The Federal Energy Regulatory Commission told Tri-State Generation and Transmission Association last week that its tariff is unreasonable and that it needs to come forward with the information its member utilities need to determine how much it would cost to exit the organization.

Now, Tri-State has 30 days to respond.

The FERC’s action comes after multiple members of Tri-State, including Poudre Valley REA Inc. with headquarters in Windsor and United Power based in Brighton, sought the FERC’s help in forcing Tri-State to play ball in determining exit strategies for utilities that want to know the costs of getting out.

In April, Poudre Valley REA joined a legal effort against Tri-State. “We’re not actively trying to leave,” said PVREA strategic communications director Sam Taggart. But the utility would like to know how much it would cost if it were to make that decision. 

PVREA was among several Tri-State members to seek answers from Tri-State that were not forthcoming. United Power and La Plata Electric Association, based in Durango, are actively seeking to leave Tri-State. Member/users in their associations would like their utility to use a larger share of renewable sources for energy. While Tri-State is moving away from carbon-based generation to more renewable energy, it isn’t moving fast enough for some.

Taggart said that while Tri-State has offered its contract release methodology, it wasn’t clear about the costs. “We felt it was unjust,” he said, which promoted the cooperative utility to seek FERC help. “We think this should be more open and transparent for everyone,” Taggart said.

The FERC in its decision said that Tri-State’s pricing structure makes it difficult for members to figure out how much leaving their wholesaler would cost. At least in part, the difficulty in determining an exit cost comes down to proprietary information that Tri-State won’t share with its members yet that information is necessary to work the exit calculation.

“We would argue that as members this information should be available,” he said. Members want to make sure that all members are treated the same in these transactions.

As reported in the online journal Utility Dive, the FERC said, “Today, several utility members have outstanding [contract termination payment] calculation requests, and cannot reasonably move forward in evaluating their continued membership until Tri-State responds to those requests. Thus, the lack of clear and transparent exit provisions has allowed Tri-State to impose substantial barriers for its utility members in evaluating whether to remain in Tri-State.”

Tri-State’s CEO, Duane Highley, responded that the wholesaler would review the FERC’s order and work through the concerns.

© 2021 BizWest Media LLC