Along with the honor of operating an electric cooperative on behalf of you, our members, comes the accountability of being prepared for the changing future in energy. Two recent, recurrent themes have emerged that emphasize the need for United Power to work diligently to make Our Cooperative Roadmap a reality.

The first is the need to continue investing in the grid, and the second is an ongoing concern that the need for capacity — the backbone of reliable power — is getting perilously close to a crisis. Both issues tend to focus on the problem. United Power is actively seeking solutions.

There has been a lot of talk recently about investing significant financial resources in the grid. The Inflation Reduction Act and Bipartisan Infrastructure Law include funding to target large-scale projects over the next decade. These investments are needed and welcomed, but the completion estimates are measured in years or even decades. Meeting the needs of a growing enterprise like United Power is at least four to five years away, even with aggressive siting and execution.

People tend to think of the grid as the large power lines that deliver electricity from power plants miles away. Much of the energy transition challenge is that a lot of low or non-carbon generation is located far from population centers. Coupled with permitting challenges, supply chain constraints, and a confusing financing model, large-scale projects just take time.

But the grid also includes distribution systems, operated by utilities like United Power. It is the main conduit to our members and requires as much — or more — investment as its larger cousins. Your Board of Directors has continuously supported budgets to upgrade and expand critical infrastructure, and these investments have paid off. United Power has one of the best distribution networks in the country, evidenced by high reliability numbers, rapid outage response, and data-driven system management.

A robust distribution grid is also critical to the second issue — the potential for seasonal power shortages.

The North American Reliability Corporation (NERC), responsible for assessing and enforcing reliability standards, recently found the country is at an elevated risk of having insufficient energy supplies to meet demand in extreme conditions. The reasons for this potential shortfall range from coal and nuclear plant closures and an expanded reliance on natural gas to the increased electrification of everything. 

“Extreme cold weather events can cause electricity demand to deviate significantly from historical forecasts. Electricity demand in winter is closely tied to outside temperature. As electric heat pumps and heating systems become more prevalent, their combined effect on system demand is even more pronounced,” NERC stated.

The industry has tried to slow the energy transition and continue operating money-losing coal plants instead of proposing solutions. And, importantly, there are solutions. This is where United Power’s strategy of hyper-localizing generation and storage comes into play. 

As we prepare for our upcoming power supply transition, United Power is adding significant amounts of battery storage, spread across our system. We are locating natural gas peaking units tied in to the distribution — versus transmission — networks and contracting with power supplies closer to the communities we serve. This reduces line losses, improves reliability, and keeps tax dollars local. We will couple this with efficiency programs, support any members who want to generate part of their own power through solar, and expand demand response options now that we will have a realistic peak window. 

Of course, we will continue to get power from generation plants and support efforts to build out the transmission grid as it will continue to have a role in a modern electric enterprise. But, we will focus on what we can do locally.

As always, please feel free to reach out with your questions, comments, or concerns. United Power welcomes the opportunity to meet with your community groups and discuss the cooperative’s response to the changing industry.

Brighton, CO – On Dec. 19, 2023, the Federal Energy Regulatory Commission (FERC) issued a Final Decision that affirms in part, reverses in part, modifies in part, and clarifies in part an Initial Decision issued by a FERC administrative law judge in September 2022 addressing contract termination methodology and procedures for members exiting from Tri-State Generation and Transmission Association, Inc. (Tri-State). This is an important next step in United Power’s path to exit Tri-State by May 1, 2024. 

“While we are still reviewing FERC’s order, we are pleased to see that it supports a variation of the balance sheet approach methodology we proposed versus a contract damages or lost revenues approach,” said Mark A. Gabriel, President and CEO of United Power.

In a Dec. 8 settlement with Tri-State, both utilities agreed to cooperate in good faith to provide the information necessary to calculate the amount of the contract termination payment. “To that end, we intend to work together to determine the appropriate adjustments and offsets so that Tri-State can timely file its compliance filing, and we can file an executed withdrawal agreement. United Power is focused on efforts to ensure a positive future for our members,” Gabriel added.

United Power has taken steps to resolve disputes with Tri-State and to reach areas of alignment and agreement to timely facilitate its departure. Most recently, United Power dismissed state court litigation against Tri-State, and filed motions to withdraw its appeal and intervention in two separate matters before the DC Circuit Court. In September, United Power made an immediate payment to Tri-State for Reserved Issue 3 in the Stated Rate proceeding consistent with the guidance in FERC’s final order. 

