YVEA leadership evaluating proposals for possible new power supplier

Yampa Valley Electric Association members enter the 2022 annual meeting in June conducted in the vehicle bay at the YVEA offices on the east side of Craig.
Suzie Romig/Steamboat Pilot & Today

The leadership at Yampa Valley Electric Association co-op is working with consultants to evaluate four viable proposals for a possible switch to a new wholesale power supplier.

YVEA issued a request for proposals for power suppliers in late 2021 and received six proposals, YVEA President and General Manager Steve Johnson said this week. Xcel Energy currently supplies 95% to 96% of the co-op’s electricity supply.

“We are evaluating the power suppliers within the market to determine if our future is going to be with Xcel or if it’s going to potentially be elsewhere,” Johnson told YVEA members at the co-op’s annual meeting on June 28 in Craig.

Johnson said the YVEA Board of Directors plans to discuss the power supply contract during the October board meeting as part of the annual budgeting process. The contract with Xcel, which extends to 2042, requires a five-year notice to end the contract, so the soonest a power supply switch could happen would be Jan. 1, 2028, he said.

Tom Fox, a YVEA board member of 11 years, said working with Xcel Energy has been challenging since YVEA is a “small player in a very large arena.”

“Xcel is just difficult to deal with mostly for the lack of responsiveness,” Fox said. “We just can’t get information.”

“It’s going to be a big decision because we are making likely a 15- to 20-year contract decision,” Fox continued. “Xcel isn’t out of the mix, but they are sure going to have to step up.”

YVEA started to investigate other options in the power supply market about four years ago as the state government moved toward cleaner energy requirements, Johnson said.

With “so many big things happening in the market right now,” Johnson said, YVEA created new vice president positions to boost the leadership team. YVEA recruited two former leaders from Delta-Montrose Electric Association who joined the Yampa Valley co-op in September 2021 including Vice President of Operations Virginia Harman and Vice President of Finance Wade Pynes.

Any possible change in power supplier would be a long and complicated process, so in the meantime, YVEA has met regularly for the past year with Xcel representatives working toward modifications to the current contract hoped to be completed by October.

 YVEA wants to negotiate a larger “carve out” with Xcel for the amount of renewable energy that can be provided on the local level that would increase that allotment above the 3% allowed currently, Johnson said.

YVEA also is requesting a contract modification to try to reduce the impacts to members from large swings in fuel costs, such as what was added to member bills for eight months in 2021 following Storm Uri in the southern United States in February 2021. About $6.4 million in costs were passed down to YVEA customers in the form of a bill line item titled “February Xcel power cost adjustment.” Those additional costs due to Storm Uri have been fully paid to Xcel, Johnson said.

“Storm Uri really accelerated what we want to do,” Johnson said at the annual meeting. “As we look to the future, some of those types of things, we are trying to get them out of the contractual language, so that if something affects the market, then it’s not our responsibility to bail them (Xcel) out. If they miss the mark, that should be on them and not on us.”

“We really don’t have a lot of other arrows in our quiver to help hold them (Xcel) accountable to some of these things,” Johnson continued. “Which is honestly why we are doing a lot of exploration as to what the market is going to look like for us the next five, 10, 15, 20 years.”

Johnson said the “Xcel power cost adjustment” added on YVEA bills in March, April and May this year could continue for 12 or 18 months. Those current power cost adjustments are due to inflation in the natural gas market and the increase in costs to produce electricity, Johnson said.

During the member comment time at the annual meeting, Craig retiree Jayne Morley pushed the co-op leadership to consider contracting with a different wholesale power supplier.

“I’m tired of Xcel messing up and us paying the cost,” Morley said. “Keep looking at our faces and think of us. This is really starting to hurt.”

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