New Mexico Co-op Dumps Monopoly Supplier to Offer More Solar — Episode 143 of Local Energy Rules

Date: 17 Nov 2021 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

Rural areas are sometimes isolated, disconnected from modern conveniences and the latest technologies. The digital divide is real, but one cooperative in New Mexico is proving to be an exception as it connects customers to affordable solar energy and reliable Internet service.

For this episode of the Local Energy Rules Podcast, host John Farrell speaks with Luis Reyes, General Manager of the Kit Carson Electric Cooperative. Reyes, who has been with Kit Carson for 37 years, has experienced the cooperative’s evolution firsthand. Farrell and Reyes discuss how Kit Carson’s exit from Tri-State Generation and Transmission allowed the co-op to target 100 percent daytime solar power — without sacrificing affordability or reliability.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Luis Reyes: So I do think they have to adapt. And if they don’t, I do think distribution co-ops have an obligation to exit, to fulfill their members expectations and requirements. John, that’s why we’re formed, for the members and, and this tail wagging the dog that’s occurred, right, where the generation & transmission co-op is dictating to the distribution co-op what’s good for us, doesn’t work anymore.
John Farrell: Taos New Mexico is a rural community that attracts visitors for its beautiful landscapes, winter skiing, and quality of life. The town and surrounding communities will also receive 100% of their daytime electricity from local solar projects starting in 2022, on route to carbon free electricity in 2030. If that’s not enough, the utility serving the area Kit Carson Electric Cooperative also launched internet service over fiber optic cables initially laid to make its grid smarter. And it’s now connecting every one of its 30,000 members to high-speed affordable service. I spoke with Kit Carson General Manager Luis Reyes in October, 2021 about the member engagement that led to big investments in the local economy. I’m John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy. Without further ado, Luis, welcome to Local Energy Rules.
Luis Reyes: Yeah. Thanks John. It’s nice to talk to you again.
John Farrell: Now, your cooperative has gotten in the news for all sorts of reasons around clean energy, but one of the things I think most people don’t realize is that you’ve really been at the helm at Kit Carson for a long time. I looked up in your bio and I think you’ve been there now for over 25 years. I was just kind of curious to start out by asking you, you know, how have things changed for being a rural electric cooperative in, in New Mexico during your tenure? I can imagine that there’s a lot of things in terms of technology and how things are moving that might be different.
Luis Reyes: Yeah, John, thanks. Yeah. I’ve been fortunate actually to be here at Kit Carson for over 37 years and the CEO general manager for it’s going to be almost 29 years. And so, you know, one of the things that have changed is members’ expectations. Co-ops have always been pretty democratically controlled. Uh, we listen to our members, but what I’ve really seen is members really do not have problem in more of them, uh, speaking up for what they want from their, from the co-op. So I see that change. I’ve seen the change of members that don’t remember being without electricity. When we started, you know, there was still enough kind of the old timers that remembered when the first lineman came to the ranch or farm and got that one light bulb going, you know, a lot of our members don’t remember black and white TV, so much less electricity, you know, it’s always been there. And, and I think the other thing that has really been unchanged is really the co-op model, uh, and really how it strengthened going forward doing during the, this energy transition, during COVID. Having local control, having a say in your local energy supply and what you want for your local co-op, I don’t think that’s really going on change. In fact, it really is a hallmark of the strength of the co-op model. And so, as you mentioned on technology, you know, we’ve gone from analog meters to smart meters, but I think they’re all positive changes there. They’re really all positive changes. And I do think I continue to see the co-ops in the forefront of this kind of new energy world we’re facing. And we’re probably the best equipped to, to address it. I think that’s positive for the combination.
John Farrell: So when we talked before Luis, well, it had been really exciting to me in speaking to you, was that the cooperative was on track to get a hundred percent of its daytime electricity from solar by 2022, so that you and working with your members had made a lot of investments, a lot of plans around developing solar. Now this was a few years ago. I’m curious, are you on track to meet that goal? Can you explain a little bit more about what that means? Like daytime electricity, obviously solar energy only available during the day, but like what share of the co-op’s overall electricity will come from solar? Give us a context for that and tell us how the plans are coming along.
Luis Reyes: So John that’s true. It’s always been a goal of Kit Carson and its members. It really, it started out as how do we get more solar than we can get today. And, and under the old structure that we were under, we could only gain 5% of our energy from renewable resources. And then, you know, that was kind of uniform in common through the co-ops that took power from G&Ts across the country. And so as you may know, at a certain point, our members wanted more from us. So we decided to exit our G&T.
John Farrell: Let me interrupt really quick just for the listeners who don’t know the term G and T have it said degeneration and transmission co-op so it’s the co-op of co-ops that would build a powerful, and you might be able to explain it better than I, but just making sure that we do explain it.
Luis Reyes: Okay. Thank you. Thank you. So yeah, our generation & transmission co-op so it is a co-op of co-ops who are looking for power. A lot of these generation & transmission co-ops were formed in the fifties because no one else wanted to serve, uh, electric co-ops and they, they served us well during that time. But as more renewables came to the forefront, more communities wanted local choice. You know, it was Kit Carson’s opinion that our, that the generation transmission model, as good as it was, just couldn’t keep up with the changes and the expectations our members had with Kit Carson. And to be honest, we weren’t sure if they were able to, to make that change. And so, uh, we decided to exit from our, our generation transmission co-op, uh, it was a, what I would call amicable. I mean, it was negotiated and we worked out the issues. So we didn’t end up in court. And we exited with an exit fee and we had a couple of goals.

