A judge in Adams County has thrown out a lawsuit brought against the Delta-Montrose Electric Association by its wholesale power provider, finding that a contractual dispute between them is appropriate for the state Public Utilities Commission to decide.
Adams County District Judge Edward C. Moss this week dismissed the complaint brought by Tri-State Generation and Transmission Association against DMEA. The two entities are at odds over what is a fair fee for DMEA to pay to get out of its long-term contract with Tri-State, as DMEA looks to get more of its power from local and renewable energy sources.
Tri-State sued in January, arguing that the PUC doesn't have jurisdiction over the matter, and asking that the court instead rule on the contractual dispute. The PUC in February asserted its jurisdiction over the matter, agreeing to DMEA's request that it consider the fairness of the proposed exit fee, which has remained confidential. The PUC is scheduled to hear the case in June.
DMEA and the PUC, through the state Attorney General's Office, both had filed motions for the court to dismiss Tri-State's lawsuit.
Moss said in his ruling, "Tri-State's argument that the PUC cannot determine issues of contract is belied by the statutory authority. Not only can contract issues be presented to the PUC, the PUC has specific authority to provide remedies including determining the 'rules, regulations, practices, and contracts to be thereafter observed.'"
Moss said that determination, contrary to Tri-State's assertion, "is not purely legal and requires the PUC to make factual determinations concerning the proposed DMEA contract buyout" and previous contract buyouts by Tri-State involving other Tri-State members.
Jasen Bronec, DMEA's chief executive officer, said in a news release, "Tri-State made it clear in its lawsuit against us that it wanted to prevent DMEA from arguing its case before the PUC, which is charged with protecting the public interest. We disagreed with Tri-State's position that the PUC is powerless to prevent Tri-State from holding rural Coloradans captive by setting whatever exit charge it wants. Tri-State's loss is not just a victory for DMEA, but a victory for rural Colorado."
Tri-State contends that any exit fee for getting out of a contract early must be fair to its remaining members, taking into account the debt it has taken on to invest in power plants and transmission lines based on long-term member contracts.
Tri-State spokesman Lee Boughey said the suit was dismissed on procedural grounds and not the merits of whether DMEA may get out of its Tri-State membership, or on what terms. He said the judge "simply held that the court should not proceed until the commission has made its own determination of certain contractual issues," and dismissed the case "without prejudice," meaning Tri-State can refile suit after the PUC proceeding is over.
"The majority of our members, which represent communities across rural Colorado, Nebraska, New Mexico and Wyoming, believe that withdrawal decisions must be made by our board of directors, or by a court if the issues cannot be resolved amicably," Boughey said. "Nothing in the court's order is inconsistent with that."