Tri-State adding renewables, new coal still an option

Tri-State Generation and Transmission Association made two major changes to its generation portfolio since 2010; it completed its acquisition of Thermo Cogeneration Partnership, the owner of the 272-MW Fort Lupton gas plant, and it entered into a power purchase agreement for 67.2 MW from the Colorado Highlands Wind project.

Tri-State on Oct. 31 filed an updated Electric Resource Plan with the Colorado Utilities Commission, with the last ERP having been filed in November 2010. The commission approved that ERP in July 2011.

Tri-State made two significant changes to its generation resource portfolio since then. “First, Tri-State completed its acquisition of Thermo Cogeneration Partnership (TCP) which was the owner of the 272 MW Fort Lupton Combined Cycle Power Plant,” the ERP said. “This acquisition will provide additional combined cycle capacity in 2019 at the conclusion of the existing power purchase agreements associated with that facility. Next, Tri-State entered into a power purchase agreement for 67.2 MW of generation from the Colorado Highlands Wind project. This project is scheduled to come online in 2012 and will provide for Tri-State’s energy needs in support of its Member-Systems’ Renewable Energy Standard requirements. In addition to these generation changes, Tri-State has updated forecasts of electric demand, energy and fuel prices as well as capital costs for potential generation resources.”

Notable changes to the sources of energy since the 2010 ERP include a significant increase in the amount of energy received from renewable resources with the addition of the Kit Carson wind project and the Cimarron solar project as well as renewable generation projects of member power cooperatives. Further, the amount of energy from hydropower increased from 12% in 2010 to almost 17% in 2011 due to greater than average water run-off.

In addition, due to lower natural gas prices, there was an increase in the amount of market purchases, from 6% in 2010 to 7.9% in 2011. As a result, the amount of energy from coal was reduced from 70% in 2010 to 64% in 2011.

As for Fort Lupton and Colorado Highlands Wind:

  • In 2011, Tri-State acquired 100% of the equity of TCP, which included the gas-fired, combined cycle power plant at Fort Lupton. This transaction has not altered, to this point, the power purchase agreement with TCP. However, Tri-State will now list the facility as an existing unit with a start date of July 1, 2019, and a capacity of 312 MW reflecting the current rating of 272 MW plus an approximate 40 MW capacity increase through potential turbine upgrades. As TCP will be a wholly-owned subsidiary, Tri-State will now list the Public Service Co. of Colorado power purchase from the Ft. Lupton facility under its contingent sales. PSCo, a unit of Xcel Energy (NYSE: XEL), purchases 122 MW from the facility through June 30, 2019. The name of this facility has been changed to the J. M. Shafer Station.
  • The Colorado Highlands Wind project is under construction and scheduled to be online in late 2012. The 67.2 MW wind farm is owned and operated by Colorado Highlands Wind. Tri-State is purchasing all of the output through a 20-year power purchase agreement.

No new capacity resources needed in the short term, probably

No new capacity resources are required to serve firm load and obligations through 2026 for the median load forecast case, the ERP noted. “It is important to note that other factors may drive the need for additional generation,” it added.

  • First, renewable standards in the states where Tri-State’s members are located can cause the need for additional generation.
  • Second, any limitations on fleet-wide carbon emissions may require new generation to facilitate fuel switching from coal to gas and/or adding renewable generation.
  • Third, under some high carbon cost and high fuel cost scenarios, new generation is required to minimize the cost of power and energy deliveries to customers, and this generation expansion is driven by economics and environmental policy, not by a load/resource comparison.
  • Finally, for some scenarios where high levels of intermittent renewables are developed, additional generation may be required to provide regulation and maintain system stability. This requirement is typically met by reciprocating engines or by gas turbines, potentially configured as a combined-cycle gas facility with favorable dispatch characteristics.

One factor that could influence Tri-State’s resource needs is large load growth beyond what is considered in the load forecast. New oil and natural gas production in Tri-State’s service territory could have a large but unknown effect on its demand and energy forecast. Any addition of new large industrial loads could also cause Tri-State to add unexpected resources, the ERP said.

