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KCEC Solar Plan March 2017
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Kit Carson Electric Cooperative, Inc.
Kit Carson Electric Cooperative (KCEC) was formed in 1944. KCEC serves customers in Taos,
Colfax and Rio Arriba Counties in North Central New Mexico. KCEC is a diversified
cooperative offering electric, propane and telecommunication services to its members. KCEC
currently serves approximately 29,000 electric members, 3,200 propane customers and
4,928 telecommunications customers. KCEC’s membership consists primarily of
residential and commercial customers.
KCEC operates an electric system of approximately 2,800 miles of overhead and
underground transmission and distribution lines. KCEC also operates a
telecommunications network consisting of approximately 2,500 miles of fiber-optic cable.
The telecommunications network is being connected to homes and businesses for basic
communications using the Internet. It will also assist in modernizing the regional electric
grid. Integrating telecommunications and electric networks will enable future electric
services like demand management and improve electrical reliability and efficiency.
KCEC Solar Plan March 2017
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Table of Contents
Executive Summary .................................................................................................................. 5 Introduction ............................................................................................................................... 8 Solar Plan Goals and Objectives .............................................................................................. 8 Solar Development Benefits ................................................................................................... 12 Strategy .................................................................................................................................. 16 Risks and Opportunities .......................................................................................................... 16
Risks ................................................................................................................................... 16 Opportunities ...................................................................................................................... 19
Interconnection Standards ...................................................................................................... 22 Strategic Partners ................................................................................................................... 22 KCEC Solar Assets ................................................................................................................. 24
Existing Locations and Solar Generation (2016) ................................................................ 24 Proposed Solar Project Priorities and Locations ................................................................. 26
Power Supply Impacts ............................................................................................................ 33 Base Assumptions .............................................................................................................. 33 Solar Production Effect on Transmission Costs .................................................................. 33 Solar Production Effect on Composite KCEC Rates ........................................................... 33 Overall Electric Rate Impact ............................................................................................... 34
Transmission Impacts ............................................................................................................. 34 Planning and Operational Requirements ............................................................................ 34 Transmission Fixed-Cost Impacts ....................................................................................... 35 Transmission Energy Losses Impacts ................................................................................ 35 Intermittent Solar Production-Following Requirements ....................................................... 36
Solar Power Export Options .................................................................................................... 36 Timelines................................................................................................................................. 37 Conclusions ............................................................................................................................ 37 – Appendix A – ........................................................................................................................ 39 - Appendix B - ......................................................................................................................... 43 1. Small Residential and Commercial Solar Arrays ................................................................. 43
KCEC Solar Plan March 2017
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Executive Summary – A Plan to Provide 100% Solar Energy on Sunny Days Kit Carson Electric Cooperative, Inc. (KCEC) and Guzman Renewable Energy Partners
(GREP) have entered into an agreement to develop 35 megawatts of solar arrays over
the next 6 years. Each array will be approximately 1-MW and will be connected to the
KCEC distribution grid. GREP is KCEC’s wholesale energy provider and will own the
arrays, and KCEC will execute Purchase Power Agreements for the energy they produce.
By the end of the project every KCEC member will be powered by 100% solar energy on
sunny days.
This document presents the six-year plan for solar power development beginning in 2017.
The schedule for developing the arrays will take advantage of declining prices and the
Federal Investment Tax Credit (ITC) which will expire in 2023. During the final years of
the project battery storage will be added to new arrays to store energy generated in excess
of KCEC’s load during the day.
Local generation of energy connected to Kit Carson’s distribution grid is a central feature
of this plan. It will produce benefits ranging from new construction and maintenance jobs,
local property tax revenues, long-term stability in energy prices, and savings on
transmission and distribution equipment. By the project’s completion locally produced
clean solar energy will be available to every Kit Carson member during day-light hours.
KCEC Solar Project – Table I Year 2017 2018 2019 2020 2021 2022
1-Megawatt Projects
7 4 4 4 8 8
KCEC Total Solar PV – Table II Year 2017 2018 2019 2020 2021 2022
Total Solar Installed
11 MW (5 Existing
plus 6 new MWs)
14 MW 17 MW 20 MW 27 MW 35 MW
KCEC Solar Plan March 2017
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Solar photovoltaic (PV) facilities are easy to build and bring new power online quickly.
They are also easy to maintain and can be readily expanded with more solar panels and
battery storage. As the cost of batteries declines and battery systems are added to solar
arrays, power can be readily dispatched during evenings and on cloudy days.
The project is designed to be flexible enough to take advantage of new technology and
regulatory developments. Continued improvements in energy efficiency may be offset by
new demand from population growth, in-migration of businesses, growth in Electric
Vehicles (EVs), and increased market share in home heating and cooking. That would
allow more arrays to fill the additional load.
By partnering with Guzman Renewable Energy Partners (GREP), the Solar Project will
not consist of debt for KCEC. GREP and its partners will finance and manage the projects.
KCEC will commit to Purchase Power Agreements that guarantee solar energy at a price
competitive with the fossil fuel prices. The term of the PPAs will be 20 years thereby
guaranteeing stable, low cost clean energy to power our community for decades.
Local economic development is another benefit of the Solar Project. The availability of
renewable energy is a selling-point for recruiting light industry and environmentally
conscious businesses. Also, if available in sufficient quantities, excess power generation
from solar arrays can be sold to customers elsewhere on the regional grid.
Solar power provides many environmental benefits. It is largely free of greenhouse gases
and other polluting emissions. Its land-use footprint is small by comparison with other
power sources. Solar power requires very little water, an important plus in our arid region.
Solar power development places KCEC in a leadership position in local, regional and
national partnerships. KCEC and its strategic partners influence regional trends in
renewable energy development, policy, legal issues, and environmental care.
KCEC Solar Plan March 2017
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In developing this plan KCEC reviewed several development options. (See Appendix A
for a discussion.) These include small residential and commercial arrays, community solar
arrays, and utility-scale arrays in three increasing size ranges. We determined that arrays
of about 1.0 MW represent the best solution for our situation. Such arrays avoid costly
system upgrades and technical issues. Very importantly, they avoid conflicts with entities
having oversight of regional electric issues such as load balancing. These arrays are less
expensive to install and operate than an equivalent collection of smaller arrays. They can
adapt to battery energy storage which will augment KCEC’s power supply as storage costs
decline. Also, they can be located near points of use in the large area serviced by KCEC.
KCEC assessed a host of risks and opportunities for solar power development. Technical
risks such as system reliability and stability will be assessed using a system impact study.
Financial risks such as changes to tax incentives can be avoided by completing planned
arrays before 2022. Opportunities include decreasing reliance on fossil fuels thereby
contributing to a healthier environment, establishing stable and predictable electric rates,
and marketing our region to businesses seeking clean energy supplies.
KCEC has experience with solar arrays of this size. Our first solar development was in
2005. The plan describes KCEC’s current assets. It lists assumptions including the effects
of solar production on transmission costs, and the impact on electric rates. The plan
assesses impacts on regional electric transmission delivery, costs, line losses, and solar
power intermittency issues. KCEC acknowledges that the future may include local
construction of much larger arrays designed to generate energy for customers elsewhere
on the Western Grid. Nonetheless, the KCEC Solar Plan is the cornerstone for supplying
clean, locally produced solar energy to our members.
