{"id":93172,"date":"2019-07-02T16:38:18","date_gmt":"2019-07-02T16:38:18","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/lpea-blasts-tri-state-for-seeking-federal-rate-structure\/"},"modified":"2019-07-02T16:38:18","modified_gmt":"2019-07-02T16:38:18","slug":"lpea-blasts-tri-state-for-seeking-federal-rate-structure","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/lpea-blasts-tri-state-for-seeking-federal-rate-structure\/","title":{"rendered":"LPEA blasts Tri-State for seeking federal rate structure"},"content":{"rendered":"\n

\"Tri-State
Tri-State Generation and Transmission could ask its board to pursue federal regulation of its rates at its July meeting. Electrical co-ops, such as La Plata Electric Association, and clean energy advocates are calling on Tri-State to delay action.<\/span>Courtesy of La Plata Electric Association file<\/span><\/figcaption><\/figure>\n<\/p>

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.<\/p>\n

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.<\/p>\n

\u201cIt\u2019s not in Tri-State\u2019s nature to ask for the heavy hand of federal regulation,\u201d said Mark Pearson, executive director of San Juan Citizens Alliance.<\/p>\n

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<\/em>. Tri-State operates in Colorado, New Mexico, Wyoming and Nebraska.<\/p>\n

But electrical co-ops that receive power from Tri-State \u2013 including La Plata Electric Association \u2013 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.<\/p>\n

Green energy supporters are concerned federal oversight could make it harder to hold Tri-State accountable to state standards aimed at curbing emissions.<\/p>\n

Tri-State may ask its board of directors to approve pursing federal regulations as soon as July, said Ron Meier, LPEA<\/a>\u2019s manager of engineering and member services. The Tri-State board includes representatives from 43 electrical co-op members, including LPEA.<\/p>\n

LPEA and other electrical co-ops sent a letter this month to Tri-State<\/a> asking the power supplier to take more time with the decision and address numerous questions about the potential regulations and Tri-State\u2019s interest in them. The co-ops were informed about the decision to pursue federal regulation three weeks ago, Meier said.<\/p>\n

\u201cUntil we have satisfactory answers to these questions, we believe it is inappropriate to vote for this change,\u201d the letter says.<\/p>\n

Some of the more pointed questions in the joint letter to Tri-State include:<\/p>\n

\u201cWhat are the actual costs of becoming FERC (Federal Energy Regulatory Commission) regulated, in addition to the $1.3 million annual fee?\u201d<\/em>\u201cWhy weren\u2019t members consulted earlier? How much information does Tri-State even plan to provide to member-owners about this plan?\u201d<\/em>LPEA has not received answers to the questions, and it has not been told when to expect a response, Meier said.<\/p>\n

<\/p>

Kirsten Skeehan, who is LPEA\u2019s 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.<\/p>\n

\u201cI think asking to delay is fair,\u201d she said.<\/p>\n

Tri-State could benefit from operating under one rate structure versus navigating multiple rate structures set by different states, Skeehan said.<\/p>\n

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\u2019 ability to take rate complaints against Tri-State to the Colorado Public Utilities Commission.<\/p>\n

A copy of the document was provided to the Herald<\/em> by cleancooperative.com<\/a>.<\/p>\n

<\/p>

Emissions standards accountabilityFederal regulation over rates could make it harder to hold Tri-State accountable to adopting renewable energy generation because it would split oversight of the co-op between the state and the federal government, advocates said.<\/p>\n

This spring, the state Legislature approved a measure aimed at cutting emissions 26% by 2025, 50% by 2030 and 90% by 2050 from 2005 statewide pollution levels to help address climate change.<\/p>\n

As part of the state\u2019s efforts to cut carbon, Tri-State will be required to submit plans for future electrical generation to the state Public Utilities Commission for approval by state law.<\/p>\n

Submitting plans to the state is a requirement that other electrical generators, such as Xcel Energy, must abide by, said Erin Overturf, deputy director of the Clean Energy Program for Western Resource Advocates<\/a>.<\/p>\n

Investor-owned utilities like Xcel must also submit their rates to the state for approval.<\/p>\n

By overseeing how electrical utilities generate their power and their rates, it allows the state to hold companies accountable, Overturf said.<\/p>\n

If Tri-State\u2019s rates are regulated at the federal level and its electrical generation standards are regulated at the state level, it could make holding the co-op accountable to its approved power-generation plan harder, she said.<\/p>\n

For example, Tri-State customers, such as LPEA, could not challenge what they are being charged for a new energy generation facility at the state level, she said.<\/p>\n

In recent years, Tri-State has purchased coal-powered assets that it didn\u2019t disclose in plans submitted to the state, so accountability is important, she said.<\/p>\n

New rules for buyouts<\/div>\n

Federal regulation would also eliminate state jurisdiction over co-ops interested in buying out of their contracts with Tri-State, according to an \u201coverview\u201d Tri-State provided to its co-ops.<\/p>\n

LPEA has been exploring a buyout of its Tri-State contract, in part because Tri-State caps how much renewable power LPEA can purchase from outside sources at 5%. Some members would like LPEA to have the freedom to develop renewable energy locally to help cut carbon.<\/p>\n

Delta-Montrose Electric Association is interested in buying out of its contract with Tri-State for similar reasons and was expected to set a precedent for how other co-ops could part ways with Tri-State.<\/p>\n

DMEA has filed a case against Tri-State disputing the cost of a buyout that is expected to be heard in July in front of the Public Utilities Commission.<\/p>\n

The Tri-State board could vote on whether to pursue federal oversight before the PUC hearing, Skeehan said.<\/p>\n

Green energy advocates find the timing highly suspect.<\/p>\n

\u201cIt seems to be entirely motivated by trying to sabotage DMEA\u2019s complaint at the Colorado utility commission,\u201d Pearson said.<\/p>\n

Skeehan said she is not supportive of taking a vote that could preempt a decision or settlement in the DMEA case because moving the case to a federal venue would be a \u201cwaste\u201d of all the effort put into the state case.<\/p>\n

In the long term, federal regulation over rate disputes or buyouts involving Tri-State and its co-ops could be more time-consuming and expensive than state cases, Overturf said.<\/p>\n

Next step<\/div>\n

Despite Tri-State\u2019s history, the organization is changing, Skeehan said.<\/p>\n

\u201cI thoroughly believe that Tri-State is on the right path,\u201d she said.<\/p>\n

<\/p>

Tri-State\u2019s board formally supported a resolution in June to \u201cpursue options to develop the ability to provide solar, storage and other renewable opportunities and energy solutions,\u201d according to a copy of the resolution provided by Skeehan.<\/p>\n

The LPEA board will discuss Tri-State\u2019s plan to apply for federal regulation Tuesday in a meeting that is closed to the public. The board could take a more formal position on the issue during a vote after the meeting. In the meantime, LPEA wants Tri-State to delay a decision and share more information about the new rules, Meier said.<\/p>\n

\u201cI believe that Tri-State is not taking this lightly at all,\u201d he said.<\/p>\n

mshinn@durangoherald.com<\/a><\/em><\/p>\n

Tri-State issue brief (PDF)<\/a><\/p>\n

LPEA letter to Tri-State (PDF)<\/a><\/p>\n

Tri-State Resolution (PDF)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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