Recently Announced Rate Change Takes Effect Jan. 1, 2024

Last month, United Power announced a rate increase taking effect Jan. 1, 2024, and while it is never easy to hear about prices going up, electricity remains one of the best values in most households. Today’s modern household is powering more appliances with electricity. It provides warmth, safety, sanitation, and entertainment. Consider what was in your home just ten or twenty years ago. How many televisions do you have today, compared with how many were in your home growing up? How many connected devices like laptops, tablets, or phones are charging in your home every day? Even something like air conditioning, which was not a standard feature in Colorado homes twenty years ago, is making the modern household more comfortable. 

When people talk about the rising cost of electricity, they often fail to notice how much more they are using. Rates at United Power have not changed since Jan. 1, 2020. During the pandemic and through the many months while inflation was running rampant in everything our members need to live — from groceries to gas — United Power rates did not change. Advanced planning was one of the key reasons we were able to hold rates steady during that period — from existing orders of heavy equipment and vehicles to belt-tightening in every function at the cooperative. United Power was able to provide stable rates while our members navigated rising prices on everything they need for their households.

The Colorado Sun recently reported on the cost of the five most common grocery items Colorado households purchase — milk, one pound of hamburger, a loaf of bread, a dozen eggs, and a pound of coffee. They reported that over the last five years the cost of these items has risen 35%. The price of many goods has been impacted by increases in transportation costs, labor, and raw ingredients. Any homeowner who was lucky enough to lock in a low interest home loan is still seeing their monthly payment rise due to increases in property taxes and homeowners’ insurance. All of those factors also impact your utility.

Keeping the system operating efficiently and making sure we can replace and upgrade equipment where necessary are adding to our operational costs. Consider when we need to purchase land for a substation to serve a new neighborhood; United Power is paying higher and higher prices to acquire land for this development, and all those costs are paid through the rates members pay for electricity.

One of the most powerful things about being served by a cooperative is that United Power is a not-for-profit entity. The cooperative does not work for shareholders who want to see profits. Anything collected above what we need to operate is considered patronage capital — and is eventually returned to members as capital credits. United Power serves its members with the goal of providing reliable electricity without an eye on profits. 

Learn more about upcoming rate changes.

Transitions in life, both personal and professional, always have interesting twists. 

I lived the switch from conventional “hot type” typesetting to “cold type” primitive computers in my first career out of college as a newspaper reporter. The old way of making newspapers required placing individual letters — that were made of lead — into large, heavy frames in a reverse mirror image. The frames were then bolted onto giant printing machines where rolls of paper became the newspapers we read every day. The thunderous, dangerous, and noisy pressrooms gave way to an era of photo sensitive paper, waxed into big sheets, copied onto plastic and attached to the same giant printing machines. It was just the beginning of the change that would make everyone into a journalist — good and bad — with the ability to wirelessly send their stories anywhere in the world with the touch of a button. Unfortunately, it has sadly meant the demise of many printed newspapers.

The twists and turns and unintended consequences did not happen overnight. In fact, in the world of publishing, the death of local newspapers has been gradual over the decades, not a sudden crash and burn. This change has been a bit painful for those of us who still cherish the smell and feel of a Sunday morning newspaper. I have never been able to get used to the feeling of reading on an iPad; it does not give me the same warm memories as a paper rolling off the presses, making my fingers slightly dirty.

The energy transition has may parallels with newspapers that are rolling out over a quickening pace. The traditional “hot type” world of large power plants and massive transmission projects is giving way to smaller scale generation, power at the distribution system level, and thousands of households adding local resources. 

United Power is working through the ins and outs of our transition to new power suppliers and a new way of operating. We are moving from a single large supplier to more than a dozen — managing our risk through system diversity. We are looking at new ways of operating our system and trying to keep as much hyper-localized and home grown resources as possible. The hyper-localized model, including significant amounts of energy storage, is going to be required as the time to build new transmission is coupled with the closure of major coal plants. This is not a political question but the reality of the marketplace matched with the changing face of regulatory environments.

Hyper-localized generation has significant benefits for our communities as it keeps tax dollars in our region, brings a higher level of reliability and control, and reduces the stress on the transmission grid at a time when more and more electrification is occurring. Our new fuel mix will dramatically reduce carbon intensity rates as we blend natural gas, renewables, and storage while also making the best use of the Board of Directors’ investments in the distribution system over the decades.

For United Power, the transition will occur in phases. Knowing our low tolerance for risk, we have constructed a portfolio that in the short-term mirrors much of what we have with our current supplier in terms of capacity — albeit slightly lower in cost than what we expect it to be in the next 24 months — with a significant change in the mix of energy. As capacity becomes less expensive and markets develop in the short time beyond that window (2026-2027), we will become experts in managing and operating our system with the new tools in place.

As one of my business school professors always mused, “The future is already here, it is just not widely distributed yet.” At United Power we are committed to this transition for the benefit of our members.

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