Kit Carson Electric Cooperative urges members to review and comment on the plan. The
plan offers a major transformation to local control of renewable energy generation and
distribution. It offers access to clean energy for every member, with predictable and stable
electric rates far into the future.
KCEC Solar Plan March 2017
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Please take the time to study the Kit Carson Electric Solar Deployment Plan 2017. We welcome your comments at:
Kit Carson Electric Cooperative, Inc.
Attn: Luis A. Reyes, CEO
Mailing Address: P.O. Box 578 • Taos, NM 87571
Physical Address:
118 Cruz Alta Road • Taos, NM 87571
Telephone: 575 758-2258
1-800 688-6780
KCEC Solar Plan March 2017
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Introduction
This KCEC Solar Plan outlines the actions required to meet the goal of providing 100% solar
energy for the peak summer daytime electric demands of Kit Carson Electric Cooperative
(KCEC) members by 2022. The plan identifies several alternative strategies and deployment
options to meet this goal and recommends a clear course of action.
The Solar Plan calls for construction of 35 one megawatt solar arrays throughout the KCEC
service area. Each array will occupy around six acres and will be tied directly to the KCEC
distribution grid. This level of construction needs widespread community support, and
community participation in siting.
KCEC solicits member input to the plan throughout its development. Community input will
ensure transparency and produce results that meet community needs. A series of public
meetings and other outreach efforts are being organized with local governments, businesses,
environmental organizations and citizens to provide input for the project.
KCEC and its strategic partners recognize longer-term needs for renewable energy for heating,
cooling, and transportation. To this end, this plan lays a foundation to go beyond installing
multiple small solar arrays. The plan focuses on the near-term, but it offers flexibility in selecting
avenues to the future.
KCEC Solar Plan March 2017
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Solar Plan Goals and Objectives
1) Installation of thirty-five 1 MW solar arrays by 2022 sited around the Kit Carson Service Area providing 100% of peak demand during the day year-round. KCEC plans to
work with partners to develop several solar arrays each year beginning in 2017. Each array will
produce about 1 megawatts (MW) of power during sunny days. During the longer days of
summer, the arrays will produce more electric than they will during the shorter days of winter.
For our region, the solar generation output is an average of 6.5 hours per day. Since we average
more than 300 low humidity days of sunshine yearly, the output from our arrays will be
outstanding both in quality and quantity.
Kit Carson currently operates on a year-round average electrical load of about 36 megawatts
(MW). Lowest demand of less than 30 MW occurs during summer. Peak demand during the
summer is around 35 MWs. Highest demand of more than 60 MW occurs during winter evening
hours in late December – early January (Figure I, p. 11).
KCEC currently owns or controls about 5 MW of solar facilities. This means KCEC would need
to contract for building an additional 35 MW to meet its solar deployment goals. This number
translates into constructing an average of about 6 MW per year for the next six years. The
actual schedule of development will vary depending on a variety of circumstances.
2) Construction with no KCEC debt accomplished with Purchase Power Agreements (PPAs) from development partners. KCEC has entered into an agreement with GREP to
develop the 35 arrays. GREP will own the arrays and KCEC will execute Power Purchase
Agreements (PPAs) for the energy they produce. The term of the PPAs will be in the range of
20 to 25 years. This ensures that the cost of solar electric delivered will not change during that
time. KCEC and GREP are currently working on projects scheduled for 2017.
3) PPAs at or below wholesale price from coal and gas generation (4 to 5 cents /kWh) providing stable energy prices for 20 to 25 years. Current PPA proposals for solar arrays
are in the mid-4 to 5 cents per kWh range. The price trends for solar are on a steep downward
KCEC Solar Plan March 2017
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trend, so meeting the goal of acquiring solar power at or below fossil fuel prices seems assured.
Accounting for stand-by power and storage means that blended prices based on solar
deployment in the 35 MWh range will meet this goal.
4) Minimum upgrades to the KCEC distribution grid, and 5) Improved system reliability. The array size of 1 MW meets four strategic requirements.
• First, these arrays have a land-use footprint suitable for serving neighborhoods and
communities of approximately 300 homes.
• Second, arrays sited throughout KCEC’s service area will better distribute solar energy
which improves system reliability. The widespread array distribution will also ensure that
all KCEC customers – regardless of income or other factors – have access to solar
energy.
• Third, installing these arrays in appropriate locations requires little in the way of costly
electric distribution system upgrades.
• Fourth, installing arrays larger than 1 MW would require oversight and approvals by
Public Service Company of New Mexico (PNM) and Tri-State Generation and
Transmission Association, Inc. (Tri-State) because these entities own and govern the
larger electric transmission grid to which KCEC is connected.
6) Flexible development schedule to take advantage of opportunities as they present themselves. The plan prioritizes installing many small solar arrays throughout the KCEC
service area. However, there may be other opportunities for increasing the amounts of
renewable energy provided to KCEC customers. The plan therefore discusses options including
residential and small commercial solar arrays, community solar arrays, utility-scale solar arrays,
and energy storage.
7) Set-asides at sites for future battery storage installations. Battery grid storage is also
on steeply declining price curve. It has the best potential for storing large amounts of energy
and addressing intermittency related issues. Each solar array site will include an area set aside
for storage facilities. Current storage facilities are housed in 40-60 foot trailers and provide
about 1 MWh each.
KCEC Solar Plan March 2017
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8) Community input on siting and environmental impact. For the past several years, KCEC
has enlisted advice and support from a network of stakeholders. The network includes Guzman
Renewable Energy Partners (GREP), Rocky Mountain Institute, New Mexico Rural Electric
Cooperative Association, National Rural Electric Cooperative Association, Renewable Taos,
Inc., and twelve county, town, village and tribal governments. The community organizations in
this network with input from local environmental groups will help guide siting and any technology
issues that arise during the project.
9) Low to no water requirements. Solar PV Arrays have virtually zero water requirements
and will displace fossil-fuel generation that requires massive water resources.
Kit Carson System Load and Peak Demand
Figure I – Kit Carson Electric Cooperative Total System Electric Consumption in
Megawatt-Hours (MWh)
KCEC Solar Plan March 2017
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Caption: During 2015, KCEC’s total system electric supplied to our customers ranged from a
low of about 19,000 megawatt-hours (MWh) in September to a high of more than 32,600 MWh
in December. The shape of this curve is typical of KCEC’s electric supplied over many years.
Figure II – Kit Carson Electric Cooperative 2015 Peak Electric Demand in Megawatts (MW)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Total System MWh - 2015
Total
KCEC Solar Plan March 2017
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59.754
49.953
47.79
36.191
35.366 35.561
35.094
35.271
33.366
37.937
50.424
60.144
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0Kit Carson Demand (MW)
KCEC Solar Plan March 2017
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Caption: During 2015, KCEC’s peak electric demand ranged from a low of 33.4 MW in early
September to a high of 60.1 megawatts in late December. The shape of this curve is typical of
KCEC’s electric demand experience over many years.
