The board governing Tri-State Generation and Transmission Association this week voted nearly unanimously to pursue regulation by a federal agency, contrary to the wishes of one of its local member electric cooperatives.
Delta-Montrose Electric Association is trying to get out of its longterm contract to buy power from Tri-State so it can get more of its electricity from local and renewable sources. Over Tri-State’s objection, the Colorado Public Utilities Commission has agreed to decide on what is a fair and equitable amount for DMEA to pay Tri-State. DMEA contends Tri-State is asking it to pay too high of an exit fee from the wholesale cooperative.
Tri-State recently signaled its intention to seek to have its rates regulated by the Federal Energy Regulatory Commission. In early June, DMEA responded by asking a state judge for a temporary restraining order to keep Tri-State from getting out of PUC regulatory control.
Tri-State serves 43 electric cooperatives and public power districts in four states. It is currently exempt from FERC regulatory authority under federal law because it is wholly owned by small electric cooperatives. Its board voted this week to add new members, a move it says will eliminate that exemption. Tri-State hasn’t yet identified those new members.
Tri-State says the FERC oversight is needed to eliminate inconsistent rate regulation by individual states, after Colorado and New Mexico began exercising rate regulation over it in recent years. It says that action has resulted in increased costs and unrecovered revenue.
“Tri-State is rapidly changing to increase flexibility for our members and develop an ever cleaner and greener resource portfolio,” Tri-State Chairman Rick Gordon said in a news release. “As we transition, our cooperative will benefit from lower costs and greater efficiency by having a single, consistent rate regulator across all the states in which we operate.”
DMEA Chief Executive Officer Jasen Bronec said in a news release that Tri-State acted despite four of its members asking for more time to study the issue. It said these four members — DMEA, La Plata Electric Association, San Miguel Power Association and United Power — represent almost a quarter of Tri-State’s sales.
Tri-State’s board is made up of a representative from each of its members. Tri-State spokesman Lee Boughey said there were only two recorded “no” votes opposing this week’s action, but it doesn’t release the votes of individual board directors.
DMEA said it cast one of those “no” votes.
DMEA’s chief operating officer, Virginia Harman, said an Adams County court hasn’t set a hearing on its request for a temporary restraining order on the regulatory jurisdiction issue.
She said DMEA is working to determine how the Tri-State action will affect DMEA’s rate complaint case before the PUC.
Boughey said Tri-State expects the PUC hearing on DMEA’s complaint against Tri-State to proceed as scheduled in August.
“We don’t know at this time what effect FERC jurisdiction will have on the PUC case,” he said.
A bill passed by Colorado lawmakers this year subjects Tri-State’s resource planning process to full oversight by the PUC. Legislative leaders had asked Tri-State to delay action on seeking FERC oversight due to concerns that action would undermine the bill. Tri-State said in its news release this week that it will “continue to work constructively with state leaders to comply with resource planning, renewable energy and environmental issues.”