Tri-State Generation and Transmission, the wholesale electric supplier for Southwest Colorado, is pursuing federal regulation of its rates, a change that could make it more difficult for electrical co-ops like La Plata Electric Association to buy out of their decadeslong contracts.
It is also a move that raised the suspicion of clean-energy advocates and left them questioning the long-term environmental consequences of the shift.
“It’s not in Tri-State’s nature to ask for the heavy hand of federal regulation,” said Mark Pearson, executive director of San Juan Citizens Alliance.
Tri-State, which operates across four states, is interested in the federal government overseeing its rate structure, saying it would provide a single set of rules instead of the inconsistent regulations it must adhere to by working across multiple states, said Tri-State CEO Duane Highley, in an email to The Durango Herald. Tri-State operates in Colorado, New Mexico, Wyoming and Nebraska.
But electrical co-ops that receive power from Tri-State – including La Plata Electric Association – and clean-energy advocates are concerned Tri-State is not taking enough time with the decision and that the long-term implications are not well-understood.
Green energy supporters are concerned federal oversight could make it harder to hold Tri-State accountable to state standards aimed at curbing emissions.
Tri-State may ask its board of directors to approve pursing federal regulations as soon as July, said Ron Meier, LPEA’s manager of engineering and member services. The Tri-State board includes representatives from 43 electrical co-op members, including LPEA.
LPEA and other electrical co-ops sent a letter this month to Tri-State asking the power supplier to take more time with the decision and address numerous questions about the potential regulations and Tri-State’s interest in them. The co-ops were informed about the decision to pursue federal regulation three weeks ago, Meier said.
“Until we have satisfactory answers to these questions, we believe it is inappropriate to vote for this change,” the letter says.
Some of the more pointed questions in the joint letter to Tri-State include:
“What are the actual costs of becoming FERC (Federal Energy Regulatory Commission) regulated, in addition to the $1.3 million annual fee?”“Why weren’t members consulted earlier? How much information does Tri-State even plan to provide to member-owners about this plan?”LPEA has not received answers to the questions, and it has not been told when to expect a response, Meier said.
LPEA letter to Tri-State
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Kirsten Skeehan, who is LPEA’s representative to Tri-State, said Tri-State started discussing the new federal regulations last year. But she said she is supportive of Tri-State delaying a vote about whether to apply for regulation to allow for co-ops to understand the issue better.
“I think asking to delay is fair,” she said.
Tri-State could benefit from operating under one rate structure versus navigating multiple rate structures set by different states, Skeehan said.
Tri-State sent a document to member co-ops explaining how federal regulations would affect Tri-State and its member co-ops. One impact would be removing Colorado co-ops’ ability to take rate complaints against Tri-State to the Colorado Public Utilities Commission.
A copy of the document was provided to the Herald by cleancooperative.com.
