Renewable Energy Certificates & the Local Renewable Project Development Fund

You can offset your energy consumption by purchasing the renewable attributes of renewable energy produced in Colorado and delivered to Tri-State Generation and Transmission Association, or if you prefer, you can contribute directly to a fund for the development of local renewable energy projects.

Background

The electric grid is a complex, interconnected web of generation resources and end consumers. Most people don’t realize that electricity is consumed the instant it is produced and that there is very little energy storage on the grid. What this means is that there must be a near-perfect balance at all times between the amount of energy being produced and the amount being consumed by millions of users.

So where does the electricity you consume come from? There are two ways to answer that question: the contractual source and the physical source.

Contractual Source

We can think of the grid as a giant punchbowl. Consumers have their straws in the bowl and generation is being added from a variety of sources. In this analogy, we can ask what is being added to the punchbowl on our behalf. This is arguably the more important way to consider the source of your electricity. After all, through our consumption, we are responsible for our share of the energy mix purchased to meet our demand.

Gunnison County Electric Association (GCEA) contracts with Tri-State Generation & Transmission Association for its power supply. Tri-State’s power supply includes hydro, wind, and solar. In 2018, 32% of energy sales to member systems like GCEA came from renewable sources. 60% came from coal and natural gas. 8% came from market purchases and the source of the energy is not identified. It is likely, even probable, that many of these market purchases came from renewable sources, but the renewable attributes were not purchased and therefore not counted as renewable in the resource mix. Tri-State continues to add renewable energy to its mix. The 104-megawatt Crossing Trails Wind Project is scheduled to come online in 2020 and the 100 megawatt Spanish Peaks Solar Project is scheduled for 2023. More announcements are expected soon.

Physical Source

The flow of electricity is like the flow of water. It follows the path of least resistance. It follows the easiest, often shortest, path to ground. The nearest generation sources are the hydro plants at Blue Mesa and Morrow Point dams.

The combined peak demand on GCEA’s system is about 30 megawatts (MW). The City of Gunnison peaks at around 10 MW. So the combined demand of the Gunnison Valley and Lake City is around 40 MW. The generation capacity at the Blue Mesa power plant is 86.4 MW. While we can’t say for sure, it’s highly likely that when Blue Mesa is generating, that power is flowing to end users in our service area. With Morrow Point and Crystal dam powerhouses producing a combined peak output of 205 MW, when they are operating it increases the likelihood that power from Blue Mesa finds its way to GCEA. Hydropower, of course, does not produce greenhouse gases and it is highly likely that much of the actual energy we consume comes from hydro. Tri-State gets about 15% of its power from the Western Area Power Administration. GCEA is about 1% of the Tri-State system.

Renewable Energy Certificates

According to the Environmental Protection Agency (EPA), “A renewable energy certificate, or REC (pronounced: rěk), is a market-based instrument that represents the property rights to the environmental, social and other non-power attributes of renewable electricity generation. RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource. Because the physical electricity we receive through the utility grid says nothing of its origin or how it was generated, RECs play an important role in accounting, tracking, and assigning ownership to renewable electricity generation and use. On a shared grid, whether from on-site or off-site resources, RECs are the instrument that electricity consumers must use to substantiate renewable electricity use claims.”

GCEA member Deidre Witherell explains, “The Western Renewable Energy Generation Information System (WREGIS) issues and tracks RECs for the western U.S. A renewable energy generator, such as a solar farm, registers with WREGIS and opens an account. The account is similar to a bank account in that RECS can be transferred or retired at the discretion of the account holder.” RECs can be bought and sold with the renewable energy that they represent (bundled) or separately (unbundled).

The EPA explains RECs in this short video RECs: Making Green Power Possible on YouTube.

