In 2012, Erdman Energy Enterprises LLC (Erdman) filed a Special Use Permit (SUP) application with San Miguel County that was subsequently withdrawn because an agreement with San Miguel Power Association (SMPA) was not reached for the purchase of power that would be generated by the proposed solar facility. Following on-going discussions with and consideration by Tri-State Generation & Transmission Association and SMPA regarding purchasing power from this proposed solar installation, Erdman recently submitted a new SUP application for a solar facility on its property.
The San Miguel County Board of Commissioners should not approve this permit for at least three reasons: It is not commercially viable, it sets a terrible precedent for development and it does not respect the scenic values of the area.
Erdman Energy proposes to produce 275,000 kwh/year for commercial sale to SMPA. In 2013, Erdman estimated project costs of $1.5 million. If it sells the power at current rates ($.134/kwh on our utility bill) it will recover its undiscounted costs in 40 years. If it sells power at $.50/kwh then this reduces the recovery to 11 years. Neither of these is a realistic scenario for an investor or the ratepayer. Absent other information, this is clearly a vanity project that depends on access to SMPA’s ratepayer base. A comparable source for distributed power would be a natural gas fired Capstone 65kw microturbine installed at an estimated cost of $1,200 per kilowatt ($78,000) with a footprint of 6-10 square meters and producing 550,000 kwh per year. If you could sell the power at $.134, costs would be recovered in less than two years.
In Erdman’s 2012 application, the possibility of the further development of Phase II and III and beyond was discussed. Although these additional phases are not mentioned in the current application, the poor economics of the project will drive a quest for the efficiency that comes with scale. Also, SMPA appears to be encouraging more investment in their solar facility in Paradox, a much better location for solar power development. The commissioners’ approval of a facility so close to Telluride, a location that has surprisingly poor solar economics, is unnecessary. Out of 59 days in January and February, only 23 were sunny or mostly sunny, according to weather records.
The precedent of projects like Erdman Energy’s should concern us. Solar power installations on existing structures (such as the sewage treatment plant) are attractive ways to supplement power grids on a net-metering basis where clean solar energy is used to reduce utility costs and environmental impacts. However, grassroots commercial power projects require significantly more careful financial, environmental and political consideration. So far the approval process has largely ignored the existing land use code provisions which regulate the extension of utilities in our county and, in particular, the provisions that require that utility projects be financially viable, compatible with agriculture land and historic and archaeological resources, and necessary.
Because we live in one of the most beautiful places on the planet, we must always use our eyes. Thirty years from now this project, if approved, will remain a scab on Deep Creek Mesa. Erdman is on record as saying they don’t care about cost, but is not the diminishment of the scenic quality of the Telluride area a cost born by all of us who live here? In 2007, Telluride paid $50 million for 570 acres of the Valley Floor or nearly $88,000 per acre to protect its scenic value. Local customers also agreed to a 20 percent increase in rates to bury power lines across the mesas to protect views. Now Erdman asks the commissioners to give him the right to use his 37 acres for an uneconomic and unnecessary commercial project. Erdman also uses the solar facilities around the Denver International Airport to suggest that his project is consistent with local industrial use and responsible planning. If that’s the case, then a Motel Six and a giant pink bronze bronco can’t be far behind.
Please, let your commissioners know that you oppose the project.