Taos, the resort community in New Mexico, is not hardscrabble in the way of so much of rural America. Billionaire Louis Bacon has been plowing money into the Taos Ski Valley, one of four ski areas in the area. Julia Roberts lives in Taos when not working somewhere. And it has 60 art galleries, a reflection of the playful light in high, desert landscape that has drawn artists and writers since Georgia O’Keeffe, Ansel Adams, and D.H. Lawrence.
Now, Taos is seeking to get creative with its energy systems. Last year Kit Carson Electric, the cooperative that serves 31,000 customers in Taos and three adjoining counties, ended its contract with its long-time wholesale supplier of electricity. That supplier, Tri-State Generation & Transmission, delivers electricity to 43 member co-ops across four states, including those that serve Durango, Telluride, Crested Butte, and Winter Park. About a quarter of that electricity comes from the big hydro dams of the West, but Tri-State remains strongly invested in coal-fired power plants. It long resisted the shift to renewables. Just too expensive for rural America, it has argued.
Kit Carson disagrees. It maintains that rural American can’t afford the steady price increases that have come from coal-fired power plants. Working with a new wholesale supplier, Guzman Energy, Kit Carson plans to install 6 to 7 megawatts of solar generation this summer around Taos, with a goal of generating up to 30 megawatts by 2022. That would be enough to meet peak day-time demand.
This is the path forward for rural America, say officials with Kit Carson. It’s like the standard Chamber of Commerce shop-at-home campaign, but instead of shirts and groceries, it’s electricity. They preach the value of job generation of local renewable energy, a way to shore up the fraying economies of rural areas. If Taos itself has polished shoes, surrounding areas look like much of rural America, distressed and worn.
A decade ago, this make-your-own-electricity argument might have seemed obscure, like home-brewing. Nice, if you have time. But prices of renewables have been tumbling so rapidly that they have become the low-cost choice for new generation. Wind prices have fallen most significantly, but solar is rapidly becoming affordable. From $12 per kilowatt-hour in the late 1990s, the price for solar-plus has dropped to just 4.5 cents per kilowatt-hour a deal announced by Tucson Electric this past week.
Taos and a few other renegade co-ops offer a striking example of disruption in a utility sector that was long sluggish if not resistant to change. Instead of behemoths of coal-fired power to supply broad areas, the new model being created is of localized generation, especially renewables, backed by natural gas and storage.
If the disruption is not yet complete, with much remaining to be proven, the looming question posed by Kit Carson to other utilities is this: can they afford to stick to the past.
Creation of electrical co-ops
Taos has a history of unruliness. It has a pueblo that has been continuously occupied since before Columbus. Even today, about 8 percent of Taoseños are Native American. More than half are Hispanic. The first Spanish arrived in 1540 when a contingent accompanying the explorer, Coronado, in search of seven cities of gold and gems called Quivira, traveled through the Taos Valley.
Spanish rule ensued, and the Pueblo Indians accepted it, more or less, but revolted in 1680. The mutiny lingered until 1696.
Again in 1847 significant blood was shed when the United States, after defeating Mexico, installed Charles Bent as the new territorial governor. He was scalped and killed by Pueblo warriors during another revolt. Josefa, the third and final wife of Kit Carson, the former mountain man and guide, escaped harm by hiding.
Writers and artists came in the 20th century, but they worked by gaslight or candlelight. Investor-owned utilities had been slow to extend lines to rural areas. In a New Deal program, Congress in 1936 created the model of self-governance for co-operatives and extended low-cost loans for rural electrification. Today, the nation’s 800 co-ops deliver 11 percent of the nation’s electricity but geographically serve more than 80 percent of the country.
Bigger is better. That was the mantra for power production for much of the 20th century. From the 1950s into the early 1980s, most of this new production was delivered by coal. Economic growth correlated with increased electrical production.
Amory Lovins, in a 1976 essay published in the journal “Foreign Affairs,” famously argued that it didn’t need to be that way. Pounding the drum even then for renewables, Lovins also made the case for what he called the energy soft path. Efficiency, he said, could increase productivity.
But a task force convened by Vice President Dick Cheney in 2001 came to the swift conclusion that robust growth in demand would require up to 400 new power plants. Especially coal plants.
Tri-State got that memo. In 2006, it announced it needed to build another power plant, this time in southwestern Kansas in conjunction with Sunlight Electric Power, a Kansas wholesaler. The plant along the Arkansas River was to be able to generate 900 megawatts. But Tri-State got pushback from two of its co-ops when it asked them to extend their contracts to 2050. Kit Carson and Colorado’s Delta-Montrose Electric refused.
That power plant has never been built. The administration of Kansas Gov. Kathleen Sebelius, in 2007 denied a permit. Finally, in mid-March 2017, the Kansas Supreme Court ruled that the project could go forward.
But with demand growth slowed and prices of renewables tumbling, the coal plant appears unlikely to be built. As of several years ago, Tri-State had sunk at least $70 million into the project, including water and land.