The first was we wanted more affordable and stable rates. We had just gone through a series of rate increases that we thought were becoming unaffordable. The second is we wanted our members to choose, or our members wanted to choose their power supply or have some options. And one of those options was more solar. And so we exited in 2016, we had had several meetings with our members, but after the exit, uh, in 2016, uh, we established a co-op goal of 100% daytime solar, and then we’re going to hit it by 2022, which ironically was the same year that we would finish paying off that big exit fee that we negotiated with generation & transmission co-op. So you fast forward and we’re going to do it through DER. We’re going to distributed – It may cost a little bit more, but it was a member’s feelings that everyone wanted their kind of their solar facility in their community. And so that will come to benefit us in the future as things evolve, but that was our model. And so fast forward today, we’re going to hit that target. Right now, we’re about 63% daytime solar and finishing our last two big solar projects. The last two big projects will come with battery storage. So at the end, we’ll have enough solar we’ll have about 41 to 42 megawatts of distributed solar that will match our daytime demand or capacity. And we will probably at the end, John, generate about 42 to 44% of our energy will come from solar.

Kit Carson is located in the high in the mountains here, uh, spur off the Rocky Mountain Sangre de Cristo mountains. Uh, we’re actually a nighttime winter peaker. And so we do, because of the cold weather, we’re a resort town, a mountain town. We saw a lot of energy at nighttime. Snowmaking is a big driver in the winter time for the four ski areas that we serve. And so, you know, that’s, that’s kind of the first step in this transition that would have never happened under the old model. And I think that’s important as we are seeing the effects and impacts of climate change and the impacts of us not moving quick enough into this renewable energy world. And so the next step is, and let’s, let’s add some storage and then let’s, let’s start address transportation.

And so besides Kit Carson having, uh, we’ll hit our goal by June of 2022, to hit that a hundred percent daytime solar. And you know, what that really means is when the, when the sun starts to come over that horizon and hits that first solar array on the east side of our system, we start generating electricity. And when it sets in the, uh, in the west and we have arrays in the east, the west, the north, the south, and in house, you have solar generation distributed across our territory. Uh, we’re generating solar as soon as the sun comes up and, you know, it’s, like anything it’s not perfect. We know that there’s cloudy days and there’s rainy days. And we know that at night, it doesn’t shine, but we think this is a process and technology will catch up. The next step is installing batteries. We think battery technology will evolve to long duration. You know, we, we read and see the research then hydrogen for base load. And so I think as, as we move into this new world, technology will keep up.

And then with the addition of, uh, electric vehicles, we’re starting to build out our EV charging infrastructure and looking at ways to have EVs deployed in, in, in our territory. And I think the, one of the underlying goals is access to all. The old kind of old model, outside of the 5%… the only people who really could afford rooftop solar was those who had some means. And I think that that, that is starting to change. You see more community solar projects. Our system, if you’re a member of Kit Carson, you’re going to get solar energy, uh, because it is, it is our, it’s our primary resource mix. And so we want to take that same philosophy for electric vehicles and charging. That just because you may not be financially able or you’re low or moderate income doesn’t mean that we, we can’t give you opportunities to experience, uh, EV transportation, whether it’s something you own, whether it’s in the secondary market, used cars, or whether it’s enhancing or growing public transportation.

Again, these are things that John aren’t, aren’t pie in the sky. We actually, if you come to our territory, you can see probably we’ve probably done 12 different projects on the solar side. Everything’s, uh, you know, from a hundred KW to 15 megawatts, um, we’re putting about 15, almost 16 megawatts of storage. So they aren’t small batteries. They are big enough to take us through peak times if we use batteries for peak or for reliability, if we have to pick up critical circuits during outages. So we’re really on this track to be a, a carbon-free, you know, our goal right now is 2030 as other people shoot for 2040, 20 50. We think it’s doable much sooner. You know, one of the issues when you’re the first adopter is it’s a little tougher and maybe a little bit more pricey, but we get to experience the benefits sooner. So, so that’s where we’re at.

