FERC filings follow Tri-State’s revised submission

WESTMINSTER and BRIGHTON — Filings with the U.S. Federal Energy Regulatory Commission show some fleshed-out details of how much it could cost electric utilities to leave a nonprofit energy wholesale group — but no agreement on how to resolve the question.

FERC on June 17 told Westminster-based Tri-State Generation and Transmission Association Inc. to provide information sought by some of the 45 member co-ops of the wholesale electricity provider.

United Power Inc. in Brighton wanted to know how much it would cost them to leave Tri-State. United has about 90,000 households on the northern Front Range and is Tri-State’s largest electricity buyer.

Poudre Valley Rural Electric Association Inc. in Windsor, Tri-State’s second largest purchaser, has participated in FERC proceedings as well. It serves about 45,000 homes and businesses.

Tri-State reported $652.3 million in operating revenue and $592.4 million in expenses for the first six months of 2021, a U.S. Securities and Exchange Commission filing said.

Tri-State on July 19 responded to FERC’s June 17 order with estimated “modified contract termination payments” and asked FERC for time to “work with its utility members to finalize, support and file … a comprehensive tariff [with] CTP Methodology and all necessary contract termination procedures.”

Several Tri-State members filed responses on Aug. 3, including Poudre Valley, which called Tri-State’s July 19 response a “major step toward meeting [the] objective” of “a just and reasonable and not unduly discriminatory methodology for determining the rate, terms, and conditions governing early withdrawal from Tri-State membership.”

United Power’s filing that day was critical of the CTP and its “unconscionable exit fees that are designed to ensure that no member can reasonably surrender its ownership interest in Tri-State.”

FERC denied Tri-State’s “motion for abeyance” on Aug. 19. It cited co-op members’ FERC filings either silent on or critical of the CTP.

Tri-State’s filing Sept. 2 included 11 pages of CTP “methodology and procedures.” United Power’s modified CTP was given as $1.63 billion and Poudre Valley’s as $787.1 million, assuming a January 2024 exit date.

A Tri-State spokesperson said the group’s modified CTP “accounts for revenue from members that leave, applies mitigating factors” — for instance if Tri-State “could sell the power on the market” — “to ensure the contract termination payment is fair.”

He said United Power would otherwise pay $5.6 billion to complete its contract through 2050 and that the amount UP has previously suggested — “its own methodology for the termination payment” — ranges from $145 million to $244 million, and “would leave our other members harmed.”

United Power said via email, “We continue to work through the proceedings to make sure the concerns of our membership are heard and that we reach a final determination that is fair and equitable.”

Poudre Valley said via email, “We believe Tri-State has an appropriate methodology but there is still work to be done. We will continue to be an active participant at FERC to ensure there is fair and reasonable CTPs for all Tri-State member-owners.”

Filings through September and early October by more than a dozen member co-ops, including United Power and Poudre Valley, as well as two by individuals, responded to Tri-State’s CTP calculations.

An Oct. 5 Tri-State filing noted FERC could conclude some of its deliberations this month, with the possible “determination in late October 2021 as to whether to accept for filing Tri-State’s Modified Contract Termination Payment (“CTP”) Methodology … to become effective Nov. 1, 2021.”

But the issue’s dockets aren’t listed on the agendas for the agency’s monthly meeting scheduled for Oct. 21. The last of this year’s meetings of the agency are Nov. 18 and Dec. 16.

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