Northern New Mexico Electric Cooperative to Achieve 100% Daytime Solar Power by Summer

Starting this summer, the more than 29,000 members of the Kit Carson Electric Cooperative in Taos will receive all of their daytime electricity from the sun, helping to lower customer rates by up to 25%.

The co-op announced the achievements in early April, capping a six-year effort that began in 2016, when Kit Carson parted ways with its former wholesale power supplier, Tri-State Generation and Transmission, to sign instead. a 10-year agreement with third-party electricity supplier Guzman Energy LLC. Guzman, a Colorado-based company that helps electric co-ops and municipal utilities lower their rates through renewable power generation, paid Kit Carson’s $37 million “exit fee” so that the cooperative breaks its long-term wholesale contract with Tri-State.

Starting next June, the co-op will make its final monthly payment on that debt to Guzman, allowing member rates to drop immediately in July, Kit Carson CEO Luis Reyes said.

At the same time, two new large solar projects will come online, allowing the cooperative to derive 100% of its daytime production from 20 different solar installations it has been installing since leaving Tri-State.

Between eliminating the exit fee debt to Guzman—which all co-op members helped repay through a monthly fee on their bills—and achieving 100% solar power, electricity costs The co-op’s wholesale will decline by 40%, Reyes mentioned. And these savings will be immediately passed on to the members of the cooperative.

“Our wholesale rates will drop from 5.5 cents per kilowatt hour to just 3.94 cents,” Reyes told the Journal. “It’s exciting because we’re showing that with renewables, we can actually bring prices down. … We will have some of the lowest rates of any co-op in the state, if not the region.

By the end of the summer, Kit Carson’s average customer bills will be down by up to 25%, Reyes said.

Prior to 2016, the co-op’s electricity rates were tied directly to Tri-State wholesale rates, which Reyes says were about 30% higher than other energy prices available in the market through a series of rate hikes from Tri-State. Tri-State’s high rates generally reflected its reliance on expensive coal generation for nearly 50% of its electricity, as well as slow efforts to replace that fossil fuel with cheaper renewable alternatives.

In addition, long-term contracts under Tri-State — which supplies wholesale power to 43 utility co-ops in four states, including 11 in New Mexico — have limited the amount of renewable power generation. that member cooperatives could pursue on their own, independent of the wholesale association. .

Since then, Tri-State has taken aggressive steps to replace its coal generation with renewable energy to meet new climate mandates in some of the states where it operates and to stabilize its electricity rates. It has also increased the amount of renewable energy its member co-ops can build on their own.

Still, Kit Carson estimates that by 2026 — when its 10-year wholesale electricity deal with Guzman ends — the co-op will have saved between $50 million and $70 million compared to the costs it would have accrued if it were remained with Tri-State.

This reflects cheaper wholesale rates under Guzman – which supplies electricity to Kit Carson to supplement the co-op’s solar power generation – as well as falling costs for new solar power plants that have been continuously coming online since 2016.

The co-op currently has 18 different solar installations on its grid, 15 of which have been built since 2016. These plants – which are spread throughout Kit Carson’s service territory – can collectively produce approximately 18.6 megawatts of electricity, providing approximately 65% of the co- total daytime electrical needs of the op.

Now, with two new large solar installations set to come online at Taos and Angel Fire over the summer, the co-op’s solar generation will more than double to 41 MW, meeting 100% of electricity consumption. Kit Carson’s daytime energy.

The new facilities will also include 16.25MW of battery storage that can provide up to two hours of additional generation in the evening, or when Kit Carson’s solar facilities are not producing at full capacity.

Kit Carson’s low renewable energy tariffs not only help co-op members, but also contribute to the economic development of Taos, Reyes said.

“Local businesses use it as a marketing tool,” he said. “They boast that they get all their energy from renewables, which is getting the buzz from environmentally conscious consumers.”

Kit Carson’s accomplishments inspire other electric co-ops and municipalities to pursue similar energy development strategies in their own communities. The town of Socorro, for example, is in the process of replacing the Socorro Electric Cooperative with a municipal utility that will pursue solar energy development to reduce electricity rates.

The cooperative, which was launched in 1944 and buys all of its electricity from Tri-State, has yet to pursue solar or renewable development independent of the wholesale association. And its rates remain exorbitant, said Socorro Mayor Ravi Bhasker.

The city recently offered to buy the co-op, which was well received by the co-op’s management. But now the city is preparing a firm proposal to acquire the co-op’s urban infrastructure for about $24 million, which it expects to submit to the co-op at the end of April.

“It’s no secret – we’ve already made overtures to buy the co-op – but the co-op management told us to go and pound the sand because it’s not for sale,” Bhasker told the Journal. . “Well, we’ve made our assessment and now we’re going to make a direct offer.”

If the co-op refuses to negotiate, the city is prepared to evict the co-op from its property when the co-op’s urban right-of-way franchise agreement expires in 2024, the mayor said.

The city has consulted with Guzman Energy, which says it can supply Socorro with wholesale electricity at 4.5 cents per kilowatt hour, compared to the 8.5 cents the co-op now pays Tri-State.

This would significantly reduce rates for residents and businesses in the city, as well as surrounding communities, as the city utility works to expand its electrical service throughout the county.

“We have told the county people that once the city acquires the co-op, we will continue negotiations to acquire the rest of its business in the surrounding areas,” Bhasker said.

Socorro has followed Kit Carson’s accomplishments closely, encouraging the city to pursue an independent energy path as well, the mayor said.

“We are thrilled to follow Kit Carson’s lead,” Bhasker said. “They have shown that it can be done, that we can reduce utility rates in the state and contribute to local economic development. It gave us confidence that we can do it too.

Julio V. Miller