Position Statement from City of Trinidad Re: ARPA Mediation

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ARPA Wants More Money and More Time—

ARPA Management and Some Board Members Want 18 More Months of Conversion to Natural Gas 

April 24, 2012 Denver, Co. – Two days of mediation with a Court-appointed mediator ended Friday, with no resolution for the Lamar Repowering Project (LRP) that has yet to produce electric power in compliance with the law.  Representatives from the City of Trinidad, Colorado met all day Thursday and Friday with ARPA lawyers, managers and two ARPA Board members in an attempt to resolve the most recent litigation regarding the failed LRP.  City representatives suggested alternatives that included shuttering the plant and cutting losses and near-term rate-certainty proposals.  ARPA representatives refused to consider any proposal that did not include allowing ARPA 18 more months for attempted repairs with additional investment in the Plant.  The Lamar Plant was supposed to be operational in 2008, but has been plagued with engineering and operational failures and has been cited numerous times by the Colorado administrative agency that oversees air quality compliance. 

Trinidad officials suggested the Plant should be shut down to reduce the overhead being paid by ratepayers.  The Plant has not been operational since 2011 and only then intermittently.  Despite this, recent reports indicate that ARPA and the City of Lamar maintain at least 25 full-time employees on site.  It is unclear what these employees are doing.  Additionally, ARPA has its own staff and a General Manager earning a health six-figure income.  Trinidad suggested that reducing these costs and arranging for a long-term supply of power could cut ratepayer costs in half.  Currently the market rates for power is under $0.03.  Costs of LRP power in 2011 ranged from $0.09 to $0.20. 

ARPA representatives rejected all offers suggested by Trinidad.  ARPA offered the “status-quo” – that is, continued attempted repairs, more ratepayer investment and no certainty.  Additionally, ARPA suggested that if the repairs failed, it would like the option to converting the Plant to natural gas.  Cost estimates for such conversion approximate $40,000,000. 

Trinidad, Colorado follows Raton, New Mexico in its request to exist from ARPA.  Raton left ARPA membership in 2010 and has reduced its electric sots via a competitive request for power supply.

Jerod Anthony Beatty
City of Trinidad Attorney
135 North Animas Street
Trinidad, CO  81082
719-846-9843