It’s been a great journey and we’ve, we’ve learned a lot about solar and batteries. We’ve also learned about a lot about our members and, and their, their requirements, their needs and how important it is to listen to them. So that’s, you know, we’re kind of in phase one of this, this journey after we’ve left and it’s really been kind of right now, one of the highlights I think the, not just what I’ve done here at the co-op, but the co-op itself. And I think nationally, what co-ops can do when they decide to engage their members, listen to their members, and then put that plan actually into action.

John Farrell: Let me ask you about a little bit more about, you left your generation and transmission co-op Tri-State and are not the only co-op that has done that. And you mentioned that it’s because you didn’t feel like the model that they had really was adaptable enough to, to the interest of your members, like to accelerate a deployment of renewable energy and solar that you were also had, those cost concerns. Do you think that that will change? Do you think that the generation & transmission co-ops having seen, like your co-op Kit Carson or Delta Montrose in Colorado or in other places will start to shift and give more flexibility to their local co-ops to generate more of their own energy, to offload some of the expensive resources, like the coal power that they’ve had for many, many years? Or do you see other co-ops needing to follow in your footsteps in terms of looking to exit and to go on their own? Just because there are so many co-ops, I mean, there’s, they serve, you know, one in seven customers across the country gets their electricity from a rural electric cooperative, but there’s really only a handful like Kit Carson or the Kauai Island Electric Cooperative, or Delta Montrose that have really set off on the course that you’ve said.
Luis Reyes: Yeah. So, so I do think, I do think we have to be real careful when we go forward, because there are some co-ops that still feel that the current generation transmission model works for them. I mean, if we’re really talking about flexibility and there are some cops that still think that the generation transfers corporates is the best way to aggregate power, uh, then uh, then I think they have to do what they need to for their members. I do, though, see a growing sense of a lot of co-op members through a lot of co-ops I talked to that do want change now because their members are, as I mentioned, we’re not unique in having a younger demographic. We have a lot of folks moving in from California and New York. So you have this, uh, this kind of transformation of urban folks moving into rural areas. Cause they like the lifestyle and the quality of life, but they still want the amenities and they want clean air and clean water.

So I do think that if the GNTs are going to survive, they’re going to have to adapt. And I don’t think it should be the other way around that the distribution co-op has to adapt. I think we, as distribution co-ops, created the G&Ts right? The G&Ts were a product of the distribution co-op’s desire to have their own power supply. And so, uh, I think if generation transmission co-ops don’t adapt, then you’re going to have more co-ops wanting to exit. And I think they’re going to want to exit not because the manager does or the board, it’s because the members want flexibility. Just as you mentioned, people want choice. What we’ve experienced here is people want to believe that the renewable energy they’re getting is local. So for someone to say, you’re getting renewable energy, but it’s from 500 miles away. It sounds good, but it’s not really ever getting here to my, to my home. With Kit Carson, you can, you can drive a couple of miles away and you can see that solar array that you just follow the lines that goes right to my house. So I do think they have to adapt.

And if they don’t, I, I do think this should, distribution co-ops have an obligation to exit, to fulfill their member’s expectations and requirements. John, that’s why we were formed, for the members and, and this tail wagging the dog that’s occurred, right, where the generation transmission co-op is dictating to the distribution co-op what’s good for us, but it doesn’t work anymore. I think the other issue is the generation transmission co-ops policy makers have to make it affordable for, for, for distribution co-ops to exit. There can be this outlandish fee to exit. And I understand, and we, we actually had a kind of key hole, Kit Carson’s exit should not cause any distribution co-op to subsidize us. And so I think that’s important because I don’t want anyone to subsidize us as if we decide to move a different direction. When you follow what’s happening, when you have court cases and millions of dollars going to lawyers to help. So additional distribution co-op wants to leave to meet its members expectations. I just think that’s wrong. I think the G&Ts in this case are just wrong too, because at the end of the day, it’s the rate payer, it’s the member who pays the legal bill. And so I don’t think that’s right. And I think there has to be flexibility. It has to go back to how we were formed: the democratic process.

