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DMEA finds common ground in diverse constituency

WEST OF COLORADO'S CONTINENTAL DIVIDE, WHERE THE Gunnison River drains a vast and varied topography, a small rural electric cooperative has maintained a face to the future since President Taft dedicated the local South Canal for irrigation in 1909.

In those days, just bringing water and, later, electrification to the region were the simplest priorities. Both resources served traditional farming and ranching needs and the small towns that sprouted here.

Diverse constituency a challenge

Today the Delta-Montrose Electric Association, or DMEA, distributes electricity to not only farms and ranches but also two large coal mines, an array of commercial and industrial customers and urban and rural homes. Commercial customers range from dairy farms to a candy factory, from snowboard and fly rod manufacturers to aerospace-related industry.

DMEA serves about 35,000 metered accounts across Montrose County, most of Delta County (except the town of Delta) and part of Gunnison County. To serve this sprawling territory, DMEA has embraced strategies and technologies that drive out operational costs and prepare it for future contingencies.

Its first challenge is to unite its diverse constituency around common goals. The co-op membership's diversity was on display in recent town hall meetings led by the National Rural Electric Cooperative Association (NRECA), where co-op members ranged from conservative ranchers to latter-day hippies. One observer noted the meetings' "heated discussions" and "highly charged" atmosphere as locals aired their disparate perspectives and concerns about DMEA's initiatives. Yet common cause emerged around support for DMEA actions to help the local economy, promote local self-sufficiency and adopt measures to control costs over the long run.

Utility side first

The advent of deregulation more than a decade ago jolted this co-op. Large power providers might cherry pick the co-op's largest industrial customers, skewing the rate base and sending bills sky high for residents and small businesses. Thus began two decades of innovation.

In the 1990s the co-op began to market and install geothermal heat pumps and joined other co-ops in providing members with Internet connectivity via a fiber-optic network. In the 2000s it experimented with fuel cells and the potential of vehicle-to-grid power, drawing the interest of BusinessWeek. Today the co-op is adding hydro power on the South Canal and offering shares in community solar arrays that will provide the limit of local generation (5 percent) allowed under DMEA's contract for bulk power from Tri-State Generation and Transmission Association, Inc. Power from methane gas and biomass is being explored as well.

But these high-profile projects shouldn't obscure the co-op's dedication to its membership's fundamental need for low-cost power and a degree of control over its destiny.

"Our philosophy is to drive out costs through technology, best practices and energy efficiency for us and our customers," said Steve Metheny, assistant general manager.

The utility side of this strategy has in the past included implementing a SCADA system and an AMR system with interval meters. Today it means analyzing life-cycle costs when considering technology choices in general, and adopting a meter data management system in particular. By participating in NRECA's multi-utility, stimulus-funded project, DMEA will also assess its members' interest in prepaid accounts, in-home energy displays and direct load control measures.

Members and smart grid 2.0

On the membership side, which Metheny dubs "smart grid 2.0," the co-op must answer the basic member question: "What's in it for me?"

"If we provide members with energy usage information, that puts control in the members' hands,"

Metheny said. "We're testing now to determine how many members would use such a system." Engaging DMEA's membership and providing them with energy management tools underscores the co-op's essential mission, according to Dan McClendon, the co-op's general manager.

"We try to give people the education and the technical tools to manage their electricity use to help themselves and the group," McClendon said. "But education doesn't happen overnight." DMEA's consistent outreach should pay dividends as the conversation with its membership becomes more complex. While the co-op has conducted a direct load control pilot program for hot water heaters since 2005, topics such as prepay, time-of-use rates, in-home displays and, inevitably, future rate increases are coming to the table.

Smart grid 3.0 will be when the two sides interact productively, perhaps employing distributed generation, energy storage, dynamic pricing, electric vehicles-you name it, co-op managers say. Moving forward will require consensus.

Mark Kurtz is DMEA's newly hired smart grid coordinator. While he recognizes the co-op's diverse membership, he says they're not that far apart on concerns about environmental impacts and interest in energy efficiency. He knows that messaging around future initiatives will be crucial.

"`Smart grid' has a bit of tar on it now," Kurtz said. "We'll build message around `empowering the consumer.' So our messaging will be: `Your bill may increase by x amount, but if you use these tools, you can mitigate that increase.'"

Sticking with the basics

Preparing for a newfangled future is all well and good, but down at the Elk Creek Mine near Somerset, the main concerns remain cost and reliability-and predictability. Mine operator Oxbow Mining LLC uses nearly 40 million kWh per year to produce Its high-BTU, low-sulfur coal, which serves power plants east of the Mississippi. Along with Arch Coal, Inc., the two mines are the co-op's largest customers and the county's highest taxpayers.

Electricity costs directly influence Oxbow's cost per ton and thus revenue and profit. Reliability is critical to operations; the mine has no meaningful backup power. Predictability, however, involves visibility into the future on costs and business sustainability. So the mines have vital reasons for keeping track of DMEA's direction.

"DMEA has been good to notify us of proposed changes, including rate increases, in the past," said Rob Bowman, a financial analyst at the mine and a newly minted member of the co-op's advisory board.

Sticking with bottom-line basics, while reaching for the best practices of the future, has garnered DMEA Its share of attention from the outside world.

"A large part of our success is how we share and promote our experiences," said McClendon, the general manager. "We let the world know what we're trying to do. We build relationships at the state and federal level. They hear our story. Among our co-op peers, more and more of them are working on the kinds of things we're working on. So I'm glad our story is getting out."



The project list at DMEA is lengthy. Here are a few more salient details about each, with links to even more information.

DMEA has provided an online "Home Energy Savers" booklet, offering tips to customers on saving energy and money at home. It can be viewed here:

The co-op also offers its customers home appliance rebates, explained here:

DMEA last fall donated 15 Kill A Watt electricity usage monitors to the libraries within the company's service territory. These devices can now be checked out, like any other library materials, and used by members at home to plug in their 110-volt home appliances and other electronic devices to determine their electrical draw and the resulting cost.

The South Canal Project, a combined effort between DMEA and the Umcompahgre Water Valley Users Association, is part of the two groups' commitment to developing western Colorado's hydropower potential. The two filed for a federal release of power privileges to use the run-of-river flow of water coming through the Gunnison Tunnel for approximately six MW of generating capacity. The hydroelectric plant, announced in September 2009, is considered one of the largest renewable energy facilities in western Colorado.

The project has an historical connection, as well as the added bonus inherent in being a run-of-river project: no dam construction in necessary. As far as the history is concerned, the six-mile Gunnison Tunnel was first opened in 1909 by then-U.S. President William Howard Taft. More information on the project is available here:

As of April 2011, DMEA's community solar array was fully leased, and the co-op is exploring a potential second phase to the project. In the first phase, both residential and business co-op members were offered the opportunity to lease a portion of DMEA's two 10-kW photovoltaic solar electric arrays, with leases starting at a one-time $10 payment, ranging up to $10,000 worth of capacity. Members leasing a portion of the solar array receive a credit on their electricity bills each month for the electricity their portion of the array produces.

Each $10 block leased provides members with 2.67 watts of solar capacity in the array (an estimated annual bill credit, per $10 block, of about 50 cents). More information is available here:

DMEA's net metering policy encourages its members to install solar, wind, hydro and other renewable generation devices up to 25 kilowatts (aggregate nameplate capacity at one metered location) to either fulfill or partially fulfill their own electricity requirements. Interconnection standards are also set, and applications must be made to the co-op. Information is here:



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