The Taos, N.M.-based Kit Carson Electric Cooperative (KCEC) is blazing new trails (just like its namesake) by committing to produce 100% of its electricity during its summer-peak season by 2023 from solar.
What’s remarkable isn’t necessarily this specific commitment (although the fact that it’s voluntary is noteworthy). What’s extraordinary is the fact that KCEC could make this commitment at all.
Until June, KCEC was under contract with electricity wholesaler Tri-State Generation and Transmission (TSGTA) until 2040. Under the terms of the agreement, it could not produce more than 5% of its electricity from locally sourced renewable power.
But when electricity wholesaler Guzman Renewable Energy Partners paid the $37 million exit fee to buy KCEC out of its Tri-State contract, the co-operative’s solar plan suddenly had new life — which led to Monday’s announcement. The co-op is repaying Guzman through an electricity surcharge.
With only 5 MW of solar currently under contract in its service area, Kit Carson said it expects to place at least 30, 1-MW community solar projects throughout the territory to achieve what it needs to reach the 36.5 MW it produced in 2015 during its summer-peak season.
Long-term contracts that limit how much renewable energy electric co-operatives can buy have not uncommon. As a result, many co-operatives have been unable to expand their solar commitments as quickly as they’d wished.
But in June, shortly before Guzman purchased Kit Carson’s freedom, the Federal Energy Regulatory Commission (FERC) issued a ruling in the case filed by TSGTA against Colorado co-operative Delta-Montrose Electric Association. In its filing, TSGTA wanted to impose surcharges on Delta-Montrose to recover revenues it said it lost when Delta-Montrose purchased renewable power from sources.
FERC denied TSGTA’s claim (Docket No. EL16-39-000) and wrote that it “would effectively undo Delta-Montrose’s statutory obligation to purchase from qualifying facilities (QFs)and correspondingly limit QFs from selling power to Delta-Montrose at negotiated rates.” Such purchases are required by the federal Public Utility Regulatory Policies Act (PURPA).
With that decision, co-operatives were no longer obligated to adhere to the solar limitations of these wholesaler contracts — and the Guzman-Kit Carson deal was born.