And I think if we don’t allow distribution co-ops to really explore what’s out there, rural areas will continue to get further and further behind when it comes to energy whether it be, because right now the policy, at least in the Western states is to close coal mines. And a lot of coal mines are being closed. And so if people don’t have choice from their co-op or their G&T they’re going to do it, a lot of people they’re going to start putting solar on their home. They’re going to start putting batteries on their home and make that choice that not every member has, right. That, that right now that’s still kind of cost prohibitive for a lot of members. So again, my hope is that the generation transmission would create a model going forward that allows those who want to stay to stay. And those who want to exit, exit affordably and, and without a lot of litigation and move on to what we were created was to deliver services to rural Americans.

John Farrell: We’re going to take a short break. When we come back, I ask for more detail about the benefits of distributing their solar projects. We talk about the cooperatives foray into affordable broadband internet access, and Luis shares his number one recommendation for other rural electric cooperatives. You’re listening to a Local Energy Rules interview with Luis Reyes, general manager at the Kit Carson Electric Cooperative in Northern New Mexico.

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John Farrell: I’d love for you to talk a little bit more, if you’re willing, about the solar and the fact that it’s local, you mentioned before that members are interested in kind of being able to see the connection between the solar that’s being built and their house. That, you know, you ended up projects that you’ve been building in Kit Carson territory, or close by. People can drive out and see them and see the, see the wires that connect that solar array to their home. Could you talk a little bit, you know, you mentioned that it might’ve cost a little bit more than say doing one centralized solar array or doing that through a G&T for example, what were some of the things that members were interested in? Are there economic benefits that aren’t on the utility bill, necessarily, that you can account for? Are there things like resiliency or reliability benefits, again, that don’t necessarily show up on the bill that were things you were thinking about and building solar out in that way?
Luis Reyes: Yeah. So John first, I think it’s really reliability and resiliency. I mean, we could, if you can control your own power supply, and again, you know, these are, these are building blocks. So 44% of our energy is local. So during the daytime, if there’s a system issue, we can control that. We can continue to deliver energy since we live in the mountains. But, you know, we were really concerned about fires and forest fires and having power lines run through there and having to shut down power so that firefighters can fight that. With the way we’re designing our system, we can actually shut down the lines and still have power because of solar and batteries to at least take care of critical infrastructure during those times. So it does bring in, it starts to bring in resiliency, helps us kind of, uh, attack these emergencies that come to us.

Economic development,  one of the things that we decided is that we were going to build these locally with local contractors. And so we got the local developers in a room, asked them if they could partner together to build it. Four came into the room, three left as partners. And so for the past six years, we’ve had local people building our arrays, which keeps people working, but we’ve also been able, these companies now are able to export their skills to other parts of the Southwest. So it’s, it’s created an economic development. John, you hear a lot from policymakers, even from power suppliers saying, well, they’re, they’re temporary short-term jobs. They may be, but if you’re, if you work six months here, and six months there, and six months, and all of a sudden, you’ve worked two years at four different jobs, but it’s the same, same skillset. That’s no different than someone building a house. You build a house, you have to move on to the next house and the next house. So construction has always been kind of temporary permanent. And so it’s, it’s brought that economic development aspect.

It’s brought us a kind of a marketing tool, you know, if we live in the Rockies and, uh, our tourism is based around clean air, clean water, making sure we have sufficient snow to ski. What, what better energy supply than have solar energy supplying the energy to ski areas and to schools and to businesses. So there is a lot of factors and a lot of benefits in, in building distributed solar because of our grid.

You know, if I lost a lost a solar array, let’s say on the east side, I can serve it from the west side to our transmission lines. And so it does give me now some redundancy with the solar facilities. It also allows us the ability to island or, you know, we in essence are creating a micro grid that if we have to, we can isolate ourselves from the main grid at times that week, you know, uh, we may have to, I think with, with, uh, COVID, it’s hard to say nothing is bad is going to happen, right? Because that really showed us we’re pretty vulnerable to things that we aren’t prepared for or don’t think will ever happen to us. And I think we have to think that same way when it comes to operating a utility. Now you could have a fire that you didn’t have before. And how are you going to handle that? You could lose a power plant and how are you going to handle that? Those things happened.

