Discover how Tri-State and our members are embracing the opportunity to power the West in our new podcast, Western Watts!
We'll dive into the heart of energy issues, from reliability to wildfire mitigation, and share firsthand insights relevant to rural, agricultural and mountain communities across Colorado, Nebraska, New Mexico and Wyoming.
We're gonna make it. We're gonna we got a plan to deliver, and that's that's the thing no matter what. Meteors, Godzilla, no matter what.
Elizabeth Schilling:Welcome to Western Watts, the podcast where Tri-State and our cooperative members explore what it takes to power the West. From reliability to wildfire mitigation, we dive into the energy issues that matter most to rural, agricultural, and mountain communities across Colorado, Nebraska, New Mexico, and Wyoming. We have Dwayne with us here today to talk about one of the most important pieces of our mission, reliability. The North American Electric Reliability Corporation or NERC says over half of North America is at risk for energy shortfalls in the next five to ten years. What are we doing about that?
Duane Highley:Reliability is first and foremost. And I think we now sit in a position where we can say our reliability metrics are unmatched in industry, and we can prove it with math. Right? And now we've got a state commission that has endorsed that methodology.
Elizabeth Schilling:So you have a unique view of how important reliability is and when we're planning for those worst case scenarios, what it needs to look like. As Tri-State look into the future, planning our resources, how do we factor in dealing with the worst of times?
Duane Highley:And that's a great way to say it because a lot of times, in the past, utilities did their resource planning for resource adequacy by just saying, take whatever my biggest load is for the year, add 12%, and we're good. And if everybody and, of course, when I started in this business four decades ago, the idea was if everybody did that, there'd always be enough for everybody. But that was in a world where almost all the power came from coal plants. And so that was just assuming that there's always gonna be one or two coal plants out of service, and if everybody has 12% excess, you're good. And then people started saying, maybe it should be 15%.
Duane Highley:And they came up with this other modeling scenario known as loss of load expectancy or loss of load probability, which is a statistical modeling, but it basically gives you the same answer, so everybody felt comfortable with it. I'm not really sure there was that much science behind it to start with, especially when it just kinda gives you the answer you expected to get anyway. And so I saw that and thought, that's a game. And I did some of that modeling in my career, and I thought, this is all backwards calculating to get the answer you want. And it didn't really seem like it solved the problem.
Duane Highley:And then we saw in storm Uri that absolutely didn't work. Storm Uri, severe winter storm, rolling blackouts, everybody had planned for 15% surplus, then why didn't that work? Because, actually, in severe weather situations, sometimes nothing works like you expect it to, especially wind. Wind doesn't blow when it's really cold or when it's really hot. You'll get this wind drought, not just on one system, but multiple states at a time.
Duane Highley:The planning construct of saying, I can just plan my little system by myself and assume that my neighbors will always have something to sell me, that's broken too in a stormy area. Our modeling now, what we call level two reliability, first of all, says we're not assuming we're buying anything from anybody else. Because probably on the worst day in the world, we can't. And then I also can't assume that solar's working because it might be a winter day when my loads peak at 7AM and 6PM. The sun's not shining.
Duane Highley:And it's probably a a really cold snap where the wind quits blowing. So I can't rely on that either. How am I gonna charge my batteries up? Even they're not something I can rely on that much because I've gotta have load go down at some point in the day to recharge the battery, and in the winter, that doesn't have have steady load all day long. So then that pushes you to say, I better have some fossil fuels in the mix.
Duane Highley:The modeling we did was a lot of detailed math to prove that's the case, that you just gotta have something you can push the button and run today. Now that doesn't mean by 2040, the world might not change. We might have some other resources that fix that problem. But as of today, that's what we need. The bottom line of all this is for us to make sure that for our members, Tri-State's gonna keep the lights on.
Duane Highley:Now I'm hopeful that other utilities follow our lead and do the same method, and I think there's momentum in that direction. But as of today, we can say the plans we're making for our members at the end of this decade and beyond are more reliable than what other utilities are planning for.
Julia Perry:I think people really don't understand when you're saying level two metrics that you guys have basically figured out if Godzilla is attacking during a blizzard as a meteor hits, will we be able to power our system? And that's to the level you're actually planning for.
Duane Highley:I think that is a beautiful metaphor, and I'm expecting to see that image at the annual meeting, the Godzilla, meteor and then Tri-State's logo, and we're better than Godzilla.
Julia Perry:Maybe we'll do a GIF.
Duane Highley:I can visualize it clearly right now.
Julia Perry:How would you say since you even started at Tri State? Because in my perspective, it's changed really quickly. How is the conversation around reliability and what that means? How has that changed?
Duane Highley:I think there's people who still don't get it, and we're still preaching this one. Because they're those that would just say we can do it all with, solar and batteries, I think that's a a a great ambition, but it's not a realistic one. Now maybe in 2040, it would. But between now and then, we gotta find a way to keep the lights on.
Julia Perry:Everything's off. All the phones are down. Godzilla is here.
Duane Highley:Godzilla is here.
Julia Perry:The employees on hamster wheels. Go.
Duane Highley:Hopefully, not hamster wheels, but we we're gonna make it. We're gonna we got a plan to deliver, and that's the thing no matter what. The meteors, Godzilla, no matter what.
Elizabeth Schilling:Yeah. In these kinds of scenarios, that's when reliability is most important, especially in our service territory where somebody could be left without heat and stranded in snow, or a more vulnerable population could be suffering in a heat wave. Electricity has become an essential service for a lot of people.
