SMPA to Consider Alternate Wholesale Power Supplier Proposals September 15

Nucla Service Center - San Miguel Power Association. Ore Cart photo.

The agenda for San Miguel Power Association’s Wednesday - August 25, 2020 Board of Directors meeting included two items related to research SMPA has conducted in 2020 into wholesale electric power supply alternatives. SMPA now has a long-term contract for wholesale power purchase and transmission delivery with Tri-State Generation and Transmission Association, headquartered at Westminster, Colorado.

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Below: screenshots of August 25, 2020 San Miguel Power Association Board of Directors monthly meeting agenda. Orange boxes and underline added by Ore Cart.

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Consultants with experience in electric utility power supply and transmission grid compliance presented a detailed report explaining new responsibilities facing SMPA if it exits from its current contract with Tri-State Generation and Transmission Association (Tri-State G&T).

Responding to a phone inquiry Friday morning - August 28, SMPA Board of Directors President Rube Felicelli explained that SMPA will consider five wholesale power supply proposals September 15, 2020 in an executive session. A proposal from Tri-State G&T is among those to be considered.

SMPA President Felicelli listed wholesale power cost and reliability of transmission delivery as important factors. If a decision is made to switch wholesale power suppliers, he stated that it will be made in the best interest of SMPA members.

Neighboring electric cooperative Delta-Montrose Electric Association completed an exit from its wholesale power supply contract with Tri-State G&T in July of this year.

SMPA’s website News section has provided no information year-to-date 2020 related to a possible wholesale power supplier switch. The 2/9/2018 item titled "SMPA Charts Pathway Toward More Local Renewable Energy, increased Reliability, and Affordability" describes SMPA’s intent to continue its contract with Tri-State G&T. The 1/16/2020 item is titled "Tri-State Announces 90% Reduction in Colorado Carbon by 2030," with subtitle “SMPA Remains Supportive of Tri-State Responsible Energy Plan . . ."

The SMPA Facebook site contains no recent entries related to wholesale power supply.

SMPA ENERGYWISE 2020 monthly newsletters contain one wholesale power supply item, February 2020, supporting Tri-State G&T Responsible Energy Plan.

All SMPA ENERGYWISE newsletters 2015 - 2020 may be viewed here.

The following excerpts of 2020 SMPA Board of Directors regular monthly meeting Minutes describes the wholesale power supply review process prior the August 25 meeting. Headings added by Ore Cart.

Tri-State G&T Contract Committee hires a consultant January 21, 2020 5. CEO REPORT - CEO Items - Power Supply Update Manager Zaporski provided a brief update on the contract committee meeting. He communicated that the last contract committee was primarily focused on a proposal for United Power. He stated that due to the size, location, and load characteristics of United Power, the proposal that they presented is not suitable for the rest of the member co-ops. Manager Zaporski communicated that Tri-State introduced the new consultant contracted to design the make-whole methodology; he noted that the consultant stated his goal was to design a formula that is simple and transparent.

Tri-State Contract Committee considers more capacity allowance for distribution cooperatives' self-generation February 25, 2020 5. CEO REPORT - CEO Items - Power Supply Update Manager Mertz reported that Tri-State held two contract committee meetings in February. The meetings focused on the Responsible Energy Plan and the Partial Requirements Contract (PRC). Manager Mertz highlighted that the design facets for the PRC included an “open season,” which would allow for 10% (300 MW) of Tri-State load to be available for self-generation projects. He also noted that they are proposing two basic types of PRC, one that would be load-following Member self-supply based and the other would intermittent renewable Member self-supply.

Executive session, followed by a vote about a Tri-State G&T issue in which SMPA's representative is recused March 26, 2019 6. ATTORNEY’S REPORT Director Rhoades made a motion at 2:10 PM to enter into executive session for personnel and contractual issues. Director Alexander seconded. The motion was voted on and carried. The board entered into executive session at 2:10 PM and came out at 4:22 PM. While in executive session no decisions were made, nor votes taken.

Director Rhoades made a motion to recuse Director Sibold from the upcoming vote discussed in executive session. Director Garvey seconded. The motion was voted and carried.

Director Garvey made a motion, based on discussion in executive session, to resolve to authorize the CEO to communicate to Tri-State SMPA’s desire that Tri-State be open to exploring third party options to reduce the carbon footprint and associated risks of its energy sources and simultaneously reduce rates. Director Rhoades seconded. The motion was voted and carried (Director Sibold was recused).

Tri-State G&T Partial Requirements Contract proposal update.

