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1803 is taking on new historic significance in Louisiana.
A generation and transmission cooperative created by five electric distribution co-ops and named for the year of the Louisiana Purchase will soon begin providing power used by tens of thousands in the Bayou State.
The co-ops will receive both power and transmission services from 1803 Electric Cooperative starting in 2025, when their current contracts with a for-profit provider expire.
Winnsboro-based Northeast Louisiana Power Cooperative will be the first served by 1803 on Jan. 1. The other four co-ops are on target for service on April 1.
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“We're going to be ready," says Matthew Peters, general manager of Houma-based South Louisiana Electric Cooperative Association. “There's no problem we can't solve, because we all work together to solve them. We have the same mindset, values and view to always make sure that members of all the co-ops are getting the best deal possible in this ever-changing industry."
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Deridder-based Beauregard Electric Cooperative, Homer-based Claiborne Electric Cooperative and Franklinton-based Washington-St. Tammany Electric Cooperative make up the remaining founding co-ops.
New Roads-based Pointe Coupee EMC has joined 1803 as a transmission-only member.
1803, which is headquartered in Baton Rouge, will purchase and supply more than 1,000 megawatts of power to its distribution members, who will then provide the power to about 120,000 Louisiana co-op members.
The co-ops say they were driven by a host of member-focused needs.
“We believe that forming our own generation and transmission cooperative will lead to several benefits, including more flexibility, reduced costs, direct decision-making control, more proactive management and an increased focus on reliability and affordability," says Claiborne Electric General Manager and CEO Michael Marcotte. “Our priority is to make decisions in the best interest of each cooperative and every cooperative member. Our desire is to take control of our own future and make power supply decisions that best fit our needs."
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The new G&T achieved its certification from the Louisiana Public Service Commission for its initial power supply resource portfolio in January 2022 and had engaged the energy supply manager ACES Power, which is owned by 24 other G&Ts and a distribution electric co-op, to help with its request for proposal process for energy contracts.
“We received a very robust response: 20-plus unique companies with approximately 100 different options for supply and structure," says 1803 CEO Brian Hobbs. One contract takes 58% of the capacity, energy and ancillary services of a highly efficient combined cycle gas power plant owned and developed by Kindle Energy. The 20-year commitment begins in summer 2025, when the plant enters operation.
Another contract involves capacity and energy purchased from an existing combined-cycle plant owned by Calpine Energy. The G&T also signed a five-year contract with Constellation Energy, which participates in the MISO wholesale electricity market, and has agreements with several solar generation facilities.
“With the changing face of modern power procurement come challenges to the way electric cooperatives secure the power their member-owners need," says Kevin Turner, BECi's interim general manager. “By uniting, the five cooperatives created a larger, more attractive power demand to facilitate more participation from large-scale power brokers."
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Hobbs was tapped to lead 1803 in February 2023 after having been part of the team shepherding the new G&T through financing, contracting, regulatory approvals and wholesale power rates. He had retired from Western Farmers Electric Cooperative as vice president of legal and corporate services after 40 years at the Anadarko, Oklahoma-based G&T and five years in private law practice.
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He says every bit of his experience came in handy. Approval of 1803's new supply contracts by the PSC was hotly contested by investor-owned utilities for two years and a final hearing involved six days of cross-examination.
After what he described as particularly aggressive questioning by the IOUs, Hobbs recalls the administrative law judge asking him why the co-ops didn't just renew their contracts as a low-risk solution.
“I said it does derisk it, but it derisks it at a significant premium," Hobbs says. “Just by virtue of running the RFP, they saw a 20% reduction in a bid submitted by their incumbent provider, and the portfolio that we've put together is still approximately 5% lower in cost than that."
Hobbs' belief in the co-op model runs deep, and he says he is counting the days to Jan. 1.
“I've worked with co-ops literally since the Monday after I graduated from high school. Reliability and low cost, that's the co-op mantra," he says. “That's why we're doing what we're doing."
