United Power, one of the state’s leading power users despite its small geography, announced earlier this month that it is in search of a new wholesale supplier.
United Power is a rural cooperative power utility which serves the eastern edge of Longmont, parts of Broomfield, Brighton, Keensburg and more.
Mark Gabriel, chief executive officer, has only been with the company for the past 14 months. He said he is excited to explore new wholesalers to cut costs for the company.
United Power, a rural utility company, currently buys its electricity from Tri-State Generation and Transmission Association, Inc. United Power uses over 600 megawatts of power a day making it Tri-State’s largest user.
United Power currently serves over 100,000 members but adds more every day. Last year alone, it added over 5,000 new meters to its system, Gabriel said.
As a rural cooperative utility, United Power joined with other rural communities to form generation and transmission companies decades ago because the smaller coops were unable to build their own power plants, according to Gabriel.
“That worked pretty well up until the last seven to ten years ago,” Gabriel explained. “What’s happened in the electric utility business, not just coops, now the whole world, is solar rooftops, self-storage, electric vehicles; alternative sources of energy and a demand for those alternative sources from our members.”
The contract with Tri-State only allows United Power the ability to source 5% of its power from other sources which include solar power on homes, utilizing the four-megawatt battery at the Carbon Valley Service Center and more.
“There’s been a lot of tension that has grown across the country, not just here, for everybody to look at their power supplier a little bit differently,” Gabriel said. “The transition to lower-carbon, more local generation is really what is driving our desire to leave our power supplier.”
According to Gabriel, Tri-State has been slow to adapt to the changing demands in electric sources, adding 47% of Tri-state’s power is generated from coal.
According to the Tri-State Responsibility Energy Plan, the company plans to increase its clean energy sources by 50% by 2024 and eliminate coal emissions by 2030.
In addition to wanting to diversify its sources of energy, United Power also wants to reduce the cost for its members.
Currently, United Power members pay 20-25% more than area market rates for its power. Approximately 75% of member rates are due to wholesale power costs, according to Gabriel.
“Tri-State G&T has some of the highest-priced power in the state, a lot of it due to holding onto coal for too long,” Gabriel explained.
After several months of negotiations, the two companies were unable to come to an agreement that met both their needs and United Power decided to begin look for a new wholesaler.
“This was not a decision that was reached without exhaustive research and deliberation,” said Ursula J. Morgan, board chairperson. “We considered the impact on rates and reliability, as well as the flexibility of our power supply. The Board believes this is the right direction for our cooperative.”
Due to federal regulations, United Power has to give two years of notice before it can officially change wholesalers which puts the switch off until 2024. In the meantime, the utility is opening up bids in the coming months.
“Our goal is to provide both lower cost power and more options for our members,” Gabriel said. “We are confident we can craft a new future for our members, and we are excited to bring these opportunities to you.”