Tri-State’s capacity position generally declines in the 2013 through 2015 timeframe due to PSCo natural gas turbine tolling agreements, but remains adequate under the median economic load forecast scenario. The capacity position again improves in 2016 and 2017 with the expiration of the PSCo turbine tolling agreements and the expiration of a PSCo long-term contingent sale.

Tri-State’s members in Colorado and New Mexico are required to comply with state Renewable Energy Standards (RES). The Colorado standard requires that 1% of retail energy sales be served by renewable generation in 2010, growing to a 10% level in 2020 and beyond. The New Mexico standard begins in 2015 with 5% of retail energy sales served by renewable sources, and grows to 10% by 2020.

Tri-State said it has procured sufficient renewable generation through the Cimarron solar project, the Kit Carson wind power project, member system local renewable projects and the Colorado Highlands Wind project to comply with both the Colorado and New Mexico RPS/RES requirements through 2019. By 2020, Tri-State will need to acquire additional renewable energy either through self-build generation, power purchase agreements, or the purchase of renewable energy credits. As demonstrated by the Colorado Highlands Wind project, however, Tri-State said it may acquire additional renewable generation ahead of the RES requirements based on economics.

If Tri-State were to satisfy the additional renewable needs for 2020 with only wind generation, this would require about 200 MW of additional wind. If Tri-State were to use photovoltaic solar to supply the extra renewable energy, it would require about 120 MW of photovoltaic solar or a facility about four times the size of the Cimarron facility, assuming current multipliers remain in effect. Under the assumptions of growth defined by the median load forecast and no changes to existing units or contract terms, Tri-State projects a need for additional renewable resources to meet the Colorado and New Mexico RES, and additional capacity to meet planning reserve margins by 2026.

“Tri-State has positioned itself to have viable options to meet future needs that may include demand side alternatives, natural gas generation, renewable generation or baseload generation, including coal technology,” the ERP said. “No firm commitments have been made at this time as to the timing, technology, size or location of new generation projects.”

In the 2010 ERP, Tri-State stated that a balanced approach to resource planning meant maintaining flexible and viable options, including the option to build a new unit at the coal-fired Holcomb Station in Kansas of Sunflower Electric Power. That coal project has gone through numerous delays largely due to environmental opposition. Since the 2010 ERP, development at that site has largely been unchanged and the option is still viable, the Oct. 31 ERP said.

Tri-State members develop a number of small renewables projects

In outlining the ongoing renewable projects, the ERP said:

  • As of late-August 2012, a total of 11 Tri-State members have energized or are developing 29 local renewable projects. The combined total capacity of these 29 projects is expected to reach 44 MW by the end of 2013.
  • Several solar projects began construction and achieved commercial operation in 2012. The 1.5 MW Amalia Solar project came online in June for Kit Carson Electric (Taos, N.M.), and Poudre Valley REA energized a 100 kW solar installation at its headquarters in August. San Miguel Power Association (Ridgway, Colo.) expects to energize a similar community solar facility (1 MW) in the Paradox Valley in the fourth quarter. Empire Electric (Cortez, Colo.) energized a 72 kW facility known as the Red Wagon – Mancos 1 project. Two larger scale solar projects are also expected to achieve commercial operation by the end of 2012 – a 1.7 MW solar array known as the Hanger 160 project in United Power’s (Brighton, Colo.) service territory, and a 1.25 MW solar project known as Blue Sky Energy in Kit Carson’s service territory.
  • Two of the largest member distributed generation projects currently in operation are the Williams Four Corners generating facility located in La Plata Electric’s (Durango, Colo.) service area, producing 5.8 MW from an industrial waste heat recovery system, and Highline Electric’s (Holyoke, Colo.) Trailblazer unit, which provides up to 4 MW utilizing a similar waste heat recovery system.
  • In 2013, Delta-Montrose Electric Association (Montrose, Colo.) expects to commercialize the South Canal Hydro Project, which is expected to produce more than 6 MW of capacity by the second quarter of 2013. In 2012, the 2.6 MW Carter Lake hydroelectric project achieved commercial operation as a generation project for Poudre Valley REA. Also, San Miguel Power Association added the 500 kW Bridal Veil hydro project for treatment under Tri-State Policy 115.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.