Guzman Energy is making waves and disrupting the energy wholesale industry. Not only are they winning significant customers from legacy providers like Xcel and Tri-State, but they’re also making significant strides in renewable energy.
But what is Guzman Energy, exactly? And what does it do?
This article reveals all.
In a Nutshell
- Guzman provides cheaper and more sustainable wholesale energy solutions to rural communities.
- It has helped numerous utility cooperatives exit undesirable contracts and break away from Xcel and Tri-State.
- Guzman Energy has invested heavily in several Colorado solar and wind farms.
- The company significantly raises utility cooperatives independent energy cap, paving the way for more solar development opportunities.
- Many of Guzman’s clients came on board in the past couple of years.
What is Guzman Energy?
Guzman Energy is a wholesale power provider that emerged in 2015.
Co-founded by Leo Guzman (current chairman) and Christopher A. Miller (CEO), the company has now expanded into a large team of individuals who come from small towns and rural areas.
Guzman’s founders realized there was an opportunity to provide more affordable electricity and better service to rural communities throughout the US, while increasing the opportunity to move toward more renewable energy sources.
It achieves this by partnering with cooperatives, municipalities, companies, and tribes and providing customized energy portfolios with a strong focus on renewable and sustainable energy.
The company is currently ranked by Inc.com as the 1,152nd most successful company in the US, so it must be doing something right.
Where Does Guzman Energy Operate?
Guzman is headquartered in Denver, Colorado, and many of its notable projects have taken place within this state or within the neighboring state of New Mexico.
The company also has offices in Coral, Gables, FL, and Austin, TX.
How is Guzman Energy Different?
Guzman’s founders came to understand that rural areas pay higher rates for energy sourced from dirty power plants.
The reason for this is that many utility companies and cooperatives supplying power to rural communities are stuck in long-term, inflexible contracts with legacy power suppliers and have no way out except to pay an exorbitant exit fee. As you are probably acutely aware, these legacy suppliers have done nothing but consistently raise rates in recent years.
Instead of following down the same tired and unsustainable path, Guzman Energy decided to take a different route and offer a different way of doing things.
Through a diversified energy portfolio and contracted energy sources, this wholesale energy supplier can create a customized plan that best serves the community in question.
What does Guzman’s Energy portfolio consist of, exactly? We don’t know everything, but the company has made several notable investments in renewable energy, has a number of solar and wind projects underway in Colorado, and has power purchase agreements (PPA) with a sizeable number of utility companies.
How is Guzman Energy Shaking Up Wholesale Energy Supplies?
It’s hard to tell precisely how Guzman operates. They keep their energy portfolio close to their chests and the website is somewhat sparse of information. Reaching out to the company bore no fruit, either.
While we would never expect a company to reveal all, the lack of information provided by the company means we’ll always keep a grain of skepticism in mind.
That said, there are a number of extremely interesting projects, contracts, and partnerships that Guzman has under its belt, all of which have been widely reported in the media.
The biggest shake-up is the apparent mass exodus of utility companies from wholesale giants like Tri-State and Xcel Energy that have left their contracts early and have already transitioned or are transitioning over to Guzman Energy.
The second shake-up is Guzman’s continued investment in clean power sources. The company purchases power from a sizeable number of solar and wind farms and even owns a few with more development projects underway.
The third significant shake-up, and the one that interests us the most, is that Guzman Energy raises the percentage cap on how much independent power a utility company can generate. Legacy providers cap this at around 3 – 5%, while Guzman tends to raise it to 20%.
This means that 20% of a utility company’s power can come from sources such as home and business solar installations. This presents more opportunities and incentives for farms in Colorado to go solar and sell their power to the grid.
To understand better what Guzman Energy does, let’s look at a few examples.
Where It All Started: Kit Carson Electric Cooperative
One of Guzman Energy’s first clients was Kit Carson Electric who signed a PPA back in 2016. The original agreement was on a 10-year term but this has since been extended another 15 years.
Initially, Kit Carson sourced power from Tri-State, which demanded a $37 million exit fee for the utility company to terminate its contract. Guzman financed this fee, allowing Kit Carson to provide cheaper electricity to its 30,000+ customer base.
By 2022, Kit Carson had fully paid off its debt to Tri-State and had partnered with Guzman to establish several solar facilities in the Taos, Rio Arriba, and Colfax Counties of New Mexico.
As a result, 100% of Kit Carson’s daytime electricity is now generated from solar.
Holy Cross Energy (HCE)
In 2019, Holy Cross Energy (HCE) and Guzman Energy forged an agreement centered around a renewable energy swap.
The two-way PPA enabled the development of the Arriba 100-megawatt wind farm, adhering to HCE’s commitment to clean energy goals.
In exchange, Guzman Energy utilized power from HCE’s stake in Unit 3 of the coal-powered Comanche Generating Station in Pueblo.
While this is, of course, dirty energy, the agreement has allowed the development of the wind farm to take place, increasing the amount of available renewable energy.
The Arriba farm was due to be completed in 2021. However, this was delayed and the projected operational date has been moved to 2023, though the exact date remains uncertain.
Garnet Mesa Solar and Delta Monrose
In 2020, Delta-Monrose broke its contract with Tri-State 20 years early and entered into a purchase agreement with Guzman Energy. To enable this, Guzman financed the exit fee to the tune of $72 million.
