The huge increases in rate hikes by NV Energy for customers in their city got the best of Boulder City officials. Until 1987, Hoover Dam provided all of the city’s energy but as the water level dropped and the city grew, elected officials had to buy power elsewhere.
By 2011, the Boulder City Council had had enough and voted to end its contract with NV Energy. They signed a new power sharing agreement with the Silver State Energy Association in order to provide lower electric bills for the residents of the city.
Near St. George, Utah another small electric utility experienced the same issues. Escalante Valley Electric Cooperative was formed in the 1940s when Southern Utah Power declined to serve the residents of Escalante Valley because it was not financially feasible for the big company. The residents got together, got federal government loans, and formed the Escalante Valley Rural Electric Association.
A few years later, Dixie Electric REA was formed when St. George City Power and Southern Utah Power refused to serve homes and farms in the Washington Fields area. The two utilities merged to form a stronger cooperative and were later joined by the Littlefield REA when it decided to break away from Overton Power District.
Today the Dixie Escalante serves about 15,000 customers in Southern Utah and Northern Arizona and has some of the lowest power rates in this area. In 1996, after many years of conservative financial management, Dixie Escalante paid off all of its outstanding debt to the Federal Rural Electric Association and has become fully privately funded with the Cooperative Finance Corporation. When it decided to invest in renewable energy, it chose a different route.
In 2009, Dixie Escalante and St. George City Power embarked on a bold project and built a large photovoltaic facility called the Sun Smart solar farm. The solar project provides a maintenance free solar option to customers within the service area. “St. George area residents can now have access to solar power without installing solar panels on their homes,” said Phillip Solomon, energy services director for St. George. “We have seen increased demand from our customers for renewable energy and this provides that option.”
The construction began in 2008 for the “solar farm” concept that provides sustainable solar power with no set up, no maintenance, and no risk to the purchaser. What is significant is that the utilities built the project on city owned land thus avoiding the cumbersome permitting process BLM uses to approve of projects on federal land. As a result the project was completed, from start to finish, in just over a year. The only cost to the city and to Dixie Escalante REA was the purchase and installation of the solar panels.
“This is one of the most unique programs in the entire country, allowing residents to be able to buy into a larger system and then get a tax credit for it,” said Kelly Knutsen of Utah Clean Energy. “Every renewable energy project doesn’t fit every customer’s individual need so we wanted to provide another option. For example, this allows homeowners who are part of a home owners association that doesn’t allow you to put things on your home to still participate in a solar energy project.”
Customers can purchase from Sunsmart a full solar unit of one kilowatt (1000 watts) for $5,000 or a half solar unit of one half kilowatt (500 watts) for $2,500 up to a maximum of four full solar units in a 19 year contract. One full unit will generate an average of about 140 kilowatt hours per month or about 20% of an average residential electrical use. A one-time tax credit of 25 percent of the purchase price, up to $2,000, may be available from the State of Utah. In return for the solar purchase, the customer will receive a monthly energy credit on their bill for the amount of solar power produced at a minimum of 800 kilowatt hours per year for a full unit.
According to Sunsmart, the return on the investment is not necessarily a financial one but by participating in this program it is an investment in the community. The two utilities emphasize the social benefits rather than the cost to the buyer. “They are doing this for their future and for the future of their grandchildren rather than to make money,” said Solomon.
Proponents say it is a hedge against future power increases, rising energy costs, and climate changes. “Tomorrow’s power today,” said Solomon. “We don’t know what will happen tomorrow but we do know what we can do today.”
The financial picture of Dixie Escalante allows the utility to provide power at almost half the rate of Overton Power District in Mesquite. It also allows the member owned non-profit REA to return capital credit refunds to its customers at the end of the year. For each of the past five years the board of directors has declared a five percent refund.
A capital credit refund is simply giving back to the members of the cooperative the profits the company has earned for the year.
Another innovative program Dixie Escalante offers its customers is a “green power” option for those who want to support renewable technologies. It’s an alternative to purchasing a full or half unit of solar energy. Customers can buy blocks of 300 kilowatt hours of power for $6.00 which is added to their electric bill. The company then buys the corresponding amount of power from a renewable resource on the Western power grid. The power may come from geothermal, wind, solar, biomass, and even small hydroelectric projects. Customers can buy up to five blocks of green power.
According to the Solar Energies Industry Association, solar power installations have increased 67 percent in the last quarter of 2011. This was partially due to the unprecedented drop in solar panel prices in 2011. Dixie Escalante plans to use that to their advantage.
“The Sun Smart program makes it convenient and hassle free for residents to use renewable energy,” said LaDel Laub, General Manger of Dixie Electric. “It is the only project I am aware of where customers can actually own part of the project.”
The Sunsmart project boasts that the solar power can provide enough energy to power 26,272 homes over the life of the project, operate a television set for 6,585,954 hours and will avoid over 1,635,596 pounds of carbon dioxide output in the community.
“Being able to use this great energy source (solar), I think, is the future for our nation and for the world,” said Utah Senator Wayne Neiderhauser about the Sunsmart Solar Farm.
[Editor's note: This is the third in a series of articles by reporter John Taylor that examines the energy industry in and around Mesquite. Also see Mesquite Citizen Journal story OPD Hit With Credit Downgrade and Valley Electric Association Goes Solar]