 hours a day, year-round, to produce an average of 3.8 million kilowatt-hours (kWh) annually. That amount of generation compares to some 2,500 kW (2.5 megawatt) fixed tilt-solar arrays and, according to Feier, will provide clean electricity to approximately 500 local homes and businesses in Gunnison County.
The project is already considered a success that is saving individual GCEA co-op members about $4 a year at this time. That savings will increase once construction debt is paid off. The hydro project works in large part because electricity is produced all the time, day or night, including during so-called “peak demand times” and so GCEA’s bill from wholesale energy supplier Tri-State Generation and Transmission Association has seen a drop.
Feier said GCEA had always planned for and expected some savings with the hydro project.
Feiet explained that the savings are incurred because Taylor River Hydro is expected to (nearly always) operate during Tri-State’s peak window, thereby allowing the Taylor River Hydro facility to offset Tri-State’s peak demand charges.
“In November, the new facility ran at 97.74% of its full monthly capacity, which is better than we budgeted,” he said. “In November, the new facility reduced GCEA’s peak demand by 491kW resulting in a $5,918.51 savings in peak generation demand charges and $11,977 in energy charges on GCEA’s November bill from Tri-State.
“Overall costs include annual depreciation of the upfront construction cost, interest on debt to finance the project, insurance, fees to the Bureau of Reclamation, preventive maintenance, an internet connection for remote monitoring and a small amount of labor for monitoring and visual inspection,” Feier continued. “Based on an estimated 3,800,000 kWh/year of production, we expect to avoid approximately $122,000 in energy charges and approximately $73,000 in peak demand charges from Tri-State. The difference between the Tri-State rate and our cost of producing power will net GCEA an annual savings of approximately $45,000.”
Until the debt incurred from the construction of the new facility is fully paid and the facility is fully depreciated, individual GCEA members may realize on average, a savings of approximately $4/year. That’s not a lot but Feier said that operations and maintenance expenses associated with the new facility are expected to be and remain low. “Once construction debt is paid and the facility is depreciated (and Taylor River Hydro is only paying operations and maintenance expenses), power generated from this new facility is expected to cost significantly less than the equivalent amount of power purchased from Tri-State,” he said.
From hydro to solar… a different situation
In an ideal world, a solar array near Crested Butte would provide the same sort of efficiency and savings to customers. While that might be the case eventually, the Oh Be Joyful solar project that has been in the works for years is still being evaluated. But that evaluation cannot take too much longer given the threat of cost-cutting tax credits that could go away with the new Trump administration.
A geotechnical analysis of the site has been completed, and it was determined that basically, the site is not sitting on shallow bedrock which is a good thing for construction.
“Prospective firms are now working to provide firm construction bids in early 2025,” said Feier. “Once we receive these firm bids, we’ll be in a better position to decide if this project will move forward. If the bids look acceptable, GCEA is eager to make this project happen in 2025 to take advantage of better tax credits, as the solar tax credit/direct payment may be reduced in 2026. The determining factor in the cost will be if GCEA can absorb the cost of the new array without raising rates for the membership as a whole. We have run scenarios where this array works for GCEA, cost-wise, but we won’t know if our scenarios are accurate until we see firm construction bids.”
The original interested solar provider, Outshine Energy is still involved and acting as the general contractor. They have a lease with the town for that property.
“We’re excited to see this project continue to push forward after several years of planning and collaboration,” commented Crested Butte sustainability coordinator Dannah Leeman. “Staff will continue to engage with GCEA and Outshine Energy to see the project through.”
The change in the national political winds is also a factor in the solar array according to Feier. “The general assessment is that the current tax credit (30% plus potential bonuses) should hold through 2025 because tax credits are set and adjusted on a calendar year basis and the Trump administration does not take office until after the first of the year,” he said. “Potential 2026 tax credits are yet to be determined and will be administered by the Trump administration. If the project is a go, it will need to be completed in 2025, within Crested Butte’s building season, to take full advantage of the known tax credits.”
Feier made clear that there are major differences between the hydro project and the potential solar project. “The biggest differences between the Oh Be Joyful solar project vs. the Taylor River hydro project are 1) Taylor River hydro produces more energy and energy on peak, making it a more cost-effective project. And, 2) While Taylor River hydro was a site-specific opportunity, solar can be built in other locations (not in Gunnison County) at larger scale, more cost effectively.”
In fact, Tri-State is actively working to produce more electricity through renewable projects like an increase in solar at a larger scale than is possible in Gunnison County.
As far as building on to the success of the hydro project on the Taylor River, that is a possibility, but it won’t be easy. “The hydro facility could potentially be expanded in the future,” said Feier. “However, doing so would require significant electric infrastructure upgrades and significant engineering and design considerations in close coordination, oversight and with approvals from the US Bureau of Reclamation.”
The solar construction estimates are expected to be received by the end of January.
