By Marty Mayfield
Twin Eagle is Raton’s power provider but the power comes from the Xcel Energy power plant at Pueblo, Colorado and goes down a transmission line owned by Tri-State Generation to Burro Canyon then on to Raton on a transmission line owned by Raton Public Service.
That wasn’t always the case as RPS became a member of the Arkansas River Power Authority about 1984. ARPA is a political subdivision of the State of Colorado which afforded seven communities including Trinidad to merge generation and purchase power at a cost savings to its members. When RPS divested it’s membership following a settlement agreement on December 24, 2009 RPS as part of that agreement would purchase the 27 Mile 69-kilovolt Burro Canyon Transmission line and the remaining part of the Wartsila generating unit that was co-owned by ARPA and RPS. In return RPS entered into a 3-year power purchase agreement with ARPA and RPS would not be held liable for the cost of the Lamar Repower Project that originally started out at $69 million and grew to over $130 million. That project to date has not generated any power and the cost has ballooned to over $170 million.
When RPS divorced the Arkansas River Power Authority in December of 2009 RPS was forced to find electricity from another source as Raton was no longer generating its own power. The Wartsila Generator had blown up and the power plant had been moth balled due to environmental issues that were too costly to comply with, not to mention the plant was over 50 years old which attributed to some of the environmental upgrade costs.
Seeking bids from several suppliers, not necessarily the actual electric generation company, Enserco a subsidiary of Black Hills offered RPS a bid that was 6.2 cents a kilowatt for 10 years, something that was almost unheard of at the time. Enserco was one of two bidders who would offer a 10-year contract for electricity. The current RPS contract runs through 2023. The electric generation industry at the time was seeing fuel prices fluctuate as well as increasing transmission costs and increased demand. Environmental issues with coal generation were adding costs to the those plants. Many companies would barely consider a five-year deal let alone a 10-year contract.
Enserco was later purchased by Twin Eagle Resources Management, LLC in 2014, who is a power broker or buyer/reseller of electricity. They purchase power from a generation company and then resell it on the open market or on contract like they have with RPS. Generation costs such as fuel fees are passed on to the consumer as part of the electric bill.
At the time 6.2 cents a Kilowatt was not a bad price yet today some Ratonians are now complaining about higher electric bills. The question here is do they track their usage and costs to really see where the difference in the bills comes from? Is it simply that they use more electricity than they realize? Probably not, as most consumers simply pay the bill. Also as part of that bill there are fuel adjustment costs, transmission costs and other factors that are calculated into the bill. The other factors are costs that are passed on by the generation companies to cusumers, things that RPS or Twin Eagle have no control over.
As RPS nears the end of that 10-year contract it will be time to negotiate a new deal or find a new supplier. Tri-State Generation supplies power to several electric coops in Colorado and New Mexico including San Isabel in southern Colorado, Springer Electric Coop and Southwestern Electric Coop in northeastern New Mexico.
Xcel Energy supplies power to the region from plants in Colorado and Texas. Xcel is also very big into wind energy in Texas and Colorado. Will these companies even bid for such a small load as Raton? Perhaps on a year to year contract and maybe a five year deal if that or will RPS be able to find a good deal with another power broker?
With changes in the federal administration the wind and solar energy picture may change drastically between now and the 2023 when the RPS contract expires. Environmental issues with coal and natural gas will influence their prices which could cause price swings in fuel costs. These are factors that will influence the next electric contract RPS tries to negotiate. Will RPS be able to negotiate another 10-year contract to the benefit of Raton residents? Most likely not, there are too many uncertainties in the electric industry for a company to look that far into the future.