Federal Energy Regulatory Commission filing supports Tri-State clean energy initiatives

• Single rate regulator benefits members as Tri-State develops Responsible Energy Plan
• FERC rate regulation aligns Tri-State with rate regulation of other wholesale power providers
• Tri-State will continue to comply with resource planning, renewable energy and environmental issues

(July 23, 2019 – Westminster, Colo.) Tri-State Generation and Transmission Association has made tariff application filings with the Federal Energy Regulatory Commission. Tri-State expects the FERC to accept the filing in 60 days. When the filing is accepted, Tri-State will be fully rate regulated by the federal commission. 

The FERC filing follows Tri-State’s July 17 announcement of its Responsible Energy Plan. As Tri-State develops the plan, consistent and predictable rate regulation is critical.

“Tri-State is positioning our cooperative for the future,” said Duane Highley, Tri-State’s chief executive officer. “Rate regulation certainty is necessary as we accelerate our pursuit of renewable energy and member flexibility, decrease emissions and strive to lower members’ wholesale rates.”

In July, Tri-State’s board of directors adopted a new mission statement that added the principle of responsibility, and approved significant and meaningful actions to further the association’s clean energy transition. These actions include:

• Developing a Responsible Energy Plan to comply with aggressive carbon reduction, renewable energy and resource planning requirements. The plan will ensure reliability and affordability, while striving to lower wholesale rates and maintaining Tri-State’s strong financial position.
• Engaging with former Colorado Governor Bill Ritter and the Center for the New Energy Economy to facilitate a stakeholder process that will contribute to the Responsible Energy Plan.
• Creating more flexibility for members to develop local renewable energy by revisiting the types of memberships and contracts Tri-State offers.
• Increasing renewable resources, with new wind and solar projects announced in January and issuing Tri-State’s sixth request for proposals for renewable energy in June.
• Exploring opportunities with solar and energy services providers to make more community-scale solar, energy storage and electric vehicle infrastructure available to our members at a lower cost.
• Announcing the retirement of Nucla Station, a coal-fired power plant in Western Colorado, in early 2020. To support the community though the transition, Tri-State will provide $500,000 in community support spread across five years.

“Our membership and board are unified in our pursuit of a cleaner, reliable and lower-cost resource portfolio,” said Rick Gordon, chairman of the cooperative’s board of directors. “We are making a strong and unequivocal commitment to transform Tri-State’s resource portfolio in a prudent and responsible manner.”

U.S. wholesale power suppliers are rate regulated by the FERC with few exceptions. Tri-State will add new members, which removes the cooperative’s exception from rate regulation by FERC. 

“FERC rate regulation is the norm for wholesale power suppliers and places Tri-State on the same level playing field as other regional utilities,” said Highley. 

Rate regulation by FERC does not change compliance with other facility-related state requirements, including resource planning, compliance with renewable portfolio standards, state carbon reduction plans, the building of new facilities and the retirement of existing facilities.

“Tri-State complies with state environmental, renewable energy and resource planning requirements, and will continue to do so under FERC rate regulation,” said Highley. “Tri-State is committed, and we are also required, to work with all state regulatory agencies, including the Colorado Public Utilities Commission on resource planning and the Colorado Air Quality Control Commission on carbon reduction planning.”

Tri-State has considered FERC regulation since 2010, as both Colorado and New Mexico exercised wholesale rate jurisdiction over Tri-State, which resulted in increased costs, unrecovered revenue and inconsistent rates to its members. FERC rate regulation pre-empts individual state rate regulation for generation rates, transmission rates, rate design and all other rate-related matters.

“If Tri-State is to be rate regulated, it makes sense to be regulated by a single regulatory body that would apply consistent rates to Tri-State’s members in each of our four states,” said Highley.  

Under FERC, Tri-State would be fully rate regulated for the first time. FERC regulation would eliminate costs of inconsistent, case-by-case state regulation of Tri-State’s wholesale rates and, with FERC’s formula rates, provide a higher level of rate certainty. Tri-State would be fully rate-regulated on generation and transmission rates, securities approvals, interlocking directorates, the sale of assets, and mergers and acquisitions.