So, yeah, I think there’s just, it’s just not getting clean energy and clean energy that’s affordable. It’s all these other benefits that the community gains, everything from a resiliency to economic development and everything in between. I think the other thing is creating a model that other co-ops can, can, can look at and take from it the lessons learned. There’s some things that, yeah, we probably wouldn’t do that the same way as Kit Carson, but there’s a lot of things we do because we’ve been successful in deploying this. John today, we probably have, we have about 29 unincorporated communities. So they’re not a municipality that, you know, just little, little communities we have over half of them today, and I’m looking outside, it’s a sunny day. We already have half of our system already, 100% daytime, right. That schools and that’s churches. And that’s a post office. That’s a health clinic. You know, it works. I think that’s, that’s, it, it works. The members are satisfied with that energy, the lights aren’t dimmer, right? There’s not a reliability issue. It works fine. We have it in the north part where we have a lot of irrigation, that solar today is pumping water on the crops. And so it’s almost become the rule, not the exception. It’s almost, if you don’t have solar on your house, then… I would, when we first started this, my fellow co-ops basically said, you know, we weren’t the cool kids. Cause who, who does solar? Just Kit Carson and a few hippies. You fast forward to 2022. If you’re not doing solar, you’re not the cool kids anymore, because it has become a very valuable, low cost reliable resource.

John Farrell: That transition actually brings to mind one question I just wanted to ask, you know, one of the goals that you had in exiting your G&T was to be able to do this local solar. It was also in response to affordability issues. You were worried about the rate increases that were coming for your members. I know that you have this exit fee that you’re going to be paying off next year. Has it already been more affordable than had you remained members of Tri-State and what does that look like going forward, especially once you’ve paid off that fee?
Luis Reyes: So, so John, that’s a great question because it, you know, that’s something that’s always kind of misinterpreted. Our cost of power today is cheaper than it was when we left Tri-State. So solar costs are down. It is my understanding that after we left, here’s a, here’s an amazing little tidbit. When, when we left in 2016, that was a major event for Tri-State and for Kit Carson, and really for the, for the co-op world. We paid an exit fee that was to keep them whole. And we, we had actually had come out of a rate case. Since then, though, Tri-State has not had any rate increases up to 2022. In fact has had a, my understanding has had a rate decrease, slight rate decrease. And again, I suspect that with the exit of Kit Carson and the exit of Delta Montrose and the potential discussions of other co-ops wanting flexibility, price stability, and the threat that other co-ops would exit, Tri-State did not continue to, to raise their rates.

Because we didn’t get, we didn’t get any big loads that would stabilize that out. Uh, there was not a fundamental change in how, how Tri-State was operating their system. It’s kind of what I said. I think they finally heard what the members wanted and that was normal rate increases, or we were just going to leave and we wanted more renewables or we’re just going to leave. So I think they actually became a victim of, if you don’t listen to your members, then the members will decide and dictate what’s going to happen. So this is a good case of where I think Tri-State had to be responsible or forced to be responsive to its members. And for, and for Kit Carson, again, we haven’t raised our rates. Our power cost from Guzman Energy is lower than it was with Tri-State, we’ll pay the exit and we pay the exit fee that will be done basically forever, right? So our members will see a decrease.

I think the one area that we really are focusing now is on transmission because when you look at the whole energy picture and you, you want to move renewable energy, let’s say solar east and wind west, you need a transmission system to do that. But if the transmission providers are, are, are too expensive, then we were back in that same dilemma. So not being able to have access to renewable energy because now the transmission system is too expensive. And that’s why I think our DER model, uh, weathers that, because we’ll have to take our non renewables from a transmission, but more and more, we’ll generate more of our system resources here locally so that we can kind of weather that, mitigate those costs. But we’re, we’re actually in a, in a, in a really good position going forward, both on having a lot more renewable resources available to us going forward and also rate stability without jeopardizing reliability.

You know, there’s a lot of talk from lawmakers and utility companies that going renewable, it’s going to be unreliable. We’ve been… you know, it’s been really, it’s been very reliable. You know, it’s kind of talking out of both sides of your mouth. When you say it’s, it’s unreliable to go to renewable while you’re building a hundred megawatt solar facility somewhere, right. It is reliable. It just, I think, I think we have to get out of these scare tactics and, and say, you know, sun doesn’t shine at night, so let’s put some batteries or let’s get wind that, that follows that nighttime profile. And instead of us as co-ops and utilities making excuses why we can’t, we should figure how we can. I think once we get past that hurdle, then I think you’ll see a, even a faster adoption of renewable energy.

But once we decide we can’t fool our members anymore, by putting these obstacles in front of them, because our members are pretty sophisticated, they’re pretty smart. And they formed a co-op. I mean, they, they formed our entity, they have us, you know, so I think we’re in a great position, everything that we thought we’re going to get out of this exit we’ve accomplished. I do think, and again, we’re kind of scouring all the websites, but I think when in, in, in June of 2022 would probably be the first, at least on the continental United States to hit 100% daytime solar were our energy is coming from resources that are local. You know, it’s pretty cool to be one of the first ones to be able to accomplish that. And, you know, we’re a small to midsize co-op. We have 30,000 members, uh, serving three counties. And if we can do that, certainly the bigger co-ops and bigger utilities can do it.

