Poudre Valley REA seeks to intervene in legal battle over exit fee estimates from Tri-State

Editor’s note: This story has been updated with a response from Poudre Valley REA.

FORT COLLINS and WESTMINSTER — Poudre Valley REA Inc. is seeking to enter an ongoing debate between several other electric co-ops and Tri-State Generation and Transmission Association Inc. over how early termination fees are issued, marking another twist in a long-running legal saga between the power wholesaler and several want-away co-ops in Colorado.

In a filing this month with the U.S. Federal Energy Regulatory Commission, PVREA seeks to intervene in the ongoing complaints brought by Brighton’s United Power Inc. and the La Plata Electric Association Inc. in Durango. The Fort Collins-based co-op said that it has an interest in the outcome of the case after asking Tri-State in February for an exit quote.

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PVREA spokesperson Sam Taggart told BizWest that the cooperative isn’t actively pursuing an exit from Tri-State, but wants to get an exit fee quote to help it determine the current value of its contract with the power wholesaler, and for use in long-term planning. The cooperative filed a motion to intervene so it can have standing to comment on the ongoing litigation.

“We must intervene to protect our interests and properly plan for what’s best for our members’ future,” he said. “Any interested party can intervene in FERC proceedings to have representation and participation in those proceedings.”

Electric co-ops that contract with Tri-State are required to purchase 95% of their power load from the power wholesaler, and the remainder can be procured from other sources or self-generated.

Several members have questioned the by-laws that Tri-State has regarding its member cooperatives asking for exit fees. Some of those rules cap the number of members who can ask for an exit fee calculation at three per year, requiring co-ops to adhere to a three-year withdrawal notice period. The rules also charge members at least $75,000 and up to $200,000 for Tri-State to calculate those exit costs.

Five other cooperatives in Colorado, Nebraska and New Mexico also filed separate motions in the broader proceedings, arguing that 

In a filing responding to PVREA and the other protesting members, Tri-State said the cooperatives were re-hashing arguments that were already rejected and accused them of mischaracterizing member by-laws that they all helped adopt.

PVREA’s request for information on how much it would cost to leave Tri-State would make them another player in a bitter and long-running dispute between the wholesaler and some of its members over how early termination fees are determined.

In late 2019, Brighton’s United Power Inc. and the LPEA petitioned the Colorado Public Utilities Commission to require Tri-State to give them a fair exit quote because the two co-ops aim to source non-carbon energy faster than Tri-State’s stated goal of reducing emissions by 80% by 2030.

The proceedings bounced between state jurisdiction to the federal level after FERC declared it had oversight over Tri-State after several non-utility companies joined as members.

United has since sued the CPUC and Tri-State in court, alleging that Tri-State misled it and other members into allowing non-utilities into the group as part of a larger effort to keep want-away members from leaving the organization.

Both of those lawsuits are ongoing.

PVREA covers large swaths of unincorporated Larimer and Weld counties, along with parts of Loveland and portions of northwest Boulder County, and provides power to approximately 45,000 residential and commercial customers. It is Tri-State’s second-largest member behind United Power.

United provided almost 15% of Tri-State’s entire operating revenues in 2019. It 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.

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