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Colorado Mills Exploring Solar Farm Power Options

 

The high cost of electricity was highlighted during the July 24th meeting of the Lamar Utility Board as Colorado Mills General Manager, Rick Robbins, and Tim Hume discussed the cost-saving option of developing a solar powered generation unit for the Lamar based company.

Robbins was one of several local businessmen who originally approached the LUB and Arkansas River Power Authority ARPA around five years ago, regarding the high cost of electricity at their respective businesses. Rates have not changed for the better he noted, distributing to board members, a power cost analysis sheet showing how Colorado Mills’ rates have increased from $0.10491 on average, from 2005 to the more current $0.16988, or almost seventeen cents per kilowatt hour averaged in 2017.  “Our best year for electric costs was 12 years ago,” he commented.

The company’s strategic planning shows electric costs have been as high as $92,000 a month for last month and have averaged $80,000 per month through the year. Robbins indicated that amount approaches 10% of power sales for the utility company and he’s looking for low-cost solutions, one of which is solar power.  “We’re looking to be able to save around $20,000 in electric costs by the end of 2019,” he said, adding that his company has ten electric meters and he’s paying $300 per month per meter, just to have them read by Lamar Light and Power.  Robbins noted that a solar powered facility could generate from a half a megawatt to a full megawatt, “We could pay for that solar unit in three years,” he explained to the board, adding that he wanted to discuss his options before the group.

Hume added, “We’re happy to have been a part of the city for almost 20 years and it’s been a good place in a lot of ways, but electric rates are not competitive here. We could move the facility and pay for it in about 10 years, but we’ve chosen not to do that, it’s not something we’d want to do at all, but we’ve got to find more competitive electric rates and a solar farm is a way to save a significant amount.  A solar farm could generate a percentage of our usage.”  Robbins noted that if the company moved out of the local rate structure, “We could be saving $500,000 a year someplace else.”  He said the company can’t logistically go completely off the grid, but solar is one of three options being considered to see a 20% reduction in electric costs.

Light Plant Superintendent, Houssin Hourieh explained the utility has a net metering policy for separate power production facilities. “Our net metering policy is 10 kilowatt hours for residential and 25KW for commercial and that’s based on state statutes.”  He added that Colorado Mills’ plans would exceed those limits and switches from net metering into a power purchase agreement that would have to be conducted and approved through ARPA which was echoed by LUB attorney, Don Steerman.

Hume stated, “You’re giving us a huge incentive to leave the City of Lamar.” LUB members agreed the loss of $1M a year in sales would have a huge impact on operations, plus the potential loss of 48 Colorado Mills employees, their local salaries and the levels of electricity they purchase.  The loss of a major power purchaser was an option board members had signified as a possibility several years ago when they were first approached by the group of business owners over current rates.  Some major power buyers, such as the Lamar Truck Plaza, have converted to LED lighting which has lowered their utility bills, but at the same time, it also meant a revenue loss to Lamar Light and Power.  Board members expressed concerns that dropping revenues would be made up through increasing electric rates.

Steerman and Hourieh said the pending agreement with Tri State G & T to purchase ARPA is about 3 to 4 months away and without revealing any specifics, said the current situation is likely to improve. Hume said he’d be willing to meet with ARPA to explore those possibilities while the company will continue to look at the three cost-saving options they had mentioned earlier.

By Russ Baldwin

 

 

Filed Under: City of LamarConsumer IssuesEconomyFeaturedUtilities

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