Guzman Energy, a private power provider, wants to invest hundreds of millions of dollars to build renewable energy generation that would serve residents in Southwest Colorado and beyond.
However, Tri-State Generation and Transmission, the wholesale energy supplier for La Plata Electric Association, is not interested in a deal with Guzman at this time because the company did not provide a detailed proposal and seemed to request exclusive negotiations, Tri-State CEO Duane Highley said in a statement. Tri-State is a co-op owned by LPEA and 42 other electric co-ops.
Guzman Energy has initial commitments from private investors, up to half a billion dollars, to transition Tri-State to more than 70% renewable energy, said Kathleen Staks, director of external affairs for the company.
Guzman is an energy-services provider that finances, builds and operates energy generation facilities across North America.
“We have all the confidence in the world that the investment would be there,” she said.
Tri-State provides residents with 30% renewable energy. It is also heavily invested in coal power plants in Colorado and other Western states.
The Colorado Legislature passed a bill this year aimed at cutting statewide pollution levels 26% by 2025, 50% by 2030 and 90% by 2050. The new measure is expected to force Tri-State to make big changes.
If Tri-State contracted with Guzman Energy, the private company’s cash could allow Tri-State to make a transition to renewable energy faster than it could on its own, Staks said.
Guzman would provide investment and Tri-State would agree to buy the renewable energy power from newly built solar arrays, wind turbines or other new infrastructure for a set amount of time, she said.
The deal could lower rates for members because renewables are so much cheaper than coal-powered plants, she said.
As part of the deal, Guzman Energy offered to buy and close Tri-State coal-powered plants in Colorado and New Mexico and the Colowyo Mine in Meeker, she said.
Guzman would also be willing to invest millions in Craig and Grants, New Mexico, communities that would be economically hurt by coal plant closures. Guzman could help those communities with high-speed internet or other economic-development investments residents want to make, Staks said.
“We don’t presume to know what’s right for these communities,” she said.
Highley critiqued Guzman’s proposal for lacking “meaningful detail or terms,” he said in a written statement.
“Tri-State requested a written proposal, but Guzman refused to provide one, instead deciding to go to the press,” he said.
Staks said the company expected talks and details to be worked out over the course of a year.
Guzman Energy representatives also seemed to suggest Tri-State start exclusive negotiations with the company. But Tri-State needs to explore other options before entering into exclusive talks, Highley said.
Colorado and New Mexico state legislatures have both set new targets for cutting carbon this year, but the rules for meeting those goals have not been set and the co-op needs to evaluate its plans for the future, Highley said.
“We may well want to discuss these issues with Guzman Energy and others, but at this point, it is not in our best interests to be locked in to a single option,” he said.
Staks said working with Guzman would help Tri-State prepare to meet new carbon goals and allow it to present Colorado officials with options for how it could abide by new state regulations, she said.
“Tri-State is going to have to move a lot faster than they were going to have to,” she said.
mshinn@durangoherald.com
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