KCEC Solar Plan March 2017
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Solar Development Benefits
KCEC’s plan for solar development derives in part from our member’s strong support
for a transition to cleaner energy. The plan will also produce good financial returns for the
Cooperative and members. Fortunately, solar power development has many associated
benefits and opportunities.
1) Clean solar energy will be cheaper than energy generated by fossil fuel combustion before the project is completed. KCEC is building solar arrays since
they are now cost competitive with fossil fuels, even without considering the external
benefits of clean energy. For example, the total installed costs of solar arrays have
fallen by as much as 70 percent since 2009 and prices are continuing to fall rapidly.
The economics of solar create opportunities for growth and profit in many areas of local
society.
2) Local energy generation retains tax revenues and improves system reliability .
The solar arrays in this plan will be built within the KCEC service area and connected
directly to the Kit Carson distribution grid. Property, business and other taxes may be
retained within the community. Distributed energy resources also have technical
benefits including lowering the frequency and impact of outages.
3) Stable energy prices for members for 20 to 25 years. Solar benefits to our
citizens include stable and predictable energy costs. There are no marginal costs
associated with solar energy. Sunlight is free, so solar energy is not subject to market
variations in commodity prices for fuels. PPAs for solar are written for 20 to 25 years
with fixed per kWh prices.
4) Addition of new construction and maintenance jobs. The solar arrays will be
constructed using the local work force as much as possible. There will be maintenance
jobs attached to the arrays. Revenues for new employment have a multiplier effect in
the local economy and will lead to additional economic development.
KCEC Solar Plan March 2017
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5) Leadership in grid battery storage. Kit Carson will also deploy battery storage
along with the solar arrays especially as battery prices continue their rapid decline in
price. Partnership with Sandia National Laboratory and their battery storage initiative
is being explored. Space for battery storage will be set aside at each site. This
technology is the ideal complement to solar energy and will provide clean energy when
the sun is not shining.
6) Clean energy for all Kit Carson members regardless of economic status. As
solar becomes a greater part of KCEC’s energy mix, all Kit Carson members --
regardless of income level – will receive renewable energy. Each advantage of clean
solar energy will benefit every Kit Carson member.
7) Stronger relationships with clean energy partners. A further benefit of KCEC’s
solar development planning is strengthening old and creating new partnerships locally
and regionally. Those include GREP, Rocky Mountain Institute (RMI), and local
environmental groups and solar companies. KCEC and other New Mexico Rural
Electric Cooperatives (RECs), in collaboration with RMI, are engaged in aggregate
purchasing of smaller solar arrays. This arrangement reduces unit costs to about half
of what RECs would pay if they purchased the arrays individually.
8) Renewable energy leadership in rural America. KCEC’s leadership in promoting
and developing solar power has attracted the attention of RECs and other small utilities
throughout the country. Kit Carson has received national recognition, and it is providing
a model that rural cooperatives can follow. There are many complex technical, legal,
and regulatory issues that Kit Carson has addressed in the process. While solutions
Kit Carson arrives at may not be easily duplicated by other rural utilities, most of the
problems Kit Carson has overcome are common ones.
9) Mastery of technical, financial, and business issues involved with battery electric storage and dispatch. Batteries tied to the grid are a promising long-term
solution to the problem of intermittency shared by solar and wind energy. Managing
storage and dispatch of energy from battery storage will resolve several issues
including excess energy from solar arrays and limiting peak charges for periods of high
KCEC Solar Plan March 2017
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demand. Learning how to effectively use batteries tied to the grid will allow Kit Carson
to serve its members efficiently at low cost.
10) A boost to local economic development. More and more businesses are
demanding that all their energy come from solar and wind generators. Kit Carson’s
solar plan and broadband network will make North Central New Mexico a highly
attractive location for energy conscious business. Clean energy and broadband attract
low-impact, light industries such as information technology (IT) companies. Our
infrastructure and our beautiful landscape and climate should be aggressively
advertised by all local governments as inducements to businesses.
11) Quick, flexible response to new demands and opportunities. Solar photovoltaic
(PV) plants are not as complex to build as other types of power plants. They can be built very
quickly and bring new power online within a few months of the start of construction. Depending
upon siting, solar plants can be readily expanded to meet new demand. Completed solar
projects are attractive for investors seeking dependable long-term cash flows.
12) A clean transportation system based on electric vehicles charged by solar energy. As electric vehicles (EVs) become more economical and widely used, they
can be charged using solar energy. The large EV batteries can be charged with excess
energy from our solar arrays during the day and accessed during periods of peak
demand in the evening to provide lighting and home energy. This may turn out to be
the cheapest form of storage if the percentage of EVs grows rapidly. EVs plus solar
plus access to EVs for home energy would be a powerful combination.
13) Numerous health and environmental benefits. Solar energy has many environ-
mental benefits including offsetting demand for fossil fuel and nuclear power. KCEC
currently derives more than 90 percent of its electrical power from coal- and natural-
gas fired power plants in the Four Corners region of New Mexico. Solar photovoltaic
arrays produce no greenhouse gases and other polluting emissions while producing
electric. The land-use footprint of solar power is extremely small when compared with
the land uses required for mining, transporting, storing and burning fossil fuels. Solar
KCEC Solar Plan March 2017
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PV notably requires very little water, with water consumption almost zero gallons per
megawatt-hour (gal/MWh) compared with about 600 to 800 gal/MWh for coal, natural
gas and nuclear power plants.
KCEC Solar Plan March 2017
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Strategy Beginning in 2017, KCEC intends to place new solar arrays throughout its service area
with a focus on close proximity to existing electrical substations. This will offset the
need for substantial and costly system upgrades such as new line connections to the
arrays or hardware to manage voltage issues. KCEC has determined that widely
distributing these new facilities will enhance overall system reliability. Also, this is a first
step to ensuring that all parts of the service area are served in part by solar energy.
KCEC is taking advantage of trends favoring continued growth of solar power in sunny
New Mexico. These include falling costs, improving technology, environmental care,
and policies favoring renewable energy.
KCEC and its strategic partners see solar PV becoming one of the cheapest and most
environmentally friendly sources of electrical power. This plan focuses on bringing
these benefits and opportunities to our community.
KCEC Solar Plan March 2017
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Risks and Opportunities
There are risks and opportunities associated with all elements of this plan. KCEC’s
goals are to negate or mitigate impacts of risks, and optimize or enhance the
opportunities.
Risks
1) Changes to clean energy incentives. The renewable energy investment tax credit
(ITC) reduction in 2023 means that investment in solar facilities will lose some padding.
The ITC rate will remain at 20% or above throughout the KCEC Solar Project. This risk
is substantially mitigated by the steady reduction in solar prices, around 50% reduction
every 2-1/2 years.
