FERC approves major Tri-State wholesale rate settlement with members
- Settlement represents a significant effort by Tri-State, its members and FERC to develop a wholesale rate that will provide certainty and financial stability for the power supply cooperative’s membership.
- Immediate 2% wholesale rate reduction in effect, with another 2% reduction by March 1, 2022.
(August 3, 2021 – Westminster, Colo.) On August 2, 2021, the Federal Energy Regulatory Commission approved a settlement in the first major rate case filed by Tri-State Generation and Transmission Association since the power supplier became subject to FERC jurisdiction in September 2019. The landmark uncontested settlement resolves key issues from regulatory filings that Tri-State made in late 2019 and 2020 regarding its rates and terms for wholesale power service to its 42 utility members in Colorado, Nebraska, New Mexico and Wyoming.
Notably, the settlement provides for an immediate reduction in Tri-State’s current wholesale rate for members, with a total decrease in rates of 4% by March 1, 2022. Tri-State has already implemented a 2% rate decrease, which went into effect on March 1, 2021 and will lower rates another 2% on March 1, 2022. Several of Tri-State’s utility members have either reduced their retail rates or increased patronage capital refunds to consumer-members, following Tri-State’s wholesale rate reduction.
The settlement also establishes a rate moratorium through May 31, 2023, with Tri-State agreeing to file a new rate case no later than Sept. 1, 2023. The settlement resolves all matters at issue in a consolidated docket that included Tri-State’s long-term wholesale electric service contracts with members, its program for a member 5% self-supply option, and a local member community solar generation program.
FERC approved the settlement, finding it to be “fair and reasonable and in the public interest.”
“We are pleased with this outcome and FERC’s approval of the settlement, which provides both a significant wholesale rate reduction and rate certainty going forward for our utility members,” said Duane Highley, Tri-State’s Chief Executive Officer. “This is a crucial step forward to achieve our goal of making Tri-State the most competitive option to meet the power supply needs of our utility members.
“Tri-State would like to thank the FERC and its staff for the work they have done on the settlement and the guidance they provided through the process,” Highley said. “We also hope it paves the way to successful resolution of our other pending cases before FERC, as we complete our transition to being a federally regulated public utility.”
The settlement was approved by Tri-State’s Board of Directors. United Power and Tri-State have agreed to ask the FERC to resolve four discrete or “reserved” issues not resolved in the settlement.
Two of the reserved issues involve rate design and cost allocation principles that will aid in Tri-State’s development of new rates for wholesale power service in its rate case filing in mid-2023. These include whether Tri-State is required to unbundle rates for wholesale power service under its wholesale contracts, and whether it must provide for direct assignment of certain costs associated with transmission services to members, rather than using a rolled-in transmission rate applicable to all members, an approach that has been in effect for nearly 70 years.
The remaining reserved issues concern a continuing challenge by member United Power to the application of a transmission demand charge for on-peak discharges from its battery storage devices, a challenge rejected by FERC in 2020, and United Power’s challenge to Tri-State’s Community Solar Program for members, a program designed to promote the participation by all members, especially smaller members in rural communities, in local solar power generation. Other than United Power’s challenge to transmission demand charges for on-peak discharges from battery storage devices , rulings on the reserved issues will be prospective, applying only to Tri-State’s next rate filing in mid-2023.
Wholesale rate reduction is a major pillar of Tri-State’s Responsible Energy Plan, which was announced in January 2020 and is expanding renewable generation and reducing greenhouse gas emissions while ensuring reliable, affordable, responsible electricity for Tri-State’s members and their communities.
“As a cooperative, Tri-State is working together with its members and taking bold steps today to create a bright future and clean grid. This settlement is a significant step toward this vision,” said Highley.
Tri-State is a wholesale power supply cooperative, operating on a not-for-profit basis, with 45 members, 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.