SPECIE MESA, Colo. – John Irwin squints into the autumn wind at a parade of wooden power poles running across his property: 1,700 acres of open meadows and groves of aspen trees. Behind the poles, which are almost the only sign of man here at 9,400 feet, the bulk of Little Cone Peak rises up, and beyond that, the massif of 14,017-foot Wilson Peak, heart of the Lizard Head Wilderness area.
“If I were a prospective buyer and I looked at this property,” Irwin said, “I would have no interest in it at all if it had the kind of structures they’re talking about.”
“They” is Tri-State Generation and Transmission Association Inc., a Denver-based, cooperatively owned electric utility, and what Tri-State is proposing has some residents on several high, windswept mesas in southwestern Colorado worried. Tri-State wants to upgrade the 69-kilovolt (kv), three-strand power line that now runs from the 100-megawatt coal-burning power plant in Nucla, Colo. It crosses 45 miles of private ranches, ranchettes, the Uncompahgre National Forest and Bureau of Land Management property to the outskirts of Telluride. Tri-State would replace that line with a substantially larger, and more visibly intrusive, 115 kv line to provide backup power and accommodate growth in the region.
Doing so, say those who live close to the power line, would represent a “takings” that could cost them millions in property values. The new power poles would be either single poles as high as 100 feet, or H-shaped double-pole structures.
Irwin, who paid $3.5 million for his land in 1989, has no idea how much the visual impact of a new line would reduce the value of his property. He’s willing to foot the bill to put it underground on his land – at a cost of $1.5 million or more – but has been told by utility officials that undergrounding may not be permitted.
Typically, a story like this ends here, with the power company getting its way. But something different is happening in San Miguel County. An ad hoc committee is urging the U.S. Forest Service and county commissioners to deny permits for the upgraded power line in favor of a house-sized emergency generator on Telluride’s outskirts. That novel idea has been met with near-ridicule by Tri-State officials. But it is being taken seriously by the Forest Service and the county, and may represent the wave of the future as communities across the West struggle with the realities of growth – and as electrical co-ops ponder how to survive in the increasingly deregulated field of electricity generation and sales.
Common sense or overkill?
The Nucla-Telluride line, about 50 years old, is one of two powerlines that serve the western San Juan Mountains. The other line is a 115 kv set of cables that runs 75 miles up through the western San Juans from Hesperus, near the New Mexico border. This line crosses three mountain passes, including Ophir Pass at 11,300 feet, making it the highest power line in the U.S. Capable of providing 50 megawatts of power, it supplies the Telluride region and areas to the south toward Durango.
The Nucla-Telluride line is a backup source that can feed Telluride, its ski area and the resort of Mountain Village, in case the power from Hesperus is interrupted. But at 69 kv, the old power line can carry only 13 megawatts – about half of the Telluride region’s current peak load. Consequently, if an avalanche or midwinter storm disabled the Hesperus line and it could not be repaired quickly, Telluride and Mountain Village could suffer significant disruption. Redundant power lines of equal capacity, utility execs say, would prevent that. In addition, the upgraded Nucla power line would help Tri-State accommodate growth throughout southwestern Colorado.
“We’re running out of transmission capacity to serve that area from other sources,” says Tri-State senior vice president Steve Fausett. “With the number of people living there right now, we’ve reached a point where reliability is really getting to be an issue.”
That may be true, says J.R. “Wes” Perrin, a board member of Telluride’s electrical co-op and of the citizens’ committee studying alternatives to the power line upgrade. But that doesn’t mean a new, 115 kv power line is the answer. “For our emergency power needs, it’s overkill,” says Perrin. “We don’t need a 115 kv line to back up a power line (from Hesperus) that goes down an average of 28 hours every seven years.”
Instead, Perrin’s committee – San Miguel Energy Research Group (SMERG) – has recommended that the local co-op, San Miguel Power Association, lease and install a natural gas-fired turbine close to Telluride. With a generating capacity of 17 megawatts, the turbine, in combination with the existing 13-megawatt line from Nucla, could handle Telluride’s peak loads of about 30 megawatts. The turbine would be fired up only if the Hesperus power line went out. The result, says Perrin: plenty of reliable backup power.
A report prepared for SMERG by Competitive Utility Strategies of Boulder, Colo., concluded that not only would the turbine be just as reliable as the new power line, it would be cheaper to build, maintain and run over the next 20 years: $8.86 million vs. $15.76 million for the new power line.
Tri-State quickly countered with its own study, arguing that SMERG’s report was full of erroneous assumptions and that standby generation would cost somewhere between $48 million and $51 million * more than triple the cost of the power line.
The competing reports delayed a U.S. Forest Service environmental impact statement on the line upgrade, which was to be released last June. The Forest Service has hired an independent consultant to sort out the competing analyses, and plans to release a draft EIS in February. Even if the agency approves the upgraded power line, San Miguel County Commissioners would have to sign off, too.
A new reality
SMERG’s standby generator is a glimpse of a new reality in the world of electrical power: distributed generation. Historically, electricity has been produced by utilities at large, centralized power stations and transmitted over great distances to be sold by the same utility in a regulated market. All of that is changing. Twenty-six states have deregulated their electrical utility markets in some form, and most observers say it’s only a matter of time before Colorado follows suit. As a result, the business of electrical generation and sales is shifting from one of great predictability to unnerving uncertainty.
