Guzman Energy plans 80 MW of solar to serve a Colorado electric co-op

The Denver-based company helped Delta-Montrose exit a power supply deal that favored coal, and pledged to develop solar as a replacement energy source.

May 10, 2021 David Wagman

Downtown Delta, Colorado

Image: flickr/J. Stephen Conn

Guzman Energy said it plans to develop an 80 MW solar energy project in west central Colorado to produce more than 194,000 MWh of electricity a year for Delta-Montrose Electric Association. The association will buy part of the energy produced by the plant and Guzman Energy will offtake the rest.

This is the first local renewable energy project developed in partnership with Guzman Energy since the association ended its power supply agreement with Tri-State Generation and Transmission Association in July 2020.

The Garnet Mesa solar project represents a commitment that Guzman made to Delta-Montrose to build solar capacity. The project would help the association reach roughly 20% local power generation.

The project is in the study phase for interconnection and local permitting processes have begun. Once permits are issued, construction is expected to last 11 months, with a commercial operation date targeted for early 2023.

New Mexico’s Kit Carson Electric Cooperative provided an early model for solar-for-coal swaps in 2016 with its $37-million buyout of a contract with Tri-State. In that instance, Guzman Energy helped with the initial financing and later partnered with Kit Carson to build a solar portfolio.

Guzman also backed similar swaps for Holy Cross Energy and Delta-Montrose. For Colorado-based Holy Cross, the swap involved Guzman buying out the co-op’s 8% interest in Public Service Company of Colorado’s Comanche 3 coal plant. Replacement power came from a 100 MW wind project.

Delta-Montrose completed its buyout from Tri-State last July. Guzman financed the $62.5-million exit fee and provided the co-op with an initial power mix of 40% clean energy, while also beginning development on a solar project.

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