Duane Highley:My very first day on the job in what I consider my professional job was when I went to work as an intern for Associated Electric Cooperative. And so I went to work for that organization not even knowing what they did simply because I needed a summer job out of college. And the engineering manager sits me down on the first day on the job and says, I want you to understand something about this business. We work and these are the words he used. We work for the little old lady at the end of the line, which I know is an expression we often use, but he meant it.
Duane Highley:And I knew immediately I was part of something different and, to me, special because that's what we do. We work to make those people's lives better. I think it's something a lot of us bring to work with us every day.
Elizabeth Schilling:It's true. A lot of cooperative employees live and work in the communities they serve, so it's in everybody's best interest that everything's working. You're taking care of your neighbors. That's the mindset everybody has.
Duane Highley:That that is a key part, and I'm glad you mentioned that. So, yeah, in a small co op, any of our member co-ops, those are their neighbors they're working for, and they're gonna see them at the grocery store. They're gonna see them at church. So they wanna do a good job. Right?
Duane Highley:That's just not an anonymous customer to them. When you're facing your neighbor I remember when I got a call one morning from one of my fellow members of our church because it was Thanksgiving morning and her power went off, and she's like, how are you gonna get my power on? Because I've got my family coming over this afternoon. I gotta get this turkey cooked. So that's when it gets personal right.
Julia Perry:That's the ultimate power move calling up the CEO and complaining.
Duane Highley:And saying, when are you gonna get my power? You don't understand. My family's coming over this afternoon.
Elizabeth Schilling:Not only does the metaphorical little old lady at the end of the line need reliable power, but it also needs to be affordable. Is that a hard balance? Do you feel like it's pretty clear the direction you need to prioritize at any given point?
Duane Highley:I know the board thinks reliability is really important, and they think afford affordability is really important too. And while those two objectives are always in tension with one another, every day we're making a decision, am I gonna be more reliable or more affordable? Because those don't go together. They go opposite each other.
Duane Highley:And every decision you make then is, to me, filtered by if I'm standing in the boardroom and facing the members, how do they feel about it? Which again is what's so beautiful about the co-op model is we're facing the people whose money we're spending, and it keeps us all really honest and really aligned. Board comes together with such a diversity of background and yet almost always votes unanimously. However, within one or two dissenting votes, usually never more than that. And despite the difficulty of the issues we talk about in that boardroom, to me, that's amazing too, and they come together because they all care about reliability and affordability.
Duane Highley:So that's I don't know. I think it's just the authenticity of being with people and and respecting them for who they are and trying to help make their life better.
Elizabeth Schilling:Yeah. So we touched on reliable, affordable being the part of our mission. Flexibility has definitely ridden through as a theme in recent years. Can you talk to us a little more about what that means for our membership?
Duane Highley:Whenever I came into Tri-State that was such a big argument was members wanted more flexibility in their contract, and if they weren't couldn't get it, they were just gonna leave. Right? And we worked so hard to try and find a method that would work. I'm really happy to say now after all the work and several iterations of flexibility, we found this program, Bring Your Own Resource, which will allow a member to self-generate up to 40% of their needs locally. And I'm really proud that we're gonna have 300 megawatts in five separate projects serving 11 member systems under BYOR.
Duane Highley:And what is a success? We filed it at FERC and had it approved within sixty days because no one protested it. I think that's just again, everybody finally coming together, finding a common purpose in this flexibility and supporting it, even the members who aren't gonna participate in it supported it. And then it goes before FERC with no protest, gets approved in sixty days, and now we're gonna have members that are gonna be able to benefit from that.
Julia Perry:If 40 plus people can agree on it, it's probably gonna work.
Elizabeth Schilling:It feels like Tri-State's had a lot of success in relationship building lately, like the Bring Your Own Resource program, joining FERC, and joining a Regional Transmission Organization. All of that resulted from listening to what members actually needed.
Julia Perry:Utilities are moving so much faster that relationship building is becoming essential. Joining an RTO, getting NGO groups involved, we gotta move hard and fast, but you can't do that without building all these relationships. And that's what the grid is, and that's what a cooperative is.
Duane Highley:Yes. I think what you just said is the thesis of the book, The Speed of Trust. And you can only move as fast in an org in an organization as your stakeholders will trust you. And if you don't have trust, you can't do any of it. If we look at the members and look them in the eye every month, we're gonna work for what's in their best interest.
Duane Highley:We're gonna try and find what's the most cost effective thing we need to do and can do to properly protect our members and not overdo it. It's just because that's whose money we're spending. If you can find a way to save a dollar, you just saved that little old lady at the end of the line a dollar.
Elizabeth Schilling:How would you say the Tri-State leadership team is reacting overall to the rapid changes we're going through? Although it was a net positive, the process of joining FERC and RTO and incorporating member projects into our own resource plans sounds like a challenge.
Duane Highley:Everybody is just working together so well, and so they're willing to listen to each other. They're willing to help make each other better. I've never been more blessed to have such a strong leadership team than today, and they do that whether I'm in the room or not. And I'm just so blessed to have such a team that feels that way about each other, that they trust each other and they support each other mutually. I think they would all go to war for each other.
Duane Highley:And if there was a a bunch of enemies outside here, Godzilla and people with swords, they would all march out there together and just go slay it because they like kicking butt. They really like winning. And so I think that's really strong for our members is that we've got a team of people who are gonna stay with it. If we're all aligned together, and this is something that's just true of the co-op system in general, when you get an organization aligned behind a common purpose and a common objective, you're literally unstoppable.
Elizabeth Schilling:Thanks for tuning in to Western Watts. You can find us on Spotify, Apple Podcast, YouTube, or on our website at tristate.coop/wwpod. We'll catch you next time.