Dive Brief:

• With the cost of renewable energy steadily falling, a new study illustrates the opportunity this creates for electric cooperatives in western states, where coal generation is a significant part of utility portfolios.
• Rocky Mountain Institute (RMI) looked at Tri-State Generation and Transmission Association to develop a case study, concluding the utility's 1 million consumers could save more than $600 million through 2030 by retiring some of its fossil-fuel plants and moving towards renewables.
• Tri-State Gen responded, inviting RMI to get involved with the utility's public planning process while also saying the group's analysis "cannot accurately forecast the association's future costs." 

Dive Insight:

The RMI study makes a good case for renewable energy, but the power cooperative is understandably miffed at being used as an example.

"The RMI report does not equate to the thorough resource modeling in our integrated resource planning," Tri-State senior manager of communications Lee Boughey said in a statement. "We encourage RMI to suggest scenarios and engage in our inclusive public process next year."

According to RMI's case study, the estimated $600 million could be realized through avoiding the operating expenses and fixed costs of its fossil-fueled power plants, which are contributing to rate increases for electricity customers in Colorado, Nebraska, New Mexico and Wyoming.

In those states, says RMI, rates rose by more than five times the national average between 2007 and 2016.

"The rapid cost declines in renewable energy projects present utilities in the West with an unprecedented opportunity," RMI principal and study coauthor Mark Dyson said in a statement.

Dyson said the falling costs of renewables with the fossil-fuel assets "allow operators to deliver lower energy bills to their customers without sacrificing reliability, all while cutting emissions, reducing risk and supporting economic development in local communities. They deserve a hard look."

The research found secondary advantages as well.

"Scaled adoption of renewable energy by Tri-State could also mitigate risks of revenue loss and cost increases associated with reliance on existing assets for electricity supply, reducing the rate increases under a range of risk scenarios by 30% to 60%," the report found.

This is not the first research to suggest renewable energy is a better financial choice than older coal units. A recent Sierra Club study found energy from 11 PacifiCorp coal plants costs more than it would for the utility to buy power in energy markets.

Tri-State Gen says the case study did not utilize detailed inputs, complex models and technical expertise "necessary to forecast the association's future costs." The cooperative said its resource planning process factors in the needs of 43 member distribution systems, and looks at transmission constraints, reliability factors, and resource and fuel costs.

"Utility resource modeling is complex in scope, and no regulatory body, including our association's board of directors, would substitute the RMI analysis for proper resource planning," said Boughey.

RMI's Dyson told Utility Dive they gave the cooperative a draft of the study "and reached out several times between April and August to discuss our work."

Tri-State notes it has added 475 MW of renewable resources since 2008, and the association's members have another 140 MW of local renewable projects in place or under development. At the end of last year, 30% of energy consumed within the association came from renewable resources, according to the cooperative's statement.

Tri-State forecasts that renewable energy will grow to one-third of energy consumed within its membership by the end of 2018, and the association is soliciting for additional renewable energy supply.

Tri-State's generation was about half coal, in 2017, according to RMI.