In California, Montana and Wisconsin, deregulation has produced wild market spasms, as once-fixed prices for power have risen and dipped, causing even some proponents to question the wisdom of an open market. Ultimately, deregulation is supposed to be better for consumers – and it would, in theory, make room for the type of innovation SMERG is proposing.
Distributed generation, or D.G., looks like the future to many energy pundits, some of whom believe D.G. is the fuzzy little mammal scurrying around the feet of old-style electric utility dinosaurs. Rather than being based upon large, centralized power plants, the electrical utility industry will, they say, start to resemble the Internet: a loose web of many small and medium-sized power producers and consumers.
“D.G. has become an essential tool in the rural electric service toolbox,” says Paul Bony, a spokesman for Delta-Montrose Electric Association in western Colorado, another Tri-State member. DMEA is the first co-op in the nation to test a fuel cell, a home furnace-sized device that produces electricity from propane, natural gas or hydrogen – but does so without any combustion. In theory, such devices can be installed directly in consumers’ homes, run constantly, and feed surplus electricity backwards through consumers’ meters, lowering their bills.
It sounds appealing, but it’s a long way off. “You’re very much in the infancy of this technology,” said Bill Setti, a vice president for distributed generation at Ohio-based Energy Cooportunities. “It’s not well-enough defined to know where it’s going to land.”
Currently, co-ops like San Miguel Power Association and the 31 others that make up Tri-State aren’t allowed to generate their own electricity. They are bound by an “all requirements contract” that obliges them to buy all their electricity from Tri-State, and requires Tri-State to provide reliable power no matter what (one reason Tri-State wants to upgrade the Nucla-Telluride line). Co-op members began discussing a possible loosening of that contract with Tri-State in October.
Presently, 79 percent of Tri-State’s power comes from coal-burning plants, 21 percent from the Western Area Power Administration, which generates hydroelectricity at federal dams built by the Bureau of Reclamation. Less than one-tenth of one percent – about 10,000 megawatt hours – of power sold last year by Tri-State came from wind or small hydro-generating sources. The firm wholesales power at 3.5 cents per kilowatt hour; last year it cleared $17 million on $438 million in sales.
As Tri-State and other generation and transmission (G&T) utilities consider the potential for a deregulated market, their executives ponder investments in new, expensive generating capacity to meet demand in the booming West, even as co-ops are agitating for the right to generate their own power. In the past, state public utility commissions set rates guaranteeing that investments in power plants and transmission lines could be earned back from ratepayers. In the future, that probably won’t be true – which means many utilities are hesitant to make big capital outlays.
SMERG’s Perrin sympathizes, which is why he wants to avoid sinking $15 million into an upgraded power line on the scenic mesas outside Telluride. “It anchors us to past technologies (of centralized generation and transmission),” he says, “rather than linking us to future technologies. We’ll have to amortize that line over 30 years, and all the new technologies will pass us by.”
In addition to providing power to its co-op members, Tri-State sells power to other regions. Last year, sales outside the co-op system accounted for 36 percent of Tri-State’s revenue. That, Perrin charges, is really why Tri-State wants this new line – to help it move power to booming areas in Arizona and California. If Tri-State can sell power at a premium there, say the utility’s executives, those profits subsidize rates for co-op members. That subsidy may help keep co-ops in the Tri-State fold. If it can’t, co-ops and consumers may choose to go their own way, thus eroding the entire structure upon which Tri-State and many other G&T giants were built.
“I think this deregulated market is creating a transmission bonanza,” Perrin says. “The people in our area are going to suffer devaluation of their property so Tri-State can get into the deregulated market.”
Not true, Tri-State officials say. The proposed line upgrade doesn’t play any role in the bigger picture of marketing power through the Southwest, says Fausett. “As lines go, a 115 kv line over a large area is really small potatoes.”
Tri-State officials want San Miguel County to play ball with everyone else in the co-op. “The region is being asked to become part of the grid,” says Fausett. “Folks around Telluride are concerned about contributing a right-of-way to the transmission grid, when in fact hundreds of miles of transmission (lines) have been built to get power to the Telluride area.”
Nevertheless, every power line expansion or addition represents a potential battle, and those fights won’t get easier as the West gains population. “It’s one of the dilemmas of being in the utility industry,” says Bob Gardner, a spokesman for Glenwood Springs-based Holy Cross Electric Association. “While people want you to provide for their needs, some people don’t want to pay the price for that.”
Holy Cross recently upgraded a 69 kv line that leads into Aspen to 115 kv. “People can certainly come and take a look at what we’ve done,” Gardner says, adding he doesn’t think there’s a huge visual difference. Now, Holy Cross must accommodate burgeoning growth in nearby Snowmass Village. Another line upgrade? Perhaps – or perhaps not. Says Gardner: “We’re considering distributed generation in all of our service territory.”
Hal Clifford burns the midnight oil in Telluride, Colo. He is a regular contributor to High Country News and Writers On The Range.
Copyright 2001 HCN and Hal Clifford
This article appeared in the print edition of the magazine with the headline Backyard power struggle.
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