Your purchase of RECs allows you to claim ownership of renewable energy and supports a market that provides a small portion of the revenue for new project development. Your RECs, however, do not directly reduce your carbon footprint or reduce fossil fuel consumption. RECs are a part of a complex energy transition. While the REC market does play a role in the development of new resources, it is currently a small role due to low demand for RECs. The RECs you buy are providing revenue for existing projects. This has long been the utility model where large up-front investments are recovered over a long period of time with the realization of the benefit – in this case, renewable energy.

Program Details

When you subscribe to RECs through the Green Power Program, the fee is for the renewable attribute and is in addition to the retail rate you pay for electricity. You can help green the grid by signing up for the Green Power Program. 25% of the fee charged for any of these options is put into a local renewable energy fund to help with the development of future projects.

Green Power Program provides a 130% plus offset by acquiring RECs to offset 100% of your usage in addition to the renewable energy already in your power supply. The cost is $0.0012 per kWh consumed.

Tri-State Generation and Transmission Association, GCEA’s power supplier, does not buy RECs from the market. The RECs it uses to supply the voluntary Green Power Program comes with the power that Tri-State acquires (bundled) under long-term contracts. The RECs retired on behalf of members participating in the voluntary Green Power Program come from regional projects. In recent years these RECs have been created at the Carousel Wind Farm in eastern Colorado, which began producing power in the fall of 2015. The output of the Carousel Wind Farm is purchased by Tri-State to serve its member systems like GCEA. When the RECs are retired on your behalf they are unbundled since, as described above, there is no way to control or track the flow of electricity to your home or business, and the energy produced was consumed instantly. But you can be assured that the RECs retired on your behalf represent renewable energy that was produced in Colorado and delivered to Tri-State in the same year as the energy consumption you are offsetting.

Sequence of Events

  1. Renewable energy is generated, purchased by Tri-State, and delivered to the grid.
  2. Renewable energy certificates (REC) are created by the Western Renewable Energy Generation Information System (WREGIS) and credited to Tri-State’s account.
  3. Participating members consume electricity.
  4. Members are billed for their electricity consumption and REC subscription monthly.
  5. GCEA pays Tri-State monthly for RECs needed to cover member subscriptions.
  6. Tri-State retires (cancels) RECs from its WREGIS account annually to meet all member subscriptions for the year.

Local Renewable Fund

Support the Development of Local Renewable Projects

When you choose this option, GCEA does not purchase RECs on your behalf. Instead, your entire contribution goes into the local renewable energy fund to assist with the cost of future local projects. Your contribution is not tax-deductible. You can participate in one of two ways.

  • As a Local Renewable Advocate, you can sign up to contribute any amount you choose on a monthly basis.
  • As of 8/31/2021, the balance in the Future Local Renewable Project is $10,205.02.

How is My Bill Calculated?

Your monthly bill will include a monthly service availability charge plus a charge per kWh consumed as it does now. The rate applicable to your Green Power Program selection will be added to your bill. For example, if you consume 650 kWh for the month and are on residential rate class 11, your bill will be calculated as follows.

Green Power Program

  • Monthly service availability charge: $29
  • Energy charge (650 kWh times $0.12918): 83.97
  • Green Power Program (650 kWh times $0.0012): 0.78
  • Total: $113.75

Local Renewable Advocate

(assuming a monthly contribution of $5)

  • Monthly service availability charge: $29.00
  • Energy charge (650 kWh times $0.12918): 83.97
  • Green Power Program: 5
  • Total: $117.97

Green Power Program History

The GCEA Green Power Program began in 1999. Until May 1, 2017, members subscribed to blocks of 100 kWh each. On May 1, 2017, an option was added allowing members to purchase RECs by the kilowatt-hour (kWh) to match their consumption.

Rate History

Rate per 100-kilowatt-hour block:

  • 1999 to 2006: $2.50
  • 2007: $1.25
  • 2008 to 2010: $0.50
  • 2010 to 2017: $0.25
  • 2017 to present: $0.12 or $0.0012 per kWh

View the 20 Years Ago Article (PDF) from the Crested Butte News 12/13/2019 edition.