Federal Investment Tax Schedule – Table III
Federal Tax Credit* Year 30% Present - 2019
22% 2020
20% 2021 - 2022
10% 2023 - indefinite *https://energy.gov/savings/business-energy-investment-tax-credit-itc
2) Disruption of Distribution and Transmission Grids. There will be potential
impacts on KCEC’s distribution network at and around the points where concentrations
of solar arrays are being installed. PNM and Tri-State might require system upgrades
or protection schemes at some cost to KCEC. We can mitigate this risk through formal
System Impact Study.
KCEC Solar Plan March 2017
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3) Intermittency Related Issues. Fast-moving cloud cover may cause brief
interruptions in energy flow from solar arrays. The Kit Carson design with many 1-MW
arrays spread over a very large service area will mitigate this issue. Also, grid battery
storage will counteract this problem. Lengthy periods of cloud cover, although rare in
our area, require another solution. Effective forecasting is the primary method for
limiting the impact of this problem. Weather forecasting allows GREP, KCEC’S
wholesale provider and partner in the Solar Project, to reserve backup power at
reasonable prices.
GREP will adjust its hourly schedules to deliver power during periods of intermittent
solar power production. GREP has the option to procure power as needed in the short-
term market, or pre-purchase power in the long-term market. GREP and KCEC will
work together to limit stand-by expenses.
GREP likely has established financial hedges to cover the energy requirements of its
power supply contract with KCEC. The breakdown of these hedges could produce
either a cost or a benefit to GREP depending upon market conditions.
4) Increases in Stand-by and Ramping Charges, and 5) Increases in Line-loss and Transport Charges. Solar energy generated locally will not be subject to transmission
line losses for either PNM or Tri-State. However, any solar installations over 1-MW will
be included in the calculation for peak system loads on the transmission system.
Distribution system peak loads coincident with transmission system peak loads are
subject to Network Integration Transmission Service (NITS) charges for PNM. All
installations are required to provide meter data for inclusion in Tri-State’s system
coincident peak calculation. Regardless of Kit Carson’s transmission load,
transmission companies must cover their fixed costs. This means that we may expect
additional charges as our load declines.
To avoid substantial increases in transmission charges, KCEC desires to purchase Tri-
State’s 345-kV transmission line running from the Ojo Caliente Electrical Substation to
the Los Cordovas Electrical Substation (figure XX). When this purchase is complete,
the Tri-State NITS Agreement will be cancelled and replaced by a small capacity Point
KCEC Solar Plan March 2017
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to Point (P2P) transmission agreement. KCEC will then need to ensure that it reserves
and schedules use of the Ojo Caliente to Los Cordovas line within the limits of the P2P
agreement.
Each of the risks described above can be mitigated with effective solar energy
storage. Estimating the costs of these risks will help identify savings associated with
energy storage.
Opportunities
1) Low-cost Solar Locked in for 20 Years. The Solar Plan will solidify more than 1/3
of Kit Carson’s power supply at $45 per Megawatt Hour for 25 years. That is below the
current wholesale price for Coal-fired or Natural Gas generation. There is a realistic
chance that this block of KCEC’s power supply will come in at an even better margin
against power from fossil fuel generation. The economic opportunity is complemented
by solar’s small footprint and extremely light water demands. Moreover, by displacing
fossil fuel generation, solar contributes to community health by not releasing
greenhouse gases that harm the climate and result in respiratory illness.
2) Capitalizing on North Central New Mexico’s Extraordinary Solar Resource .
The high average sunshine and altitude of North Central New Mexico means that the
power output of solar arrays is extremely high. The Solar Plan arrays will produce
approximately 100% of the day-time electrical load in the KCEC service area. As the
Solar Project nears completion excess energy can be stored in batteries and
dispatched in the evening or on cloudy days. The Solar Project lays a solid foundation
for powering our community with clean energy. Toward the end of the project new
phases focused on batteries, Electric Vehicles, and generation of energy for other
areas may be feasible.
3) Attracting Environmentally Conscious Enterprises. The Solar Project will
become a core component of the identity of our broader community. A clean energy
KCEC Solar Plan March 2017
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grid and a world class fiber-optic communication network can help attract
environmentally conscious businesses and non-profits to our beautiful community. To
take full advantage of this opportunity the governments of local communities should
cooperate with KCEC to promote the progressive image of the Solar Project. The
economics of solar energy are also favorable, as solar PV is quickly becoming the
lowest cost of all available power sources. KCEC can market itself as a cooperative
that can service businesses seeking renewable energy supplies, a growing trend
among environmentally conscious businesses.
4) Purchase and Upgrade of the Los Cordovas to Ojo Caliente 345kv Transmission Line. KCEC’s desire to facilitate the purchase of the Ojo Caliente-Los
Cordovas 345-kV transmission line would open a potential for large-scale solar arrays
and sale of the power they generate to areas connected to the Western grid. Upgrading
the transmission line and facilitating the interconnection of solar generation facilities
might open an entirely new opportunity for local economic development.
5) Reducing Transmission Costs from the Black Lake Substation. Adding
significant solar power generation and energy storage in areas served by the Black
Lake Electrical Substation can provide important benefits. A firm solar energy resource
in the Black Lake area would reduce the amounts of energy to as little as 10% of total
energy transmitted from Hernandez to Black Lake. Under a P2P agreement with the
owner, KCEC could thereby reduce its transmission costs by as much as 50 percent
overall.
6) Acquisition of Solar Arrays with Lower lnterest Rates. The federal Investment
Tax Credit (ITC) for solar installations is significantly reduced by 2023 (Table III). This
means all solar development for which KCEC commits under Power Purchase
Agreements (PPAs) prior to 2023 will enjoy the most significant ITC benefit embedded
within the agreements. Additionally, the PPAs can be structured to include a project
purchase option after 2023. To the extent that KCEC’s borrowing rate is lower than the
solar plant developer’s, additional cost savings become available for the life of the
projects.
KCEC Solar Plan March 2017
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Declining costs of solar PV will offset reductions in the ITC. These costs are cut in half
every 2 to 3 years. If this trend continues. the cost of solar arrays in 2020 will be half
today’s costs and the cost in 2022 will be half the 2020 cost.
7) Balancing Declining Costs Against Reductions in the ITC. The staged
reductions in the ITC will pressure developers to reduce other costs on the one hand.
On the other the remarkable decline in Solar PV and Battery Storage costs will allow
reductions in the wholesale price of solar power. GREP and KCEC will work with their
partners to optimize this financial balancing act.
KCEC Solar Plan March 2017
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Interconnection Standards
KCEC will use interconnection standards currently on file with the New Mexico Public
Regulation Commission (NMPRC). KCEC will follow all applicable codes specified by
the Rural Utilities Service (RUS), National Electric Code (NEC), and others that apply
to different types and sizes of interconnections. To meet code requirements, KCEC will
conduct system impact studies, load impact studies, and system improvement studies
based on the size and locations of solar arrays.
Strategic Partners
North Central New Mexico benefits from a network of community stakeholders that has
been in existence for many years. These stakeholders demonstrate alliances and
partnerships with other energy, sustainability and economic development stakeholders
throughout New Mexico and the nation. These stakeholders represent the most
effective strategic partners to drive the growth of solar and other renewable energy in
KCEC’s service territory.
