Regulatory uncertainty drives ratings changes from Moody’s Ratings, Fitch Ratings  

• Tri-State retains long-term investment-grade ratings from Fitch, Moody’s. 

• Ratings agencies cite uncertainty in federal regulatory processes. 

• Rating reports also highlight continued revenue defensibility and energy transition as strengths. 

(April 1, 2024, Westminster, Colo.) Citing continued regulatory and financial risks resulting from a Federal Energy Regulatory Commission (FERC) order in mid-March 2024 rejecting Tri-State’s wholesale rate filing, Moody’s Ratings and Fitch Ratings have lowered Tri-State’s long-term ratings but retain Tri-State's long-term ratings at investment grade levels.  

“Tri-State's ratings remain investment grade and continue to support Tri-State’s ability raise the capital needed to advance our energy transition,” said Duane Highley, Tri-State CEO. “Concerns regarding Federal Energy Regulatory Commission processes are being addressed as we will refile our wholesale rate and finalize contract termination payment for withdrawing members.” 

On March 15, 2024, FERC rejected Tri-State’s wholesale rate filing, and Tri-State will address the issues raised by FERC and re-file the rate. The issues raised by FERC are not related to Tri-State’s cost recovery, but rather cost allocation and the unbundling of rate components.  

Fitch Ratings has lowered Tri-State’s long-term rating to BBB+, with a negative outlook, and maintained Tri-State’s commercial paper rating at F1. While Fitch directly focused concerns about unresolved regulatory issues, strengths noted by Fitch include: 

• Revenue defensibility reflecting Tri-State’s wholesale electric service contracts. 

• A strong operating risk assessment driven by consistently low operating cost burden, and sufficient and diversifying generation (i.e. adding renewables and closing coal-fired generation). 

Fitch notes factors that could lead to a positive ratings action including exhibited stability in Tri-State’s membership and successful resolution to all member-related legal and regulatory disputes. 

Moody’s lowered Tri-State long-term ratings to Baa1, citing the rejection of Tri-State's wholesale rate filing by FERC, and revised Tri-State’s outlook to Stable from Negative, reflecting expectations that Tri-State will resubmit its rate filing with the FERC this year and Moody’s view that Tri-State maintains sufficient liquidity. Moody’s noted Tri-State’s initiatives to address member concerns and recognize other factors, including: 

• Increasing renewable energy and eliminating emissions from Colorado and New Mexico coal plants.  

• Advancing contract flexibility for its members’ self-supply options. 

• Tri-State's relatively large size, revenue diversification and good liquidity profile. 

Moody’s notes factors that could lead to an upgrade include supportive and timely rate recovery from the FERC and no further wholesale power member utility withdrawals. 

“With our members, we have created tremendous momentum toward an energy transition that will provide long-term reliability and rate competitiveness, while reducing emissions and increasing flexibility to provide industry-leading optionality for local renewable energy development,” said Highley.  

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About Tri-State

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 member-owners in four states. Together with our member-owners, we deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West.  

Contact

Lee Boughey, 303-254-3555, lboughey@tristategt.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.