SDSG examines policies of electric utility, provider
Photo by: 
Kate Gienapp
Seen here is a substation for the City of Gunnison.
Seen here is a substation for the City of Gunnison.

With fossil fuels at the forefront of debate, communities are increasingly looking to more localized generation of renewable power, and residents of the City of Gunnison are no exception. A report released Monday examines the policies of the city’s electric power provider — the Municipal Energy Agency of Nebraska (MEAN) — to determine if they are inhibitive toward renewables.

“I am concerned to see that Gunnison is not proactive in pursuing renewable energy,” said Luke Danielson of Gunnison-based Sustainable Development Strategies Group (SDSG). “Of the 13 communities Gunnison is one of the least proactive.”

Nonprofit SDSG conducts research, education and implementation in support of improved management of natural resources. The group’s study is intended to help citizens, businesses and public officials understand the opportunities for development of more renewable electricity in 13 small Colorado communities.

MEAN provides power to 69 participating municipalities in Colorado, Iowa, Nebraska and Wyoming. The report finds that MEAN’s cap on local renewable energy generation, contractual restrictions and the city’s “net-metering” policy restrictive in the promotion of renewable energy.

Similar to Gunnison County Electric Association (GCEA) — which provides electricity to other parts of Gunnison County, including the towns of Crested Butte and Mt. Crested Butte — MEAN also has a cap on the amount of renewable energy that can be generated locally. For MEAN, it’s 2 percent, compared to GCEA’s 5 percent cap.

While those thresholds are not hard and fast, electricity produced in excess of the caps could result in lower rates paid to producers — reducing incentive for renewables. In the case of GCEA, for example, the co-op’s overall excess production would be purchased at a lower price.

“Gunnison is one of the few towns that doesn't seem to have a live renewable energy project,” Danielson noted, citing towns such as Fleming and Fort Morgan which have small-scale solar arrays of their own.

 

Solar potential eyed

In an effort to develop more diversified energy production in the valley, Western Colorado University students Ellen Ross and Hunter Edberg have been working within the Master in Environmental Management program to explore alternative energy.

“Solar is just one aspect of our local resilience and our local energy source,” said Ross. “But how do we create more localized jobs and resources in our community?”

Edberg, who helped produce the report alongside Danielson, agrees the policies in the city — and those of MEAN — could be improved upon. For instance, the city’s net-metering policy currently allows property owners with a solar array on their homes or businesses to receive a wholesale rate for power they produce in excess of what they use.

By way of comparison, that’s less than half the residential rate paid by city electric customers — resulting in little incentive for installation of solar. GCEA, on the other hand, pays customers who generate excess electricity the co-op’s residential rate.

“Something that I’ve been working on is trying to change the City of Gunnison’s net-metering policy,” said Edberg. “It’s definitely more favorable for GCEA members.”

According to Public Works Director David Gardner, the city is not legally obligated to offer net metering for residents based on the population — but yet the city does. The minimum requirement for net metering is 5,000 customers. Gunnison has 4,200.

Gardner indicated net-metering law states a utility must allow residential and commercial customers to install a 10-killowatt (KW) solar system for residential and 25 KW for commercial.

“The city is actually better than the net-metering law because our policy allows 25 KW for both residential and commercial,” explained Gardner via e-mail. “Net metering is definitely a benefit to the customer and not the utility, but we still offer it and we want to even though we don’t have to.”

However, perhaps the biggest single obstacle to developing more distributed renewable energy in the MEAN system is an “avoided cost” rate, according to the report. MEAN policy stipulates that systems in excess of 25KW only receive about 2.5 cents per kilowatt hour — compared to a wholesale rate of about 4 cents for systems smaller than 25KW. The report argues this further disincentivizes solar installation.

SDSG’s report also cites fixed fees associated with MEAN’s debt on coal-fired generation facilities and administrative charges as resulting in higher rates for customers.

 

Cost of coal in question

According to the report, 12 customers within the city currently generate electricity through rooftop solar. Additional solar generation projects have been proposed, but according to project managers and potential stakeholders, these projects have been delayed due to developer concerns about the current MEAN avoided cost rate and other issues.

Danielson suggested that solar could serve as a potential solution to the rising costs of power from outdated coal plants.

“We could have rules that encourage rather than discourage local people to develop their own renewable energy on their houses and their businesses,” said Danielson. “In Gunnison in particular, at the local level it’s really problematic under the current set of rules.”

While MEAN as an organization does not have an official renewable energy goal — for instance, some utilities have pledged to go 100 percent renewable by 2050 — Danielson doesn't think it’s too soon for Gunnison to get into gear.

Even aside from concerns of climate change, the environmental impacts associated with keeping coal plants in operation can be costly. Danielson pointed to current coal plants being forced to install additional pollution control equipment.

“Gunnison, in some form, will be paying for part of that,” said Danielson.

Ross also explained that the addition of solar could be financially beneficial if changes to local policy are pursued. It’s no secret that energy bills run high in this valley with harsh winters. Inefficient older homes only exacerbate the problem, she said.

According to Ross, the goal is to have four percent of annual income dedicated to energy needs.

“It’s a big problem here, especially in this valley, and in the south valley, that number is about 12 percent,” she said.

 

READ THE REPORT
To read Volume I of the MEAN report, visit www.sdsg.org/mean-study.

 

(Kate Gienapp can be reached at 970.641.1414 or kate@gunnisontimes.com.)