John Farrell: I agree. I love that story. And I love the fact that the, the leaders in solar, we, at one point, we’re talking about Farmers Electric Cooperative with Warren McKenna, you know, you know, I spoke with them and then I was talking to folks around Decorah Iowa. They have an energy district there that’s done a lot of investing and helping folks do energy efficiency and solar. And I think they said at one point that in their county, they had more solar per capita than any other place in the country. And it has just been really remarkable to realize that people think that it’s urban areas and places with progressive policy that are leading. And I just think it’s such a great way to flip that around and to tell people, no, actually, it’s, it’s these rural communities that have, you know, the democratic ownership of their systems that have this interest in self-reliance that are really demonstrating to us, what is possible and taking advantage of that flexibility that they have.

Speaking of that, I’d love to ask you a little bit. I know we’ve talked a lot about the clean energy work that you’ve done, but you’ve also done some investments in internet service is something that’s been common among a lot of rural electric cooperatives as well. I have a colleague here at ILSR who directs a program that looks at community broadband networks, and he loves to surprise people by telling them that the internet service they get in the city they live in is probably slower and more expensive than most of North Dakota, where co-ops have made huge investments in that. So I’m really interested to hear what Kit Carson has been doing around broadband. And if you can explain a little bit about how you’re able to do that in a way that a lot of other utilities can’t be so nimble.

Luis Reyes: Yeah. So, so, so John, that, that has been along with solar, one of probably, and especially during COVID kind of, one of the shining stars of, of, uh, of the region is, you know, we started a broadband company, 2000 fixed wireless, just, just because our members didn’t have any other choice. Now, in 2015, about 2008, we started to put fiber between substations so that we could communicate and really start to create a smart grid. So we really want to modernize our grid, be able to utilize smart meters control substations, you know, all this stuff that utilities should be doing. Then we were able to get a large grant and in 2015, so today we have about almost 3000 miles of fiber optic that goes past every single customer member. We have, we offer gig services. We offer as fast as any competitor in the, in the region we currently have about almost 11,000 subscribers.

And during COVID we connected schools, did hotspots, started programs basically to connect rural school districts and the, and the students at no cost just so they could get on. And it really has kind of dovetailed real nicely with the renewable energy world, because we had a lot of people, we have a lot of people moving in from, like you mentioned urban areas because of COVID they could work anywhere as long as they had a connection. So people moving here would like to work in the morning and hike in the evening or a ski in the morning and do some outdoor recreation in the evening, but they had, they had to get connection. And so, and really helped our schools. We had a lot more schools, uh, uh, students connected or going to school because we had a connection. You can tell when you’re on a zoom if you’re on Kit Carson or someone else, because you didn’t have to turn off your video because you didn’t have enough bandwidth.

And so we had more people working, living here, even if temporary, cause they could work in Austin or Dallas or Phoenix or Denver, but they had a better connection here. And then the quality of life, right? I mean, you’re talking a population of Taos of, of 5,000 versus the population of Austin over a million. During these trying times, the smaller populations made it easier to navigate this COVID world it’s in. And we’re trying to create a model. We’re actually trying to create a model for the north central part of the state that we can connect rural communities on. And you said, we have probably faster speeds in neighborhoods than they do in Denver, Colorado, certainly faster than Albuquerque. And it’s affordable. I mean, we, we, uh, because of the co-op model and our basic or first principle is service, not profit. And so we’re giving fast broadband speeds to students, you know, for 25 bucks. And so they could get 50, 50 megabits up 50 megabits now for $25. So that three, you know, two, three or four kids and someone on Netflix at the same time. So their world wasn’t that much more disrupted because they had to take turns on zoom or those types of things that you’ve heard about. And it’s really then helped on our, our electric cars. Now we have about 90% of our system is smart grid we collected. And then we can almost in real time, get data back to the co-op to help us whether it’s an outages, a low voltage issues and all those, those technical issues that a utility historically needs someone to call in to say, there’s a problem. We almost know instantaneously because we have the meter connected to the fiber connected back to our dispatch center. I mean, it’s actually, our fastest growing business is, is, is broadband.

