Teri Viswanath: Welcome to Power Plays extended play series, a short podcast series of interviews with influential electric co-op managers that are innovating. I'm Teri Viswanath, the lead economist for Power, Energy and Water at CoBank. Our extended play content is actually a five-part series recorded to celebrate National Co-op month in October. Over the course of the month, Tamra Reynolds and I will be sharing and celebrating, if you will, success stories from our electric co-ops. These are really uplifting stories of community leadership, energy transformation and innovation that, well, they inspire.
In the third of our series, my co-host, Tamra Reynolds, Managing Director at CoBank, catches up with Luis Reyes, He's the Chief Executive Officer and General Manager at Kit Carson Electric. It's a rural electric cooperative serving 29,000 members in Taos, Colfax and Rio Arriba Counties in North Central New Mexico. About five years ago, Luis and Kit Carson's board engaged with their members to understand what sort of energy supply the community wanted, and what other services that co-op should provide.
With over 300 days of solar and strong environmental commitments, Luis found common ground for developing a vibrant solar program. By the end of this year, Kit Carson will have successfully achieved its goal of meeting 100% of its daytime electricity requirements with solar. That's a full year earlier than what the board originally committed to. It's a really great story, but for me, it's really exciting to hear Luis's vision about how co-ops can evolve with your membership. I think you're going to enjoy this one. Let’s listen in with Tamra's conversation with Luis.
Tamra Reynolds: Luis, Good morning. It's so great to see you again.
Luis Reyes: Good morning, Tamra, how you doing today?
Tamra Reynolds: Good. I wanted to talk a little bit more about Kit Carson and some of the solar initiatives and storage initiatives that you guys have going on and really just dive into why you guys are looking at that, and what role the membership plays and what role the board plays in that, and how you go about thinking about where you want to take Kit Carson Electric over the next 5 to 10 years.
Luis Reyes: Tamra, to your first question, the members drive Kit Carson. We have a very active and progressive membership. We're located right at the base of the Rocky Mountains in the Sangre de Cristo Mountains. Our prime economy is tourism, so we have a lot of ski areas. We have ranching and farming. The environment is extremely important to us because of tourism, because of our livelihood, in ranching and farming. So, we need blue skies and clean water and clean air. I think the difference with Kit Carson and its members is they really want the cooperative to walk the talk. Just not talk about it and give excuses why we couldn't do that.
It's been a little over five years that we decided to really engage the membership on what kind of energy supply do you really want in the future? What other services do you want Kit Carson to offer. The board set up meetings, and at the end of the day, renewable energy was one of the top things they wanted us to pursue. We embarked on a goal to hit 100% daytime solar. Up here in northern New Mexico, we have over 300 days of solar days that the sun shines practically all day. That made sense for us. We had already a radio station that was completely solar and we had a bunch of different groups that were interested in solar for different reasons.
We had old Spanish land grant folks who really wanted to use it to leverage or to encourage people to go up to the mountains because it was clean air. We have two tribes, two pueblos that really embraced renewable energy as basically getting back to Mother Earth, and what Mother Earth can offer as prosperity. We have a very, I guess, dynamic, progressive membership that really wanted us to see clean renewable energy alternatives. So, we embarked on that, and by the end of this year we'll hit that goal.
We've done it with distributed energy, so we have solar arrays, about 18 of them, ranging from 40 kW parking canopies, to one under construction, a 15 mW array with battery storage and they're located around our system.
One of the things we found is our members wanted their own solar facility, so we have spread them out across different communities to make sure everyone has their own power. I think that's helped, because they see where the power is coming from. Everyday they pass it. In the early days solar was more expensive, and now as solar has become more mainstream, it's become the cheapest power supply.
We decided then to add storage. So, we start to understand the value of storage, the value streams of storage, and what storage could help in the future with both non-solar times and resiliency. Really, what's missing in this transition to renewable energy is that transition generating supply. Right now, we have natural gas and coal that is baseload, but what do we do in those start to close? I think it's important to start getting some experience on batteries, see what their limitations are, understand their cost and their lifecycle. So, it puts us in a good position to be ahead of the curve to make sure when that last coal plant is closed, that we can continue to offer reliable, affordable electricity, which is the foundation of the co-op program.
Tamra Reynolds: Maybe you could give us some more background on some of the work that you're doing to keep your members engaged and how you keep them top of mind, and what their needs are, what you need to do to engage them at Kit Carson. How do you keep that going?
Luis Reyes: Tamra, one of the first and most basic things in member engagement outside of the board meeting is we really have a lot of member meetings where we meet in face, meet in person, during COVID a little bit more difficult, but we sit down with groups of customers. We have a lot of consumer groups, we call them consumer advisory groups that we've set up, and we talk to them all the time. We also set up meetings with our two pueblos. They do have different and unique issues that they have to address.