Contract Termination methodology filed with FERC.

SMPA Wholesale Power Supply Request for Proposals (RFP) approved. April 28, 2020 4. STRATEGIC UPDATE Understand the full value, and options, of our membership and contract with Tri-State G&T - Brad Zaporski. Manager Zaporski updated the Board on the results of the Tri-State Contract Committee. He discussed the two options that were established by the Contract Committee to allow members to pursue Partial Requirements Contracts(PRC). Manager Zaporski informed the Board that Tri-State had filed the Contract Termination methodology with the Federal Energy Regulatory Committee (FERC). Manager Zaporski stated that SMPA could file an intervention with FERC regarding Tri-State’s submitted documents, the filing could allow SMPA more flexibility when moving forward.

Following discussion, Director Alexander motioned for SMPA staff to file a dockless intervention with FERC regarding Tri-States filing, and up to a $25,000 budget override if necessary to pursue FERC filings. Director Rhoades seconded. The motion was voted and carried.

Manager Mertz gave a presentation regarding SMPA’s Request for Proposals (RFP) for Wholesale Power Supply. He highlighted that beginning the RFP process fulfills the strategic objective to “explore all power supply options.” Manager Mertz provided an overview of the requirements potential bidders must comply with in order to be considered, including the proposal must be a minimum 10-year proposal with fixed price schedule, bidder must identify the specific generation resources intended, or expected to be developed, that will provide for the firm delivery of energy to SMPA, and the bidder is required to provide all dispatch and scheduling services on behalf of SMPA required to coordinate generation and transmission with TSGT/WAPA, amongst other things.

Director Sibold requested to be recused from voting on releasing an RFP proposal, noting that he is SMPA’s Tri-State Director, and it is a conflict of interest. Director Rhoades motioned to recuse Director Sibold from the vote regarding an RFP for Wholesale Power Supply. Director Alexander seconded. The motion was voted and carried. Director Cooney motioned to approve staff to release an RFP for Wholesale Power Supply. Director Alexander seconded. The motion was voted, with six in favor and one recused, the motion carries.

SMPA issues alternative wholesale power supply Request For Proposals May 19, 2020 5. C.E.O. REPORT - A. C.E.O Items - i. Power Supply Update. Manager Zaporski informed the Board that SMPA had issued the Power Supply RFP on May 15th, 2020. He provided an overview of the timeline associated with the RFP, noting that staff is anticipating reviewing best and final proposals in early August and review with the Board at the following Board of Directors Meeting.

RFP applicants to present at a special SMPA Board meeting in September ­June 23, 2020 7. CEO REPORT - CEO Items - Power Supply Update. Manager Mertz provided an update on SMPA’s Power Supply RFP. He reported a modification to the timeline resulting in the best and final applicants presenting to the Board at a special meeting in September. At the regularly scheduled September Board of Directors meeting, staff anticipates the Board will provide guidance on what direction to pursue, whether it be an instruction to continue to gather information to perhaps moving forward with selecting a supplier and all that entails.

Executive session to discuss RFP process July 28, 2020 6. CEO REPORT - CEO Items - Power Supply Update. Manager Zaporski informed the Board that the Power Supply update will be a preemptive look at where we are at in the RFP process. This topic will be reviewed during Executive Session as the discussion will include items that protected under non-disclosure agreements.

Details of the electric energy generation mix in the wholesale power supply proposals submitted to SMPA have not been released. One of the applicants, Tri-State Generation and Transmission Association, is SMPA's existing wholesale power supplier.

Tri-State G&T describes its plan to reach 50% annual electric energy supply from renewable sources across its entire Colorado - New Mexcio - Wyoming - Nebraska service area at its website (links below). Utility-scale renewable wind and solar projects totaling 1 gigawatt of new capacity will be built by 2024, which is enough to power nearly 850,000 homes, according to Tri-State G&T.

Two new Tri-State G&T renewable electric energy projects are planned for southwest Colorado:

1. Dolores Canyon Solar in Dolores County - 110 megawatts
2. Coyote Gulch Solar in La Plata County - 120 megawatts 

Tri-State G&T purchases hydroelectric power in the SMPA service area from the Tri-County Water Hydropower Project, 8 megawatts, near Ridgway.

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Tri-State Generation and Transmission Association renewable energy planned additions

Responsible Energy Plan

Increasing Clean Energy

Upcoming Renewables Projects and map of existing and planned renewable electric energy generation projects

The author reports on electric energy research, development and trends at linecurrents.live