Our strategic partners provide a variety of functions and services relevant to KCEC’s
Solar Deployment Plan:
• Guzman Renewable Energy Partners (GREP) is KCEC’s current wholesale
electric supplier, and will finance and own all of KCEC’s solar plan installations.
GREP will act as partner in the Solar Project.
• The Rocky Mountain Institute (RMI) is an independent, non-partisan nonprofit that
advances market-based solutions, engaging businesses, communities, and institutions
to cost-effectively shift to energy efficiency and renewables.
• The New Mexico Rural Electric Cooperative Association (NMRECA) is a
statewide association responsible for legislative, regulatory, and policy issues
affecting renewable energy development.
KCEC Solar Plan March 2017
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• The National Rural Electric Cooperative Association (NRECA) represents
Rural Electric Cooperatives (RECs) nationwide for legislative, regulatory, and
policy issues affecting renewable energy development.
• Renewable Taos, Inc. is a regional nonprofit targeting 100 percent renewable
energy for KCEC’s service area and New Mexico.
• Local Governments Local governments in the KCEC service area typically operate solar power
generation facilities, mandate energy-efficient government buildings, have solar
installations for schools, and/or have energy-efficiency building codes for
business and residential construction.
• Town of Taos
• Town of Red River
• Village of Questa
• Village of Eagle Nest
• Village of Angel Fire
• Village of Taos Ski Valley
• Taos County
• Rio Arriba County
• Colfax County
• Taos Pueblo and Picuris Pueblos are independent governments that
may allow solar development on their lands.
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KCEC Solar Assets
Existing Locations and Solar Generation (2016) KCEC has been involved in solar facility development since 2005. KCEC currently
owns and operates several facilities in its service area. They include – Amalia I, a 1.5
MW array in Northern Taos County; Questa Chevron, a 1.25 MW array near Questa;
Blue Sky Energy, a 1.5 MW array on the North side of US 64 near the Taos Airport;
KTAO Radio, a 43 kW array on highway 150 near the intersection with US 64 and NM
522; 100 kW array covering the parking lot of the KCEC Headquarters; Town of Taos
Eco Park, a 79 kW array on Salazar Road; and, the UNM Taos Array, a 500 kW array
on the UNM Taos Campus. See Figure I on page 25.
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Figure 3 – Kit Carson Solar Arrays
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Proposed Solar Project Priorities and Locations
The plan calls for construction of 7 arrays during 2017. The projects being
considered for this year include the following.
1. Picuris Pueblo Solar Array – 1 MW
2. Village of Angel Fire Waste Water Treatment Facility
3. Eagle Nest Lake
4. Tres Piedras Solar Array
5. Tarleton Solar Array
6. Town of Taos Solar
Each of the projects is described below:
1) Picuris Pueblo Solar Array. Picuris Pueblo is a Northern New Mexico Indian Pueblo nestled
in a setting of serene beauty in what is known as the “Hidden Valley” of the Sangre de Christo
Mountains in Northern New Mexico. It is located 60 miles north of Santa Fe and 24 miles
southeast of Taos on Highway 76. Picuris is proposing a 1 MW solar array in the Vadito, New
Mexico area approximately 1 mile north of the Kit Carson Electric substation (Penasco
Substation) with a capacity of 7.5 MVA. The interconnection will be connected via a 3 phase
25kV underground feeder that will connect to an existing 3 phase overhead electric lines 25kV.
The underground conductor is being proposed to be 1/0 URD and the existing overhead
conductor is 477 mcm. There will also be fiber connectivity at both at the 1 MW site and
Penasco Substation both for monitoring and control. Picuris Pueblo own the property. This
array will be designed with the capability of storage integration in the future.
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KCEC Solar Plan March 2017
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2) Village of Angel Fire Waste Water Treatment Facility. This project involves
the Village of Angel Fire which owns the property. It is a Brownfield to Greenfield
project as the land adjacent to the waste water treatment plant cannot be used
for any other purpose to our knowledge without some remediation work. The
location is approximately 1 mile east of a Kit Carson Electric Substation (Angel
Fire Substation) with a capacity of 20 MVA. The interconnection will occur at the
property located at the waste water treatment plant and will be 1/0 12.5 kV 3
phase underground feeder that will interconnect into a 1/0 12.5 kV 3 phase
overhead electric feeder. The project will be a 1 MW solar array may be converted
community solar and will be have a set-aside for battery storage.
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KCEC Solar Plan March 2017
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3) Eagle Nest Lake. This project includes a third party solar developer and a private property
owner in close proximity of the Eagle Nest Lake. The location is approximately ½ mile north of
a Kit Carson Electric Substation (Eagle Nest Substation) with a capacity of 7.5 MVA. The
Interconnection will be a 1/0 15kV 3 phase underground electric feeder which will connect to a
#2 15kV 3 phase overhead electric feeder. The project will be a 1 MW solar array. This array
will be designed with the capability of storage integration in the future.
4) Tres Piedras Solar Array. This project involves a private property owner in Tres Piedras,
New Mexico located 40 miles west of Taos. It is located approximately 1,5 miles south of a Kit
Carson Electric Substation (No Agua Substation) with a capacity of 7.5 MVA. The
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Interconnection will be a 1/0 15kV 3 phase underground electric feeder which will connect to a
#2 15kV 3 phase overhead electric feeder. The project will be a 1 MW solar array. This array
will be designed with the capability of storage integration in the future.
5) Tarleton Solar Array. This is a project involves a private owner. The location is
approximately 2.5 mile south of a Kit Carson Electric Substation (Los Cordovas #1 Substation)
with a capacity of 20 MVA. The interconnection will occur at the private property located at the
solar facility and will be 1/0 24.94 kV 3 phase underground feeder that will interconnect into a
1/0 24.94 kV 3 phase overhead electric feeder. The project will be a 1.2 MW and 1.3 MW solar
array. This array will be designed with the capability of storage integration in the future.
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6) Town of Taos Solar. This project involves the Town of Taos which owns the property. The
location is approximately 1 mile south of a Kit Carson Electric Substation (Los Cordovas #1
Substation) with a capacity of 20 MVA. The interconnection will occur at the property located
at the waste water treatment plant and will be 1/0 24.94 kV 3 phase underground feeder that
will interconnect into a 1/0 24.94 kV 3 phase overhead electric feeder. The project will be a 1
MW solar array. This array will be designed with the capability of storage integration in the
future.
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KCEC Solar Plan March 2017
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Power Supply Impacts
Base Assumptions KCEC used its electrical load forecast of October 2016. This forecast provided
slightly lower load than that originally used as the basis for developing Power
Purchase Agreements (PPAs). The analysis assumed solar resources could be
procured at $45/MWh under a 25-year power supply contract. Solar energy was
assumed to be available 25 percent of annual daylight hours. Solar energy output
was computed for 10-MW, 20-MW and 30-MW implementation scenarios.
Solar Production Effect on Transmission Costs Transmission costs are only affected by the amount by which solar production would
reduce transmission losses. Whereas there is a rate benefit to reducing transmission
losses, this benefit is minor, with a savings of less than $0.20 per MWh on an annual
basis.