We get requests from even places out of state. You know, you just kind of query on best broadband and Kit Carson Internet comes up, uh, and we just serve this territory, but it’s, it’s really been a great service to the community. And, and because John, I don’t think, I think a lot of how we do business today is going to stay. I think a lot of businesses are going to allow their employees to work from home. If they have a good connection, that’s extremely important in rural areas because now they don’t, they won’t lose their jobs. If they can get a connection, they can keep them, they can still, you know, work and, and, and still be the primary caregiver for their kids or elderly parents that are more prevalent in rural areas, in urban areas where, because we do have extended families, right? There’s, you know, their families live in one whole community and take care of each other. So I think the other, other benefits that people don’t think of are those types of things of having that connection that’s helped with, uh, besides distance learning: medicine. Now the clinics are wired. So people don’t have to travel all the way into town or Albuquerque for a doctor’s appointment. You can do it versus video first because your connection is very good. Then, then if you have some issues that a doctor means, see, then you come into the office. So it saves both time and money and peace of mind because you can do it instantaneously.

So there’s a lot of other benefits that this broadband has brought in. And I think it’s, I think broadband is going to becoming a utility, just like electric, people are not going to tolerate being without it. In fact, I probably get more broadband calls if there’s an outage, then I get electricals. And even though they know they need electricity for broad band, some people just haven’t connected those dots. That’s okay. And I think it’s really, it’s helped us, um, you know, on our exit because, uh, when, when it’s given us more time, since we have to take our own power supply, we’re, you know, not being part of a G&T really takes a lot of energy. I think I got probably three to five more days of work and having to deal with power supply issues and the politics around power supply that I really can not pay attention to members and their needs such as a broadband and how to expand those services.

John Farrell: I’d love to just wrap up by asking you about how you think other cooperatives can kind of follow in your footsteps and what, what barriers do you think they might have to overcome? Obviously, having an example is one of the most important things, and you have that in terms of both the way that you’ve done local solar and broadband. Um, what advice do you have for general managers of other co-ops or members of other co-ops that hear about what Kit Carson has done?
Luis Reyes: I think it’s really a member engagement. And I think breaking down the old model of, uh, you know, when you deal with members and give them 10 reasons why we can’t do what you just asked us to do. I think that’s foundational. That’s, that’s the key. If, if you, if you visit with your members and you understand what their issues are, really understand, not just here, here to go to a maintenance, as a bunch of members want this and then develop solutions where it’s interactive with the member. If it doesn’t work, they they’ll understand why, because they’ve been part of the process. It’s when we don’t engage them, that I think we have problems because then they think that we’re hiding something or we don’t want to do more work on their behalf. And I think once you, John, once you figure that out and don’t put excuses, why you can’t do that, then everything else falls in place, right?

But if you don’t have a good communication tool with your members, a good rapport, then what generally happens is members are going to decide to do what they want without you. And so I think that’s a key because it may be staying with the G&T when it comes to power supply. So it may be the reverse where, where you have members saying, Hey, let’s do what Kit Carson is doing. And after you have a good discussion with their members, they may say, we want to stay. Maybe we’re not ready for that yet. So that’s what I mean by not put obstacles, because the first thing we do is right away with things that they want to leave. Some may not want to leave. They just want to have a good dialogue know to make sure that you’re doing, you know, me as a, as a manager is doing what’s in their best interest, really not what’s in my best interest. And, and I think you do that then than anything else you guys want to do, anything from energy efficiency to solar then becomes actually pretty easy because you have the support of the community. And, and if things don’t go well, you have a big support system that you just go back and says, okay, this really didn’t work that way. And let’s retool and let’s do this other way. And I think that’s key. It’s, it’s pretty simple. That’s what we did. We just, we just talked to our members a lot. We listened to them probably more than talking. And right now they’re saying we’re not moving our solar fast enough, right? We we’ve moved, I think pretty fast in, in, in five years, but that’s, it’s good to have those type of problems, right? When there says you’re not putting out broadband fast enough Luis, or you’re not putting up solar fast enough, we like what you’re doing, but you’re not doing fast. Those are good problems to have.

John Farrell: For sure. Well, Luis, thank you so much for taking the time to talk with me. I just find the story of what Kit Carson is doing so inspiring in terms of really living up to the cooperative model, as you say, and being engaged with your members, really important lesson. I think for folks who are in the co-op world about how they can do what their members want, whether or not that’s, as you say exactly what you guys are up to or, or something else. So thank you again for taking the time. Really appreciate it.
Luis Reyes: You’re welcome, John, always nice to talk to you.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules with Luis Reyes, general manager at the Kit Carson Electric Cooperative serving communities in Northern New Mexico with 100% daytime solar energy starting in 2022. On the show page, look for links to the Kit Carson Cooperative’s clean energy and broadband programs, as well as stories about its separation from Tri-State Generation and Transmission Cooperative. On our website, you can also find ILSR’s research on rural electric cooperatives, including a 2014 report and several stories and podcasts about the struggles of cooperatives to live up to their democratic principles and several successes. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer, Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.

