Best: Questions about Colorado’s second-largest utility


Grocery stores have been consolidating. With utilities, the opposite is happening. We’re seeing some of them start to come apart. Specifically in question is whether Colorado’s second-largest electrical provider, Tri-State Generation and Transmission, will survive this great pivot in how we produce and consume electricity.

Xcel Energy, Colorado’s largest utility, seems secure in its business model even as the world of electricity turns upside down. It might have the last coal plant standing. Comanche 3 — sometimes called Pueblo 3 — is scheduled to retire no later than the end of 2030. But the utility has been fleeing coal since at least 2017 when the plunging prices of wind and solar became obvious. It reliably gives shareholders returns of around 9%.

Tri-State has no private investors. It was created by electrical cooperatives in 1952 to transmit electricity. Over time it added coal plants and other generating sources to its portfolio. It delivers power to 42 electrical cooperatives in four states, including 17 in Colorado.



In 2018, Xcel delivered 52% of electricity in Colorado and Tri-State 18% followed by Colorado Springs Utilities and then other smaller utilities.

A decade ago, Tri-State was stodgy and calcified. At the time, it was still going through the motions of trying to build a humongous coal plant in Kansas. Luckily for its members, Tri-State failed. By 2019, Tri-State had set out to embrace changes. That includes closing its last coal-fired station in Colorado by 2030.

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The changed outlook in rural Colorado served by the cooperatives was evident at the annual conference of the Colorado Rural Electric Association in late October. The very name of the conference, “innovations summit,” reflected recognition of change.

Absent were undercurrents of just a few years ago, when panel moderators made jokes about climate change with rolls of their eyes. This year, one farmer, who said his tractor was already worth more than his house, pushed back against the idea of electrification of agricultural implements. That was not the general tenor, though. Rural co-ops mostly accept that we will have to figure out electricity — and energy more broadly — without putting emissions into the atmosphere. They also recognize that electricity will play a broader role in transportation and buildings.

Some co-ops have been moving more briskly than others. Holy Cross Energy, the cooperative serving 50,000 members in the Vail, Aspen, and Rifle areas, has an audacious goal of delivering 100% emission-free energy by 2030. Bryan Hannegan, the chief executive, explained his cooperative’s plans for microgrids. Holy Cross is one of five cooperatives in Colorado independent of Tri-State.



As for Tri-State, 15 years ago it had a chief executive who poo-pooed the idea of climate change on national television. Now, it has a chief executive who openly discusses the way forward toward even deeper emissions cuts.

If cost-effective technology for emissions-free electricity exists for 80% to 90%, the answers about 100% goals remain unclear. Some technology or set of technologies must be scaled up to balance the intermittency of renewables. Deeper thinkers about the energy transition, including Aspen native Hal Harvey, co-author of “The Big Fix,” say nuclear may deliver the answer. It’s not cost-effective now, but at one time, neither was solar. Geothermal is another candidate. Both were agenda items at the conference.

Hydrogen was, too. Duane Highley, the chief executive of Tri-State since 2018, said he sees hydrogen possibly being employed at Craig when the coal plants close. It could employ existing infrastructure, including transmission lines, and use many of the same skill sets as existing workers at Craig. But again, the technology isn’t quite there yet.

Who will Tri-State’s customers be a decade from now? Tri-State has lost two customers to Denver-based Guzman Energy in recent years, and neither co-op seems to be looking back. Now, two more Tri-State co-ops, La Plata Electric and San Miguel Power, both plan to get substantial amounts of electricity from new sources.

Other co-ops may leave altogether. United Power, which serves outlying areas north of Denver, represents more than 20% of Tri-State’s total demand. The co-op insists it will be gone from Tri-State by May 2024 once officials at a federal agency rule on how much it must pay Tri-State to leave the remaining members whole.

Tri-State has enormous value in its transmission lines. Its coal plants, though, appear to represent a liability. It has about $4 billion in debt.

Will Tri-State by 2030 look somewhat the same, only sleeker…



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