Solar Production Effect on Composite KCEC Rates Solar production results in a beneficial impact on KCEC’s blended PPA and solar
resource costs. This rate reduction is more pronounced in years when the solar rate is
less than the PPA rate. Based on a ramped implementation schedule or “true-up”
mechanism, rate impacts are negligible in the first few years, but rates are reduced by
up to $4 per MWh in the 6th year of the PPA.
Overall Electric Rate Impact Generally, electric rate reductions resulting from solar production offset rate increases
as a result of the PPA true-up mechanism. This results in negligible impacts on
composite rates.
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Transmission Impacts Planning and Operational Requirements KCEC is obligated by industry reliability standards to coordinate any generation
resource additions with adjacent transmission providers. KCEC’s power supply is
delivered by two sequential electric providers, PNM and Tri-State. Delivery structures
are referred to as Network Integration Transmission Service Agreements (NITSA). The
coordination requirement is applicable to both the planning and operational phases of
any new generation resource, including solar.
During the planning phase, KCEC will be required to invite participation by PNM and
Tri-State in KCEC’s formal system impact studies. PNM and Tri-State will not
participate in system assessments if total KCEC solar production is relatively low
compared to total load. However, as total solar production begins to approach KCEC’s
hourly load, PNM and Tri-State would likely participate in the interconnection studies.
They would want to ensure solar production would not negatively affect PNM and Tri-
State facilities during electrical outages. Such outages could impose flow of solar
power into these facilities. KCEC also has contractual commitments to provide its
system impact study reports to PNM and Tri-State regardless of their participation in
the studies.
During the operational phase of a new solar facility, KCEC is obligated to provide real-
time and/or after-the-fact production data to PNM and Tri-State. Data recording devices
and telecommunications requirements affect the solar facility costs. PNM and Tri-State
will use the data to determine the cost of energy they deliver to KCEC. Both PNM and
Tri-State require real-time solar production data for each solar facility rated at 1 MW or
greater for system reliability and safety monitoring.
Transmission Fixed-Cost Impacts
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KCEC is provided NITSA energy delivery service that is regulated by Federal Energy
Regulatory Commission (FERC) policy. Fundamentally, NITSA service charges are
based on the amount of electric needed for stand-by readiness to be transmitted to
customers. This readiness allows for conditions when solar facilities interconnected to
the KCEC distribution system are unavailable. Consequently, additions of solar
facilities will not affect KCEC’s transmissions cost obligations. PNM and Tri-State will
use solar production data recorded during the billing period to add to the billing unit
recorded by transmission delivery meters, which is consistent with FERC policy.
PNM has a self-imposed restriction to add solar production to the transmission billing
unit when the solar facility is designed as 1 MW or larger. This restriction potentially
reduces KCEC’s transmission costs. Tri-State imposes data reporting requirements on
any solar facility interconnected to the KCEC distribution system. Data from facilities
rated at less than 1 MW can be provided after the billing period.
Transmission Energy Losses Impacts
KCEC is subject to an energy loss charge based on percentage of energy delivered
across PNM and Tri-State systems. Solar production would reduce the energy delivery
requirements, thereby reducing energy loss charges as described under Power Supply
Impacts (page 34.)
Intermittent Solar Production-Following Requirements
The North American Electric Reliability Council (NERC) requires the local Balancing
Authority (BA) to maintain a zero-balance energy exchange between adjoining BAs to
facilitate system reliability. KCEC is a utility in the PNM BA. PNM is authorized to
require KCEC’s power supplier, Guzman Renewable Energy Partners (GREP), to
maintain small hourly deviations in scheduled-to-actual energy delivery to meet
KCEC’s load. As the BA, PNM is allowed to charge for any hourly deviations. The BA
is ultimately responsible for maintaining its energy balance obligations. Balancing
requirements impose additional costs on the BA if a utility within its purview is not in
KCEC Solar Plan March 2017
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hourly compliance. Currently, GREP is responsible for any energy imbalance costs
charged by PNM. Increasing magnitudes of solar production will create higher cost
exposure to GREP due to an increasing difficulty in maintaining scheduled-to-actual
energy balances. As described in the Power Supply Impacts section (p. 34), GREP will
require compensation for this additional risk to energy imbalance charges.
Solar Power Export Options The KCEC Solar Plan contemplates production levels approximating 2015 summer
average daily electric load. Realizing this production level creates a potential for
exceeding KCEC’s service area load. By FERC policy, NITSA arrangements only
provide for delivery of resources to meet load. Therefore, any solar production in
excess of KCEC’s demand would need to be managed through alternative mechanisms.
These include introduction of storage, acquisition of transmission capacity to export
excess power, acquisition of customers for excess power sales, and managed
reduction of solar production.
Timelines
The KCEC Solar Project is scheduled for six years beginning in 2017. A total of around 35 1-
Megawatt Solar Arrays will be installed around the KCEC service area and connected to the
KCEC Distribution Grid. During 2017 seven new arrays will be constructed. Four new arrays
will be constructed each year in 2018, 2019 and 2020. Eight new arrays will be installed in
2021, and 8 new arrays in 2022.
The production schedule is projected in a U-shape with a larger 6-7 array buildout in 2017
followed by 3 arrays per year through 2020. Then production picks up in the final years of the
project, 2021 and 2022, when fifteen will be built.
There are two reasons for designing construction in this manner.
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1) We will arrive at a point where solar production exceeds the projected hourly load
sometime in 2020 and 2021. We plan to begin installing battery storage capacity to
absorb excess production in connection with the new arrays that will allow us to
exceed that limit. There are technical and engineering issues that need preparation,
and the new storage capacity will also pose management and scheduling issues.
2) The price of solar and batteries are on a steep downward curve and we plan to take
advantage of lower prices. In the case of batteries, we expect prices to reach a point
where combining battery storage with solar will be cost-effective when compared with
wholesale fossil-fuel prices.
2017 is an important year for rolling out the first step of this project. Our partners are
engaged in discussions concerning the 6 projects currently under consideration. We’ll update
this section based on decisions as they become available.
Conclusions
KCEC and GREP are embarking on a ground-breaking project that will provide all the energy
consumed by Kit Carson members during day-light hours from locally sited solar arrays.
There will be 35 1-Megawatt solar arrays constructed over the next six years and connected
directly to the KCEC distribution grid. The labor for the construction and maintenance of the
solar arrays will come from local businesses and building and electrical professionals as
much as possible.
The plan outlined here is flexible and will be adjusted to take advantage of new opportunities
and address challenges. Full community support for the effort is one of the most important
factors to guarantee its success. To that end KCEC and GREP are meeting with different
sectors of the community to obtain input and address issues.
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The KCEC Solar Project will contribute to the ensemble of qualities that makes our area an
ideal spot for environmentally minded businesses and residents. Together with the KCEC
fiber-optic network it provides the infrastructure for a sustainable, economically diverse, and
healthy community.
