Distribution System Operators Leverage Energy Resources for Grid Optimization

Electric utilities like United Power have historically operated under a traditional distribution model — delivering power, often generated hundreds of miles from the homes and businesses it would eventually energize, using traditional fuels like coal and natural gas. Because members were only consuming energy, electricity only needed to flow in one direction. 

Today, a diverse array of energy resources is helping supplement traditional fuels, and the cooperative is investing in new generation located closer to the communities it serves through a strategy known as “hyper-localization.” Thousands of member-owned rooftop solar systems, occasionally coupled with integrated battery storage, dot the service territory. Many more homes are equipped with Wi-Fi-enabled smart devices, such as thermostats. 

These technologies can help members reduce their reliance on the grid and manage energy more intelligently and efficiently, but they are also forcing utilities to reevaluate the traditional distribution model. Energy no longer flows in one direction from the utility to the consumer. Members are now pushing energy they generate back onto United Power’s system and sharing data that can help the cooperative optimize and modernize its operations to improve system resiliency and power reliability. 

“The way our members use energy and interact with the grid is changing, and it is causing a shift in the energy industry,” said United Power President and CEO Mark A. Gabriel. “We are operating in a new normal, but it has also created opportunities for us to look ahead and plan. Our Cooperative Roadmap outlines the vision for ensuring the cooperative can continue meeting our members’ energy needs through operational adjustments.” 

Our Cooperative Roadmap recognizes that the adoption of grid-accessible technologies and the advancement of United Power’s hyper-localization energy strategy are reshaping the electric grid. The two-way flow of energy and data between the cooperative and its members has allowed it to begin proactively transitioning to a distribution system operator (DSO). A DSO is an emerging operating model for better managing power supply, generation assets, and other energy resources on a dynamic, interconnected, and locally controlled distribution system. 

“A DSO gives us the flexibility to leverage the power of local resources,” Gabriel said. “United Power will always need power generated outside its footprint, but there are concerns about new transmission infrastructure keeping pace with demand. The hub of our electrical system is becoming increasingly more local for this reason, whether that is the solar on our members’ rooftops or new energy projects built right here in our service territory.” 

As a DSO, United Power will coordinate distributed energy resources, or DERs, through a robust distributed energy resource management system (DERMS). DERs are the member-owned generation and storage systems connected to the local system or energy management devices that the cooperative can access through participation in voluntary member programs. A DERMS platform optimizes these energy assets to provide load relief, balance demand, and improve energy resilience. A DSO model is essentially members helping members, communities helping communities — The Power of Local in action.  

Members can participate in this cooperative grid when they: 

• Adopt technologies like rooftop solar, battery storage, or smart devices that can connect directly to the grid and be part of a more responsive system.
• Participate in energy programs like Smart Rewards, which offer incentives for shifting energy use away from peak times, helping reduce strain on the grid.
• Use smart technologies like smart thermostats, delay-start timers, or EV chargers to help manage energy use more efficiently, often automatically.

“Early adoption of energy technologies has led to a generous diffusion of resources connected to our system,” said Tyler Bain, United Power’s Energy Solutions Director. “It gives us the opportunity to consider innovative programs that reward members who participate and help the cooperative manage energy across the system.” 

Simply put, operating as a DSO is an efficient way to leverage the combined resources of members and the cooperative for mutual benefit. Over time, members will have new opportunities to take part in how energy is generated and managed locally. Even if members do not actively participate right away, the system is still being designed to deliver benefits across the entire membership, and every member will have a role to play.

Summer is now here, and members may start to notice their electric usage increase over the next few days and weeks. Heat waves have brought record temperatures across parts of the West, and Colorado has already experienced many days above 90 degrees this July – with several approaching 100. 

Staying cool and saving energy is possible. Try a few of these simple tips in your home. 

• Adjust your thermostat by a few degrees. Many people will not notice the slight change, but your energy usage will. You can save up to 3% for every degree you adjust the thermostat, according to the National Renewable Energy Lab.
• Use programmable or smart thermostats. You can pre-cool your home so it is comfortable when you return from work or adjust the temperature remotely to save energy when you are away. 
• Use ceiling fans. Ceiling fans circulate air to create a “wind chill” effect, cooling you down without actually cooling the room. It pulls heat away from your body making you feel cooler. Paired with adjusting the thermostat, you can stay cooler without making your air conditioning work as hard. Since fans do not cool the room, remember to turn them off in empty rooms. 
• Block out the sun. Remember to close blinds or curtains. Open windows allow sunlight to warm the air in your home, which forces your air conditioner to work harder. 
• Cross ventilate your home. When the sun sets in the evening and the temperatures drop, open your windows to let Colorado’s mild climate do the work for your air conditioning. 

United Power members can access their energy usage history through the Usage Explorer, available for free through SmartHub, the cooperative’s online account management tool. You can learn more about the Usage Explorer here. 

You can find more tips about saving energy this summer here. 
 

United Power is more than your local electric utility, and you are more than a customer. The decisions United Power makes are not to satisfy investors or generate profits, but to serve members and communities, ensure the system is well maintained, and to deliver safe and reliable power that members rely on. 

This focus on people instead of profits is one of the benefits that makes cooperative membership different. Another benefit that sets membership apart is the retirement of capital credits. If you are new to the cooperative or unfamiliar with capital credits, these represent your investment in the co-op. Here is how it works: 

Becoming a Member

You become a United Power member-owner the moment you activate your electric service with the cooperative. As a member, you have unique privileges, one of which is the principle of economic participation. A portion of each electric bill you pay goes toward the cooperative’s operation and infrastructure, representing your ownership stake. 