Then, what we do is we bring all that information back to the board to formulate policy, to determine where are the common areas that we have in our community. In the past, you knew everyone who went to the grocery store, and you knew everyone who went to the post office and schools. Now, as people have moved out, because they're tired of the urban lifestyle and want to live in rural areas, you just don't know everybody and they have different views on how things should run. Some have never been exposed to a co-op. So, just the education of them saying, "We're not an investor on utility, we're the good guys," that takes a lot of communication.
We start that as a foundation, the good old-fashioned, "Just sit down and talk out what's important to you and let's see if we can deliver that." Then, we formulate policy and programs. A good example is we just started our EV program, EV charging program. We really didn't have a sense of how many folks had EVs in the area, how many charges outside of the ones Kit Carson had. We basically call a community meeting where we got about 50 different entities and individuals to talk about electric vehicle charging and the future of EVs.
Now, they have made it a priority that Kit Carson should create an EV charging infrastructure for both our tourists and also create a program for home charging. Here's a good example of you talk to your members, you bring experts, you get some consensus of how to move forward. We brought in our policy, or elected officials, Tamra, to make sure the codes and we had locations to place EV charging. We then met with CoBank to determine how do you finance this, and then you put a plan together. Now, you have a community plan around EV charging that's been embraced by the entire community. In fact, to the point where now people are asking for their charger in their neighborhood.
I think that the more you engage people, listen to both what they want us to do and their complaints, really makes them feel at home that they do have a voice in, at least in this case, their energy future. It's got us a pretty robust solar program, pretty robust broadband program. Our storage is starting to take off. We're now starting to talk about distributed storage to address maybe some of the wildfire issues we have in some of our mountain communities. You have both the Forest Service and ski areas embracing that idea. We have a really robust discussion and program started on electric vehicles, all started by asking the members, "What is it you want?"
Tamra Reynolds: Can we talk about maybe that a little bit and talk about how some of those decisions you're making around solar and storage, and even broadband for that matter, transition what that model looks like and what that means for you guys as a successful service provider for your membership?
Luis Reyes: The business model is going to change for co-ops for all utilities. We're going to be more of service providers, maybe wire companies to deliver different types of services to our members. First, because our demographics are changing. There are not very many people who remember that first light bulb coming on on the ranch or the farm, or in small rural communities. The new generation, electricity is not a luxury anymore. It's expected to be on 24/7, it's expected to be affordable, and the expectation is everyone should have it.
The other thing that's happening is technology is really changing the energy landscape. I do think we have a lot of folks that are willing to now generate their own, whether that's the rooftop solar. I've always believed that fuel cells are going to become mature and offer a supply. It's almost like a cell phone. Fuel cell for me is one that is going to be powered by hydrogen that you get from the sun and it's portable. You can plug and play it into your house.
You can move it around if you have that ability to, but my point is, the way we deliver power in the future is not the way we deliver power today. The expectations of our members in the past are already changing, where members want services from us because kilowatt hours are easy to get now. I can see a whole slew of energy services being offered to our members where they want to generate their own energy. They may want to generate their own energy at different times, so then we act more like a battery. We should be in a position to support those ideas instead of fight those ideas.
Again, we have to get back to our roots where our members are our owners. The final thing I'd like to touch on is really the benefits of having a broadband network that will tie all this together. When I talk about broadband in this respect, we can say it's used to make a more intelligent grid so that we can offer our members real-time pricing or dynamic pricing. We can give them access to the grid to know if this is a good time to sell power or not, so they start making decisions and choices and we can then, in a sense, conduct that transaction for them.
We can start putting more intelligent devices in the home so that we can be smarter about what kind of power supply we need to deliver and be more efficient. Just with the experiences we had through COVID, those areas that lack broadband really didn't weather COVID as well as those of us who had broadband in rural areas. Again, these are all services that we can offer our members and bring value. That was the initial intent of the co-op program in the '30s, was to bring some value to rural areas. Bringing electricity back then, in my mind, was a form of economic development.
The byproduct was we electrify the rural areas that fed us. We're in our second big movement of bringing broadband to rural areas since we did a great job in bringing electric service to rural areas. Congress, USDA, policymakers across the country are looking at co-ops now to deliver broadband because we did do a good job in delivering electricity. That's the second major step in bringing more economic development opportunities to our communities. Tamra, because the fact is, if we don't do that, who's going to do that? If we don't offer services and really start to change as our members change, then all that's going to happen is they'll decide they're going to find leaders to accommodate their needs.
Or, we'll start to lose more people in rural areas where they're going to move to urban areas because the opportunities aren't there anymore. We're at a point to really take the bull by the horns and be the real leaders that we've been for the last 80 years, or we can decide that the game's over and let someone else do it.
Tamra Reynolds: Yes, that's a great point, Luis. I really appreciate what you said about thinking about yourself as a service provider in addition to all the things you've already done for the last 80 plus years. We appreciate your time today talking about all the things going on Kit Carson. I look forward to continuing to watch how you guys innovate and meet member needs. Thank you.
Luis Reyes: Thank you very much.
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