Federal regulators request additional information on non-networked transmission cost allocation
Federal Energy Regulatory Commission seeks additional information related to the cost allocation of non-networked transmission facilities in order to process Tri-State’s wholesale rate filing.
With strong financial position and liquidity, Tri-State remains financially sound as it seeks implementation of new wholesale rate.
Member-developed formulary rate design ensures sufficient revenues to cover cost of service and meet financial goals as Tri-State continues to manage costs, advance clean energy transition.
(December 29, 2023 – Westminster, Colo.) The Federal Energy Regulatory Commission has requested additional information related to the cost allocation of non-networked transmission facilities, which is a component of a proposed wholesale rate design for not-for-profit wholesale power supply cooperative Tri-State Generation and Transmission Association.
Tri-State’s member-developed wholesale rate design, a component of which addresses the cost allocation of non-networked transmission facilities, was recommended by the Tri-State membership’s Rate Design Committee in April 2023, and approved by Tri-State’s Board of Directors in June 2023. Tri-State filed the wholesale rate with the FERC on June 16, 2023, requesting an effective date of Jan. 1, 2024.
In its proposed wholesale rate, Tri-State’s membership supported bundling the costs of non-networked transmission facilities, which generally include radial transmission facilities that serve a single member. A subsequent Commission order directed that Tri-State could perform an evaluation and provide support for bundling those costs, without directing the type of evaluation. On Nov. 3, 2023, Tri-State amended its wholesale rate filing, including offering further support for continuing to bundle the costs of the non-networked transmission facilities.
In a deficiency letter dated Dec. 29, 2023, the Commission sought additional information related to the cost allocation of non-networked transmission facilities in order to process Tri-State’s wholesale rate filing.
“We will provide the Commission with additional information requested on non-networked transmission cost allocations, and while we are disappointed that other components of our wholesale rate were not approved today, we remain confident that the Commission will ultimately accept our formulary wholesale rate design,” said Duane Highley, Tri-State CEO. “We also understand the Commission’s concerns and will work to ensure our wholesale rate serves our members’ needs and FERC rate-making practices.”
As directed by FERC in its letter, Tri-State will make an amendment filing within 30 days, after which Tri-State expects the Commission to take action on the amended filing within 60 days.
Tri-State will continue to collect revenue from its utility members under the existing wholesale rate.
“With a strong financial position and liquidity, Tri-State will continue to operate a reliable system, collecting revenue under our current wholesale rate, with the intent to ensure that Tri-State recovers its full revenue requirement in 2024 as it transitions to a FERC-approved formulary rate,” said Highley. “Our goal remains to recover the costs necessary to reliably and affordably advance our clean energy transition, even as we manage costs and increase our competitiveness.”
On Dec. 1, Tri-State filed a transformative electric resource plan that leverages potential federal funding, new direct pay clean energy tax credits, and the cooperative’s strong financial position to make its largest ever investment in new resources. Tri-State's preferred plan adds 1,250 megawatts of renewable resources and energy storage, significantly reduces greenhouse gas emissions, and preserves reliability and affordability.
Following a seven-year period with stable and then 4% lower wholesale rates for its members, Tri-State's board of directors, representing its utility members, approved a 6.36% increase in the average Class A wholesale rate to go into effect Jan. 1, 2024. The budgeted 2024 wholesale rate reflects a net increase of 1.4% from the actual average Class A wholesale rate paid by members in 2017, which is approximately 0.2% annualized, significantly below the rate of inflation over the seven-year period.
The proposed wholesale rate maintains Tri-State’s postage stamp rate, with the same rate components for all members. The formulary rate can be adjusted annually based on the budgets approved by Tri-State’s board, including an annual true-up mechanism. Wholesale rates are set as low as is possible to collect revenues to cover Tri-State’s cost of service and meet all financial goals, with excess revenues allocated and eventually returned to members. In 2023, Tri-State’s Board of Directors voted to return $10.37 million to its members.
Tri-State is a power supply cooperative of 45 members, operating on a not-for-profit basis, including 42 utility electric distribution cooperative and public power district members in four states that together deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. For more information about Tri-State, visit www.tristate.coop.
Lee Boughey, 303-254-3555, firstname.lastname@example.org
Certain information contained in this press statement are forward-looking statements including statements concerning Tri-State’s plans, future events, and other information that is not historical information. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described from time to time in Tri-State’s filings with the Securities and Exchange Commission. Tri-State’s expectations and beliefs are expressed in good faith, and Tri-State believes there is a reasonable basis for them. However, Tri-State cannot assure you that management’s expectations and beliefs will be achieved. There are a number of risks, uncertainties and other important factors that could cause actual results to differ materially from the forward-looking statements contained herein.