Capital Credit Allocation

Each spring, any funds remaining after all expenses are paid from the prior year are allocated to members. Your allocation represents your ownership in the cooperative (i.e., the amount of money you have invested in the electric system based on your electric consumption — generally meaning your allocation will be larger if you consumed more energy). The funds are tracked, but not accessible in cash form. You are notified of your allocation amount on your bill in May or June each year. 

Capital Credit Retirement

The Board of Directors carefully assesses the cooperative’s financial condition each year and determines if a capital credit retirement is feasible. This year, the Board approved a $4.5 million retirement with distribution beginning at the end of August. 

Anyone who had service in 2025 or earlier will be eligible. Distributions will be issued as a bill credit if they are less than $50 and will arrive as a check if more than $50.

Learn more about capital credits or call 303-637-1300 to speak with a Member Services Representative.

We have accomplished so much the past two years since our exit from a single wholesale power contract on May 1, 2024. Nothing has slowed down at United Power; the entire team here continues to move forward on our path to a new energy future. We are supporting our members through a diversified portfolio of wind, solar, natural gas, battery storage, and market purchases from more than two dozen providers. We are investing in local power production and incorporating energy management tools to help meet our members’ power needs. In July of 2025 we energized the nation’s newest natural gas peaking plant, Mountain Peak Power. The 162 MW plant was designed, commissioned, and operational on one of the quickest timelines ever attempted for a facility of this type. 

We recognize there are rising costs to deliver energy, and our team sought a $262 million grant from the U.S. Department of Agriculture Rural Utilities Service, through the New ERA program in 2023.  After committing to a substantial investment into our communities over the next decade, and with generation facilities already producing energy, United Power became the first utility to receive initial funding this year. 
 
Our latest milestone was reached when we joined the Southwest Power Pool regional transmission organization on April 1. This strategic move aims to ensure a reliable power supply, while managing costs and providing access to diverse energy resources for our current and future members. It is the marketplace that will allow us to capitalize on cooperative-owned resources and deliver power during times of peak energy demand, helping us to balance costs and reliability.

On this two-year anniversary of our exit from our former wholesale power contract, I think it is important to acknowledge and celebrate these accomplishments and all the ongoing and vital work United Power employees do every day to support our members. For their contributions – large and small – I am very thankful.

I remember my first week on the job at a small utility in Vermont 30 years ago. My boss, Steve Allenby, was explaining how rates were designed when our CEO, Tom Webb, walked in to introduce himself. He studied the notes on the board and said, “We want to keep bills at or below the rate of inflation.” I readily admit that the concept of making rates was a mystery to me that day.

Tom’s comment has stuck with me over the years — through recessions, economic downturns, inflation, wars, and even a pandemic. At times, it has been difficult to balance what is happening in the world and its effect on costs with the desire to keep rates in check. As a not-for-profit electric cooperative, we are not focused on making money for shareholders, but rather on supporting our members and keeping the utility financially strong.

The first pillar of Our Cooperative Roadmap is to empower and engage with members and communities, and we are doing just that in the development of a multi-year rate strategy. Earlier this year, we sent a survey asking members for their input on how our cooperative should balance financial needs with impacts on bills. More than 3,000 members responded, with approximately 1,000 members indicating an interest in continuing the conversation with co-op
leadership. We held three separate meetings with residential members and met with dozens of you during the annual meeting. We are also hosting a workshop for commercial members in May. We are taking that input into consideration as we develop the final strategy to present to your Board of Directors this summer.

As important as it is to have a rate strategy, it is equally important to understand what United Power is doing to control costs and help members do the same. We cannot perfectly control the negative impacts of global events, such as supply chain disruptions or the cost of fuel and critical equipment, but our staff works to smooth price impacts with an approach to procurement that secures cost and delivery, often years in advance.

These are a few of the areas where we are seeking to contain and manage costs:

• Growth pays: Developers, whether they are building data centers, new residential developments, or commercial buildings, pay 100% of the up-front costs so it does not impact other members.
• New ERA Grant: United Power was fortunate to receive a grant from the U.S. Department of Agriculture Rural Utilities Service that directly lowers power supply costs over the next 10-15 years, helping us to smooth rate increases. Four of the seven projects approved as part of our grant application are already serving your energy needs. The grant pays down 25% of the cost of these resources as well as three others that will come online by the end of 2029. We are one of only 15 cooperatives across the U.S. to get this critical support and we are the first in the nation to receive the initial grant disbursement.
• Power Market: United Power — along with 40 other cooperatives, municipal utilities, and the Western Area Power Administration — joined the Southwest Power Pool on April 1. Having a power market in the West allows for the economic use of generation and transmission and means the lowest cost energy gets used first. Due to United Power’s recent investment in the Mountain Peak Power gas plant, as well as our 119 MW of battery storage, when we have power that the cooperative is not using, we are able to sell it to others at a price higher than our costs.
• Efficiency Programs: United Power offers a number of ways for our members to make the most efficient use of the power we provide. From home audits to United EV, our team of Energy Solutions professionals is standing by to help you manage your energy use.
• Distribution System Operator evolution: We incentivize members to engage in energy efficient habits, such as shifting usage to off-peak hours. This creates the opportunity to purchase energy when it is less expensive. Our system becomes an effective tool in controlling costs through the dispatch of member-owned energy assets connected to the distribution system.

Our partnership with members is critical as we continue to meet the needs of our growing communities. We know rate increases, especially when they are unpredictable, make it difficult to plan your budget. Consistent, small increases, more aligned with inflationary pressures are easier to plan for and manage. We are committed to seeking ways to keep our costs in check and to help you with your energy needs.

As always, please feel free to reach out to me with any questions or comments.