S&P Global Ratings changes Tri-State issuer rating, maintains stable outlook

• Ratings report cites recent filing by seven members with FERC.
• Tri-State working with members, and through established regulatory process, to address issues.
• Cooperative focused on long-term, clean energy transition and greater member flexibility.

(April 9, 2021 – Westminster, Colo.) S&P Global Ratings issued a rating report that changed Tri-State’s issuer rating to BBB+ from A-, with a stable outlook. Tri-State’s rating remains classified as investment grade and comparable to the ratings of other investor-owned and cooperative utilities in the region. 

“Tri-State’s member-led transformation to be cleaner, more affordable and more flexible creates new opportunities for powering rural communities, but also brings challenges and uncertainties that are reflected in changes to our investment-grade credit ratings,” said Tri-State CEO Duane Highley. “A complex effort like this does not happen overnight, but there is a long-term plan to transform the association and address the issues raised by the rating agency.”    

The S&P ratings report states concerns about a complaint filed with the Federal Energy Regulatory Commission (FERC), made by seven of Tri-State's member electric distribution systems, that seek the calculation of a contract termination payment (CTP) under a methodology developed by Tri-State’s members and approved by Tri-State’s board of directors. S&P notes that the parties’ filing “does not constitute a notice to terminate the wholesale power contracts” and that “early contract terminations are not imminent.”

“We are working with our members and through established regulatory processes to advance our transition and provide contract flexibility that protects the interests of all members,” Highley said. 

Providing the cost required for members to pay for the early termination of their wholesale power contract, or changing their contract to a partial requirements contract, is part of a broad transformation of Tri-State to provide more flexibility for members and transition Tri-State to cleaner resources and lower greenhouse gas emissions. Tri-State is encouraged by the progress made over the last few months and believes there is an opportunity to provide flexibility to those members that desire it, while protecting the financial interests of those members that wish to continue under their current contracts. 

“Our focus remains on the long term and our mission to deliver reliable, affordable and responsible power to our members,” Highley said.  “While it will take time, when our transition is complete, I believe Tri-State will be a leader in the cooperative world and recognized as the most competitive power supply option for our members.”

In early March, S&P Global Ratings raised Tri-State’s long-term outlook to stable from negative. Tri-State’s ratings remain classified as investment grade. S&P's previous rating action in March cited Tri-State’s improved regulatory landscape, and favorably viewed its carbon reduction strategy. 

In January 2020, Tri-State released its Responsible Energy Plan, a clean energy transition that expands renewable generation and reduces greenhouse gas emissions while ensuring reliable, affordable and responsible electricity for its members and their communities. 

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About Tri-State
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. 

Contact:
Lee Boughey, 303-254-3555, lboughey@tristategt.org
Mark Stutz, 303-254-3183, mstutz@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.