We plan to keep the local community and the broader community of rural America updated on
our progress, our successes, and the problems we encounter during the course of this
project. That will be our contribution to the transition to clean, locally produced energy over
the next couple of decades.
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Appendix A - Solar Deployment Options KCEC considered five different solar deployment options in developing this plan.
While the options are not mutually exclusive, this plan will lay the cornerstone for
KCEC’s solar power supply distributed to its members. Small residential and
commercial arrays already exist in our service area, and we anticipate that more will
be built. Our Charter School Array is the only Community Solar installation in New
Mexico. The New Mexico Public Regulatory Commission (NMPRC) has raised issues
concerning the legality of community solar, and bills are in the legislative process
now.
Small and large utility scale arrays face several constraints which may be overcome
during course of the Solar Project. Arrays on this scale would focus on sales of
power to remote customers and have the advantage of generating sales tax revenue
for the areas where they are sited. Access to reliable transmission must be available,
however. A developer who would obtain financing and a site, design the facility,
manage its construction, engineer its interconnection to the transmission grid, and
obtain Purchase Power Agreements for generation is needed for projects on this
scale. Financing will run in the hundreds of millions of dollars. All these constraints
must be overcome, but our area would make an ideal site for such a facility if the
obstacles can be addressed. Our combination of sunny days and high altitude will
certainly allow generation that would be competitive with almost any other area in the
U.S.
The options that we selected for the Solar Project are the Kit Carson scale solar
arrays of around 1 Megawatt coupled with battery storage for energy that exceeds
the Kit Carson day-time load.
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1. Small Residential and Commercial Solar Arrays As of the beginning of 2017, there are approximately 300 small residential and
commercial arrays installed through the KCEC service area. These arrays are
classified as “behind-the-meter” facilities because they produce power for individual
homes and businesses that is not delivered by KCEC. Excess power production from
these systems flows into the KCEC distribution system. KCEC purchases the excess
or “net” power at prices approved by the New Mexico Public Regulation Commission
(NMPRC). The process of compensating owners of small on-site arrays is known as
“net metering.” The combined output of these arrays is less than 1.5 MW, or about 4
percent of KCEC’s average electric demand.
KCEC does not see widespread deployment of residential and small commercial solar
as a preferred solution to system-wide energy demands. The costs of these systems
remain out of range for purchase by most KCEC customers. The costs and benefits of
“net metering” will change over time depending on the depth of penetration of Solar
and Wind resources within the system. Also, the rate of installation of these systems
is slow compared with that of larger solar systems. Factors such as building orientation
and vegetation limit the applicability of these systems. Although prices are steadily
coming down, roof-top systems are typically not accessible to low-income members.
The most significant constraint on these systems is financial. From the standpoint of
the system as a whole they cost twice as much as the 1 MW size arrays that are the
focus of this proposal.
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2. Community Solar Arrays
Community solar arrays allow more members of KCEC to participate in solar energy
purchases. The concept is to construct solar arrays on properties owned by public
entities such as schools, municipalities and counties. The panels on these arrays are
sold or rented individually; that is, a KCEC member may purchase one or more solar
panels. Members who purchase or lease panels will be credited on their bills based on
the electrical output of the panels, much like the “net metering” customers.
As solar prices decline, a greater percentage of KCEC customers will be able to afford
the purchase of community solar panels. Community solar replicates small residential
and commercial solar systems in that customers can own or rent solar panels without
having them installed on their properties. For example, Community solar might be
preferable for renters or for owners whose properties are otherwise not well suited for
solar arrays.
KCEC currently operates a community solar array at the Taos Charter School with 100%
of the panels sold to members. As with standard small residential and commercial solar
systems, the rate of installation of these systems is slow compared with that of larger
solar systems. Community solar arrays can be larger – in the range of 100 kilowatts to
1 megawatt, for example – but they also have limited potential to contribute a significant
portion of KCEC’s power demands.
While community solar arrays have many benefits the overall cost of installation,
maintenance, operation, and accounting are significantly higher than the proposed
solution.
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3. “Kit Carson” Scale Solar Arrays
KCEC is focusing on solar generators in the range of about 1.0 to 1.5 MW. KCEC sees
arrays of this size as the best current solution for meeting its goal of 100% of peak
daily demand during the summer. Based on existing electrical system design and
operation, arrays of about 1.0 MW integrate most easily into our distribution system.
Such arrays would not require major system upgrades or cause technical issues. Our
primary transmission provider, PNM, would not require additional specialized metering
by KCEC. Further, this array size is very cost competitive and much less expensive to
install than smaller arrays.
4. Small Utility-Scale Solar Arrays
For this plan, KCEC defines small utility scale solar arrays as those with output in the
range of 1.5 MW to 20 MW. These arrays could be built within the KCEC distribution
system, but would require major, costly system upgrades. Again, arrays of these sizes
must adhere to requirements imposed by PNM, especially if connected to KCEC’s 69
kV distribution lines.
5. Large Utility-Scale Solar
For this plan, KCEC defines large utility-scale solar arrays as those with output in the
range of 20 MW to greater than 100 MW. These arrays would not integrate easily into
KCEC’s distribution grid unless connected to either KCEC’s 115-kV transmission lines
or Tri-State’s 345-kV line in the area between Carson and Ojo Caliente. The current
capacity of the Ojo Caliente Electrical Substation is 7.5 MVA, and its power transformer
would need to be upgraded to accommodate larger arrays.
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Currently, there are two large-capacity transmission lines that pass through or
terminate in the KCEC service area. These lines are owned by Tri-State Generation
and Transmission Association, Inc. (Tri-State).
Tri-State owns and operates a 115-kV transmission line that originates in Hernandez,
NM. This line passes through the Los Cordovas Electrical Substation near the south
end of Blueberry Hill Road near Taos. The line then continues through Taos and Taos
Canyon, passing through the Black Lake Electrical Substation just south of Angel Fire,
and terminating in eastern NM near the community of Gladstone.
Tri-State also owns and operates a 345-kV transmission line that originates at PNM’s
Ojo Caliente Electrical Substation near Chili, NM. The Ojo Caliente Substation is a
major connector for large-capacity transmission lines running between the Four
Corners region and the large population centers of Santa Fe and Albuquerque. Tri -
State’s 345-kV line from Ojo Caliente Substation to Taos carries mainly coal- and
natural-gas fired power to serve the KCEC distribution area.
Any solar project with an output above 20 MW located along the Tri-State 115-kV and
345-kV transmission lines would require oversight and approvals by both PNM and
Tri-State. However, large utility-scale solar arrays connected to these lines could
supply KCEC with power for its local customers, and excess power could be
marketed to customers elsewhere in the regional transmission grid or all the power
could be sold to remote customers. Practical sale of excess power from solar
generation requires the availability of large blocks of energy on a reliable schedule.
6. Solar Energy Storage
Energy storage will become an integral element of KCEC’s power supply as battery
storage costs continue to decline. Storing solar energy generated during daytime hours
for use during cloudy periods or at night will augment KCEC’s renewable energy
supplies. With sufficient storage, KCEC may be able to reclassify its solar resources
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from “intermittent” to “firm.” Firm resources should help KCEC’s position in selling
excess power to third parties, and lower the costs of reserving transmission capacity.
