Two energy co-ops ask state regulators to allow divorce from Tri-State

WESTMINSTER — Two electric co-ops are petitioning state regulators to force Westminster-based power wholesaler Tri-State Generation and Transmission Association Inc. to give them quotes for exit fees.

In filings with the Colorado Public Utilities Commission earlier this month, Durango-based La Plata Electric Association Inc. (LPEA) and Brighton’s United Power Inc. both claim Tri-State refused to give it an exit fee quote when it requested one in early July and in August 2018, respectively.

United Power and LPEA are both required to buy 95 percent of their power mix from Tri-State. The two co-ops combined provided 21.8 percent of Tri-State’s revenue this calendar year, according to its latest financial filings.

Both of the local co-ops say Tri-State is also enforcing a member-wide exit moratorium until its next member-wide annual meeting in April, and is refusing to issue so-called “shopping letters” that grant the co-ops legal protection to talk with other power providers. While LPEA and United Power both received shopping letters before Tri-State started enforcing a moratorium, they both say those letters expire on Dec. 31.

The complaints allege Tri-State’s moratorium was placed in effect to hold its members hostage while it tries to become a federally regulated entity to prevent Colorado officials from setting exit fees for co-ops trying to leave.

“Tri-State is seeking to run out the clock on its members’ ability to obtain withdrawal terms until it has completed its efforts at FERC seeking to undermine commission jurisdiction over exit charges,” LPEA said in its complaint.

Tri-State argued both of its members are trying to use litigation to strengthen their bargaining position within Tri-State’s committee is currently developing a new procedure for members to request exit fee quotes, and requested the PUC set a 30-week schedule for both sides to prepare for litigation instead of the five proposed by LPEA.

LPEA covers Durango, parts of the San Juan and Rio Grande National Forest and a portion of the state bordering New Mexico. United Power covers all of Brighton and several smaller towns in Weld County, such as Erie, Frederick, Firestone, Fort Lupton and Keenesburg. It also provides power to parts of northeast Thornton, Broomfield and Lafayette.

Tri-State currently counts 43 member co-ops across Colorado, Nebraska, Wyoming and New Mexico. In 2016, a New Mexico co-op paid $37 million to exit Tri-State, while the Delta-Montrose Electric Association is scheduled to cancel its contract with Tri-State in 2020.

The PUC is set to hear arguments on approving the LPEA and United Power’s proposed timelines in its Wednesday meeting.

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