Furthermore, Guzman upped Delta-Monrose’s self-generated power cap to 20% and they started working together to develop the Garnet Mesa solar project.
Situated to the east of Delta, CO, on 383 acres of land, the solar farm will produce more than 194,000 megawatt hours (MWh) of electricity each year, supplying more than enough energy for 18,000 homes.
Not only that but the land upon which the solar panels are mounted will also provide grazing pasture for over 1,000 sheep!
This is a perfect example of how land occupied by solar can have a dual purpose. The sheep get all the grass they can eat and significantly reduce land maintenance by keeping the vegetation in check. It’s a win-win situation.
The project is a partnership between Guzman Energy, Citra Power, and the Delta-Montrose Electric Association and has been given the green light to go ahead. Presently in the pre-construction phase, it is unclear exactly when Garnet Mesa will be complete and operational.
Arkansas River Power Authority (ARPA)
ARPA provides electricity to six Colorado municipalities: Holly, La Junta, Lamar, Las Animas, Springfield, and Trinidad. In 2021, ARPA announced a new contract with Guzman as its wholesale power supplier.
This is a blow to Xcel – ARPA’s previous wholesale supplier – as it accounts for 66% of ARPA’s energy supply. An additional 28% comes from Western Area Power Authority hydro dams, and the remaining 6% comes from five wind farms situated in Lamar and Springfield.
The new contract with Guzman allows ARPA to repower their existing turbines and explore the possibility of adding solar in the area.
Panorama Wind Farm
Panorama Wind Farm, owned and operated by Leeward Renewable Energy in Weld County, CO, became operational in 2022 and generates 145-megawatts of electricity.
Guzman Energy purchases 100% of the power generated by the farm’s 66 wind turbines.
In February 2023, a new PPA between Sonnedix and Guzman was announced for the 110-megawatt Sonnedix Solar Fountain project in El Paso County.
When the project becomes operational in 2025, it will have the capacity to power over 36,000 homes and create over 300 local jobs, while saving 162,000 metric tons of CO2 annually.
Guzman Energy will purchase 100% of the power generated, making it a significant addition to its power portfolio.
Yampa Valley Electric and Grand Valley Power
In June 2023, Yampa Valley Electric and Grand Valley Power, two utility cooperatives, revealed plans to conclude their contracts with Xcel Power by 2028 and transition to purchasing wholesale power from Guzman Energy.
Both utility companies were pushed into finding an alternative after Xcel raised wholesale prices to unsustainable levels. Yampa Valley in particular reported a rise of 14% in 2023.
Additionally, Yampa Valley is keen to expand its foray into solar energy. Under its contract with Xcel, it was only allowed to procure 3% of its energy independently. Consequently, only 42% of Yampa Valley’s energy comes from renewable sources.
The new contract with Guzman Energy will change all that.
It is now expected that Yampa Valley’s energy will be 84% carbon-free by 2030. More importantly, Guzman Energy will increase the 3% independent energy cap to 20%.
So far, due to this cap, Yampa Valley has had next to no solar development, so the new increase will open up real and exciting possibilities for solar energy installations within the area.
Hot on the heels of Yampa Valley and Grand Valley Power is Tri-State’s largest member – United Power. The utility company has signed a wholesale agreement with Guzman Energy and will leave Tri-State in May 2024.
United Power first signaled that it wanted to leave Tri-State in 2021 and has since been mired in disagreement over the contract-break fee. At one point, Tri-State quoted $1.6 billion, but after a federal ruling, this is expected to be significantly less and around $250 million.
One of the reasons for the move is the 5% cap Tri-State places on self-generated power, which stifles the growth of solar and wind projects in United Power’s catchment area of 900 square miles. Although not disclosed, Guzman Energy is likely to have increased this percentage by quite a bit.
Shallow Basket PV: Hot Off the Press
The most recent announcement (September 13, 2023) is the new partnership that Guzman Energy has formed with National Renewable Solutions (NRS).
Guzman has agreed to purchase 100% of the power generated from the 140 MW Shallow Basket PV farm, along with operating and managing its accompanying 50 MW of battery storage.
Located in Rio Arriba County, NM, the site is due to be operational in 2025.
What Can We Take From This?
The emergence of Guzman Energy proves two things.
Firstly, utility companies are desperate to move away from exorbitant legacy wholesale suppliers in order to give their customers better rates and deals.
Secondly, the cap on how much energy can be independently sourced by utilities is severely restricting the development of solar in some areas.
As more utility companies are released from the binds of their Xcel and Tri-State contracts and move into more favorable agreements provided by suppliers like Guzman Energy, we will see new opportunities for solar energy present themselves.
We’ll continue to keep a keen eye on what Guzman Energy does next. So far, it’s all positive, and it’s making great strides toward moving Colorado into a future of sustainable energy.
Frequently Asked Questions
What Does Guzman Energy Do?
Guzman Energy is a wholesale energy supplier that focuses on purchasing energy from sustainable and renewable sources. It works closely with rural communities and utility providers to provide better energy rates and lower energy bills.
Guzman Energy also invests heavily in solar and wind farm projects, particularly within Colorado and New Mexico.
Who Are the Investors in Guzman Energy?
The current known investors in Guzman Energy are Paycheck Protection Program, Vision Ridge Partners and Zoma Capital.