Newsmaker Q&A: PVREA’s Gaskill promotes a mix of fuels

This summer, Poudre Valley REA announced that Northern Colorado’s first community solar farm was officially up and running. The farm allows PVREA members, after paying $618 per panel (including rebates and tax-credits), to utilize the renewable energy source regardless of their home’s location. Solar’s fortunes, however, seem to have dimmed. The Business Report asked PVREA CEO Brad Gaskill what’s next for energy in Northern Colorado and how he plans to get there.

Q: Why did PVREA decide to commit to building a community solar farm?

A: Well, I think it’s really two-fold.

In 2007, the Colorado General Assembly passed legislation that required Cooperative Electric Associations, including Poudre Valley Rural Electric Association, to have a certain percentage of our energy portfolio come from eligible renewable energy resources.

Under the current legislation, we’re required to have 10 percent of our portfolio come from renewable sources by 2020. That’s certainly been a factor in our decisions to add renewable energy to our resource mix. It’s a legislative mandate we have to meet. The second reason is that our management team and the board of directors are supportive of the development of new renewable energy projects. We are always looking for opportunities to incorporate renewables in ways that make sense, bring value and are beneficial to our consumers.

The solar farm has allowed us greater reach to help more consumers utilize solar energy. It has provided an opportunity to renters and those with poorly situated homes for solar, as well as those that can’t afford the high upfront cost, to utilize solar energy. It allows them to participate in renewable energy and not have to build a costly system on their own.

Q: How will energy in Northern Colorado change in the next 10 years?

A: Certainly as a result of the renewable portfolio standard electric utilities are required to meet, renewable energy will play an increasing role in the overall energy mix in the future. Renewable energy is here to stay, but the problem with renewables is they are an intermittent resource and often not available when you need energy the most. Typically, during peak electric energy demand periods, the sun isn’t shining and the wind isn’t blowing, meaning solar and wind resources need to be backed up by more reliable sources such as hydro, natural gas and coal. In my opinion, renewables won’t play a major role in the area’s or nation’s overall energy resource mix until an economical storage technology is developed allowing the resources to be dispatched during peak demand periods, making it more dependable and economically viable.

With the recent shale oil and gas play in the area coupled with its current and predicted low prices for the next decade, natural gas will become a more dominate player in the region’s overall electric generation mix.

Fossil fuels will not be replaced in 10 years, or even in 30 years. In my opinion they will remain a significant part of the energy resource mix for the foreseeable future. The region, as well as the nation, has an abundant supply of both coal and natural gas and they are the cheapest and most reliable fuels for electric generation. We can’t just turn our backs on them, however. We need to continue to invest heavily in R&D to invent new technologies that will burn coal and natural gas cleaner and make them more environmentally friendly and acceptable.

Q: How has the PVREA responded to the negative news in the solar industry?

A: We haven’t had to deal with that issue at our level. Certainly no one has asked me about the association’s opinion or position on those solar businesses that received federal stimulus money and then later had to file for bankruptcy. The fact is, we have a renewable portfolio standard that we have to meet, and we will try to incorporate those renewable resources that make the best economic sense, bring value and benefit the membership to meet our requirements.

Q: What’s next on the agenda for Poudre Valley REA?

A: PVREA is a cooperative business, owned by the consumers/members that receive our service. As we look to the future, our focus will remain on our core business of providing safe, reliable and cost-based electric service with exceptional customer service, as we have in the past.

As most companies during this prolonged tough economic period, we face many challenges. I see our biggest concern and challenge moving forward is our ability to continue to provide reliable and affordable power to our members/owners. We continue to see increasing rate pressure on wholesale power costs. Wholesale power costs account for 77 percent of PVREA’s annual expenses and they continue to escalate almost annually. We purchase our power from Tri-State Generation & Transmission Association Inc., headquartered in Westminster, Colo., under a long-term, all-requirements power supply contract. Tri-State is also a cooperative business owned by 44 member electric distribution systems, like PVREA, in Colorado, Nebraska, New Mexico and Wyoming. And even though the economy has struggled over the past several years, Tri-State’s system has consistently seen load growth and an increased demand for electricity. This, coupled with ever-increasing new and expensive government regulations, environmental standards and legislative mandates, is driving up Tri-State’s power production and power purchase costs significantly, which are passed on to PVREA and its other 43 member systems, which are then passed on by us and ultimately paid by our consumers/members, the end users.

The continued pressure on wholesale electric rates coming largely from the cost of new government regulations, legislative mandates and environmental standards is a real concern and is what keeps me up at nights. The PVREA management team and board, along with our state and national trade associations, will continue to work with our state and federal legislators and well as our regulators to hopefully find common ground, sensible and meaningful solutions that will allow us to continue providing safe, reliable and affordable electricity while achieving our region’s and country’s environmental goals. PVREA will also be asking our members to get involved and become more active in this discussion to help us help them keep their electricity reliable and affordable.

PVREA will remain member-focused and base our decisions in the best interest of our membership.

Q: Every CEO leaves a mark on their company. What will yours be?

A: As with what any CEO wants, I want to leave the association in better shape than it was when I took over its leadership.

We are a member-owned, not-for-profit organization. As such, I have always been member-focused, making tough and sometimes unpopular decisions with the employee team, to do what is best for the membership to keep their rates as low as possible, while providing reliable electricity and great customer service, especially during these past few years when many of our members have suffered and struggled because of the tough economic times. Always doing the right thing for our members is hugely important to me.

Also, electric utility work is inherently dangerous, and several members of our employee team work day in and day out with high voltage electricity in a dangerous environment, even in good weather. Then add in a snowstorm, blizzard or high winds and nightfall and the dangerous conditions greatly intensify. Therefore, my focus, dedication and commitment to team member safety, safety of the members as well as the general public, has always been my No. 1 priority. I can’t stress enough how important my team members’ safety and well-being is to me.

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