FERC rejects United Power’s approach to leaving Tri-State

WESTMINSTER — The Federal Energy Regulatory Commission has rejected United Power’s bid to leave the Tri-State Generation and Transmission Association on a nonbinding, conditional basis. 

A press release from Tri-State says provisions allowing utilities to leave the cooperative were adopted in November of 2021, around a month before United Power announced plans to leave. 

United Power announced in December it plans to leave Tri-State by January of 2024 but has argued that the $1.6 billion exit fee it would incur upon doing so is not justified. A ruling from the Federal Energy Regulatory Commission filed Dec. 21, 2021, found arguments from United Power to be unavailing. 

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If United Power were to still leave Tri-State, it would have to do so unconditionally. The Federal Energy Regulatory Commission found that high exit fees could deter larger customers from leaving cooperatives. Departures of larger customers from cooperatives could leave smaller members at a disadvantage, according to briefs filed by Tri-State and the Federal Energy Regulatory Commission.

Documents filed April 20 by the Wabash Valley Power Association continue this pattern, stating United Power is not exempt from paying the full exit rate. While the Indiana-based utility is in its own dispute with Tipmont Rural Electric Cooperative, it pointed to United Power’s attempts to leave Tri-State as lacking grounds.

“United Power erroneously claims that a commission declaratory order affirming its exclusive jurisdiction over an exit fee charged by a commission-jurisdictional electric cooperative contains language that establishes a commission policy on a just and reasonable exit fee. The cited declaratory order does not address that rate issue, however, and is irrelevant in this rate proceeding where no participant contests the commission’s jurisdiction,” 

Calls to United Power and Tri-State were not returned by press time.

United Power is one of Colorado’s largest utilities. It is only the second utility in the state to surpass more than 100,000 meters served. Since its founding in 1938, it has provided power to rural communities in Colorado.

United Power has pointed to high energy rates and a requirement to purchase 95% of its electricity from Tri-State as key drivers of the decision to leave. United Power contends rates charged by Tri-State are above market rate. In its annual meeting April 6, Tri-State announced it had decreased its rates by 4% in 2021.