Battery energy storage is the most likely opportunity for KCEC in the near future.
However, we are also exploring other storage technologies that might be better fits for
our system requirements.
KCEC Solar Plan March 2017
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Appendix B – Standard Interconnection Agreement
KIT CARSON ELECTRIC COOPERATIVE, INC.
STANDARD INTERCONNECTION AGREEMENT FOR
QUALIFYING FACILITIES 10 kW OR LESS
_____________________________ (Customer) and Kit Carson Electric Cooperative, Inc. (Utility), referred to collectively as parties and individually as party, agree as follows: 1. QUALIFYING FACILITY 10 kW OR LESS:
Customer's electric service account number _______________________________ Type of generating facility (solar, wind, etc. ______________________________ Rated generating capacity ______________________________ Customer and facility address ______________________________ ______________________________ ______________________________ Facility will be ready for operation on or about _________________ (date) Operating option: Customer has elected to operate its Qualifying Facility (QF) in parallel with Utility's system. Customer understands that if this agreement is accepted, connection and operation of customer's QF must meet, at all times, all applicable, safety and performance standards, including those established by the National Electric Code, the Institute of Electrical and Electronics Engineers, Underwriters Laboratories, and all additional safety and performance standards of Utility or adopted by the Commission pursuant to this rule that are necessary to protect public safety and system reliability. Customer shall be subject to the terms and conditions set forth in 17 NMAC 10.571, a copy of which is attached to this agreement, Customer, hereby acknowledges, that
Customer has read 17 NMAC 10.571.
2. CREDIT FOR NET ENERGY: Credit for net energy shall be in accordance with 17 NMAC 10.571.11. 3. INTERRUPTION OR REDUCTION OF DELIVERIES:
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Utility shall not be obligated to accept or pay for and may require Customer to interrupt or reduce deliveries of available energy: When necessary, in order to construct, install, maintain, repair, replace, remove, investigate, or inspect any of its equipment or part of its system; or if it reasonably determines that curtailment, interruption, or reduction is necessary because of emergencies, forced outages, forced majeure, or compliance with prudent electrical practices. Whenever possible, Utility shall give Customer reasonable notice of the possibility that interruption or reduction of deliveries may be required. Notwithstanding any other provision of this agreement, if at any time, Utility reasonably determines that either: The facility may endanger Utility personnel or other persons or property, or The continued operation of Customer's facility may endanger the integrity or safety of Utility's electric system, Utility shall have the right to disconnect and lock out Customer's facility from Utility's electric system. Customer's facility shall remain disconnected until Utility is reasonably satisfied that the conditions referenced, in this section, have been corrected. 4. INTERCONNECTION:
Customer shall deliver the as-available energy to Utility at the Utility's meter. Customer shall pay for designing, installing, operating, and maintaining the electric generating facility in accordance with all applicable laws and regulations. Utility shall furnish and install a standard kilowatt-hour meter. Customer shall provide and install a meter socket and any related interconnection equipment per Utility's requirements. Utility may meter the customer's usage, using two meters for measurement of energy flows, in each direction, at the point of delivery. Additional metering shall be at the expense of the party choosing to install additional meters, unless net metering cannot be accomplished otherwise; provided, however, that Customer's and Utility's responsibility for metering costs will be in accordance with the provisions of 17 NMAC 10.571.10.6. Customer shall provide a clearly understandable sketch or one-line diagram showing the Qualifying Facility, the interconnection equipment, breaker panel(s), disconnect switches, and metering; attached to this agreement. Customer shall not commence parallel operation of the generating facility until written approval of the interconnection facilities has been given by Utility. Such approval shall not be
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unreasonably withheld or delayed. Notwithstanding the foregoing, Utility approval to operate Customer's Qualifying Facility in parallel with Utility's electrical system should not be construed as an endorsement, confirmation, warranty, guarantee or representation concerning the safety, operating characteristics, durability, or reliability of Customer's Qualifying Facility. Utility shall have the right to have its representatives present at the initial testing of Customer’s protective apparatus. 5. MAINTENANCE AND PERMITS: Customer shall: Maintain the generating facility and interconnection facilities in a safe and prudent manner and in conformance with all applicable laws and regulations including, but not limited to, Utility's interconnection requirements as set out in Appendix A to this agreement, and Obtain any governmental authorizations and permits required for the construction and operation of the electric generating facility and interconnection facilities. 6. ACCESS TO PREMISES: Utility may enter Customer's premises: To inspect at all reasonable hours Customer's protective devices and read or test meter, and To disconnect, without notice, the interconnection facilities if Utility reasonably believes a hazardous condition exists and such immediate action is necessary to protect persons, or Utility's facilities or property of others, from damage or interference caused by Customer's facilities or lack of properly operating protective devices. 7. INDEMNITY AND LIABILITY:
Each party shall indemnify the other party, its directors, officers, agents and employees against all loss, damages, expense and liability to third persons for injury to, or death of persons or injury to property caused by the indemnifying party's engineering design, construction, ownership or operations of, or the making of replacements, additions or betterment to, or by failure of, any such party's works or facilities used in connection with this agreement by reason of omission or negligence, whether, active or passive. The indemnifying party shall, on the other party's request, defend any suit asserting a claim covered by this indemnity. The indemnifying party shall pay all costs that may be incurred by the other partying enforcing this indemnity. It is the intent of the parties hereto that, where negligence is determined to have been contributory, principles of comparative negligence will be followed and each party shall bear the proportionate cost of any loss, damage, expense and liability attributable to that party's negligence. Nothing in this agreement shall be construed to create any duty to any standard of care, with reference to or any liability, to any person not to a party to this agreement. Neither, Utility, its officers, agents, or employees shall be liable for any claims, demands, costs, losses, causes of action, or any other liability of any nature or kind, arising out of the engineering, design, construction, ownership, maintenance or operation of, or making of replacements, additions or betterment to customer's facilities, by customer or any other person or entity. Neither, Utility, its officers, agents or employees, shall be liable for damages to the electrical
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generating equipment caused by an electrical disturbance on the Utility system or on the system of another, whether or not the electrical disturbance results from the negligence of Utility. 8. GOVERNING LAW:
This agreement shall be interpreted, governed, and construed under the laws of the state of New Mexico as executed and to be performed wholly within the state of New Mexico. 9. AMENDMENT, MODIFICATIONS OR WAIVER:
Any amendments or modifications to this agreement shall be in writing and agreed to, by both parties. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party of the breach of any term or covenant contained in this agreement, whether by conduct or otherwise, shall be deemed to be construed as a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant unless such waiver is in writing. 10. NOTICES: All written notices shall be directed as follows: Attention: Kit Carson Electric Cooperative Kit Carson Electric Cooperative 118 Cruz Alta Road P.O. Box 578 Taos, N.M. 87571 Attention: CUSTOMER (Mailing Address)
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Figure 3. – Kit Carson Electric Cooperative Service Area showing electric
transmission and distribution lines and electrical substations.