Integrating solar tough economically for La Plata Electric

Board member expects solar to draw away customers

LPEA Manager of Rates, Technology and Energy Policy Dan Harms talks about the economics of solar energy at a meeting on Tuesday. Many members of the crowd were interested in pursuing renewable energy. Enlarge photo

Mary Shinn/Durango Herald

LPEA Manager of Rates, Technology and Energy Policy Dan Harms talks about the economics of solar energy at a meeting on Tuesday. Many members of the crowd were interested in pursuing renewable energy.

While solar is a popular way for residents to go green, La Plata Electric Association loses money on each household that can rely 100 percent on solar panels.

A presentation Tuesday on the economics of integrating renewable into its power grid by Dan Harms, manager of rates, technology and energy policy for LPEA, showed how the requirements of Tri-State, its wholesale energy supplier, constrain the co-op.

If a resident isn’t paying for electricity because his or her home can rely on solar, the monthly net loss for LPEA is about $53. Annually, the loss totals about $810,000 out of LPEA’s $100 million budget, he said.

Even though solar customers pay a base rate, it doesn’t cover all the fixed costs associated with being ready to provide a home with electricity.

“We still have a lot of our fixed costs rolled up in that volumetric pricing,” he said.

For LPEA to generate all its own energy locally through solar would likely require $1.38 billion to construct 600 megawatts of solar power, he said. This investment would not address the energy storage that would need to be covered on cloudy days, he said.

The estimate was purely an exercise, though. LPEA is prevented from relying on large renewable generation projects because it is contracted to buy about 95 percent of its power from Tri-State through 2050.

LPEA pays Tri-State $67 million annually to cover the cost of power and infrastructure, he said.

It’s possible that Tri-State might make investments in renewable energy, but the presentation did not take that into account because in previous LPEA workshops, the crowd was interested in generating renewable energy locally, he said.

LPEA board member Guinn Unger encouraged the crowd and LPEA executives to consider how fast the price of solar has fallen and is projected to fall.

It is possible that LPEA and Tri-State could lose customers, especially large commercial customers, if they decide to build their own solar areas, Unger said.

“We are going to lose revenue, potentially a substantial amount, and yet our fixed costs will not go down,” he said.

Another member of the audience pointed out that the estimates do not take into account environmental cost of burning coal. Tri-State relies 75 percent on fossil fuels.

“The external cost of carbon is huge,” Kirby MacLaurin said.

A push to support renewable energy is ongoing locally.

A petition calling for the city to commit to transitioning to 100 percent locally produced and renewable electricity by 2050 has garnered hundreds of signatures.

mshinn@durangoherald.com

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