Nearing One Century of Rural Electric Service

As rural electric cooperatives came together under the Rural Electrification and Telephone Service Act of 1936, co-op members simply wanted electric service to their rural communities. Now, says Reyes, very few people in cooperative territory can remember a time without electricity. With electrification in the rearview mirror, customer-members are asking for more.

Listen to our previous podcast episode with Luis Reyes, published in 2018.

Together, technological advances and increased member participation are propelling rural electric service to new standards.

I do continue to see the co-ops at the forefront of this new energy world we’re facing — and we’re probably the best equipped to address it.

Generation & Transmission vs. Distribution

Generation and Transmission cooperatives (G&Ts) are the “co-op of co-ops,” generating electricity for the many distribution cooperatives that they serve. G&Ts are further removed from the customer than distribution cooperatives, and accordingly, less accountable to customer needs. Most have long-term contracts with coal plants and cannot allow distribution cooperatives to generate much of their energy locally.

Kit Carson Electric Cooperative was served by Tri-State Generation and Transmission Association, but members of the distribution co-op decided to leave after a rate hike. Reyes calls Kit Carson’s exit “amicable,” since the case did not go to court. Kit Carson does, however, have to pay a significant exit fee.

Listen to our interview with Ed Marston, former board member of the Delta-Montrose Electric Association, who describes the co-op’s struggles before also leaving Tri-State Generation & Transmission.

Freed from the contract, Kit Carson now sources its own power supply and provides choice to customer-members. If G&Ts are unwilling to adapt, says Reyes, distribution co-ops have “an obligation to exit” on behalf of their customers.

There has to be flexibility. It has to go back to how we were formed, the democratic process. And I think if we don’t allow distribution co-ops to really explore what’s out there, rural areas will continue to get further and further behind when it comes to energy.

100 Percent Daytime Solar

Before the split with Tri-State, members of Kit Carson were hungry for more solar power. The distribution cooperative’s restrictive contract with Tri-State only allowed them to generate five percent of their electricity from local sources.

After its “amicable” separation, Kit Carson set a goal to generate all of its electricity with solar — during the daytime. The co-op is 63 percent of the way there and is on track to reach 100 percent daytime solar by 2022. Reyes believes that Kit Carson will be the first utility on the mainland U.S. to achieve this feat. Since regional energy use peaks at night, solar power will account for an impressive 40 percent of Kit Carson’s overall electric load.

If you’re a member of Kit Carson, you’re going to get solar energy.

Even as the cooperative pays the exit fee, Kit Carson’s electricity rates are cheaper than they were before leaving Tri-State. Once the exit fee is paid off in 2022, rates will decrease further.

Investing in Local, Distributed Solar

Kit Carson will reach its 100 percent daytime solar goal by constructing local, distributed solar. Reyes discusses the many benefits of distributing solar power through the community, including resiliency. To prevent forest fires, Kit Carson may have to shut off transmission lines. This is easier to do when the community has local solar and storage to serve essential electric needs.

Investing in renewable energy does not mean sacrificing reliability, as Kit Carson has already paired battery storage with several of its solar gardens. Reyes believes that technology will keep up and that energy storage options will continue to grow.

We have to get out of these scare tactics and, and say, the sun doesn’t shine at night, so let’s put some batteries. Or let’s get wind that follows that nighttime profile. And instead of us as co-ops and utilities making excuses why we can’t, we should figure how we can.

Keeping Up With Member Demands

Kit Carson Electric Cooperative has a secondary goal to be carbon free by 2030. This means that once the utility has 100 percent renewable electricity, it will turn to transportation. Reyes says the cooperative is finding ways to increase access to electric vehicles and improve public transportation.

Started as an effort to modernize the grid with fiber optic cable, Kit Carson is also in the business of Internet access. The cooperative has installed 3,000 miles of fiber optic cable since 2015 and is connecting customers in its territory. When COVID-19 forced all non-essential services online, Kit Carson connected schools and Internet hotspots for students at no cost. Reyes says that Kit Carson Internet is as fast as any competitor.

Kit Carson is not the only cooperative installing fiber optic Internet. Read ILSR’s updated report on How Cooperatives Are Bridging the Digital Divide.

The secret to Kit Carson’s many successes has been member engagement. Reyes stresses the value of collaborating with members to really understand what they are asking for.

Develop solutions where it’s interactive with the members. If it doesn’t work, they’ll understand why, because they’ve been part of the process.

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.

This is the 143rd episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.

This article originally posted at For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.

Featured Photo Credit: Walmart via Flickr (CC BY 2.0)

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Maria McCoy

Maria McCoy is a Researcher with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.