Orchard City backs DMEA in hydropower scuffle

By Hank Lohmeyer


The Orchard City Town Board has agreed to lend the town's support for development of local renewable hydroelectric power generation.

Following a presentation to the trustees during their meeting on March 9, the town staff will draft a letter to the Federal Energy Regulatory Commission opposing a proposal by Tri-State Generation and Transmission. The Tri-State proposal, if adopted by FERC, would have the effect of raising the cost of local renewable hydroelectric power projects beyond what is economically feasible for development.

DMEA Director Mark Eckhart of Cedaredge attended the town board meeting and made a presentation in response to an invitation to explain the current DMEA vs. Tri-State battle at FERC.

Tri-State is opposing DMEA over revenue it would lose under DMEA's renewables initiative. "Tri-State has a lot of debt," Eckhart told the trustees, "and they are fighting tooth and nail.

"If we want to fix Delta County, we better get on this" as an economic development issue.

The town was given a March 18 deadline for submitting its letter.

Delta-Montrose Electric Association has previously said the deadline was March 11. But that information was wrong. Eckhart explained utility officials stated that date in order to encourage people to get letters to FERC in by the real deadline, which is March 18.

Eckhart said that some believe local renewable power generation could eventually provide up to one half of DMEA's current electric load. He described it as "very possible."

DMEA is well over the 5 percent limit on local generations stipulated in its contract with Tri-State. That is due in part to the closure of North Fork coal mines, events which have cut 11 percent of DMEA's power customer business. As the percentage of DMEA's total power generation declines due to the closure of big customers like coal mines, DMEA's sources of locally produced hydropower take on an ever greater share of its total power use.

The DCI has reported on the ongoing dispute between DMEA and Tri-State over developing local renewable energy resources for local power generation. In particular, backers of renewables initiatives locally see great promise in hydropower and in use of coal bed methane as sources of electric production potential here.

According to Virginia Harman, DMEA's manager of member relations and human resources, Tri-State's proposal to FERC asking for a rate penalty on local renewable power generation "would penalize DMEA or any other cooperative that interconnects with local renewable generation."

Tri-State's move "threatens DMEA's efforts to bring renewable generation -- and the possibility of tremendous economic development -- to DMEA's service territory," Harmon noted in an information advisory.

"If successful," Harmon added, "Tri-State's proposal would let it impose a 'lost revenue recovery fee' when DMEA makes ... renewable energy purchases."

DMEA won a ruling from FERC last year because the local co-op was up against a limit on local power purchases imposed by its contract with Tri-State. The contract required DMEA to buy 95 percent of its energy supplies from Tri-State, thus limiting to 5 percent the amount of energy DMEA could buy from local renewable projects.

DMEA's successful completion of the South Canal hydro project has led to more local renewable power project proposals.