S&P Global Ratings raises Tri-State's outlook to stable, affirms investment grade ratings 

• Ratings agency cites contract termination payment tariff, debt reduction, energy transition and formulary wholesale rate in reducing power supply cooperative’s credit risk profile. 

• Tri-State increasing certainty with Federal Energy Regulatory Commission contract termination payment tariff order, acceptance of formulary wholesale rate. 

• Energy transition is advancing, with significant carbon emission reductions and potential for federal funding. 

(August 1, 2024, Westminster, Colo.) As Tri-State Generation and Transmission Association increases certainty and stability through the advancement of its energy transition, S&P Global Ratings has raised Tri-State's outlook to stable and affirmed the cooperative’s long-term rating at BBB and commercial paper rating at A-2. Tri-State continues to maintain investment-grade ratings with all three rating agencies. 

In raising Tri-State’s outlook, S&P noted several factors that reduce the not-for-profit cooperative power supplier’s credit risk, including Tri-State’s contract termination payment (CTP) tariff, energy transition and reduced carbon exposure, the potential benefits of federal funding, and the implementation of Tri-State’s formulary wholesale rate.  

“In every step forward, we are establishing greater certainty and clarity for our membership, while maintaining power reliability and affordability, and advancing our energy transition,” said Tri-State Chief Executive Officer Duane Highley. “The raising of our outlook acknowledges the progress we are making to meet our membership’s needs for decades to come.” 

S&P highlighted Tri-State’s Federal Energy Regulatory Commission (FERC)-ordered CTP tariff, including Tri-State's receipt of a CTP from United Power on May 1, 2024. United Power’s CTP was $709 million, with a credit for discounted patronage capital, resulting in the cash payment to Tri-State of $627 million. S&P notes the CTP could stabilize Tri-State' membership and reduce interest in contract terminations, and that CTP proceeds will be used to reduce Tri-State’s debt and offset the cost of Tri-State’s capital development plans. 

The carbon reduction benefits of Tri-State’s energy transition were recognized by S&P. 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, adds dispatchable resources, significantly reduces greenhouse gas emissions, and preserves reliability and affordability. 

S&P notes that federal funding could provide access to favorably priced financing for portions of Tri-State’s energy transition capital investment plan. Tri-State is pursuing funding through the U.S. Department of Agriculture’s New ERA Program and has submitted a full application at the USDA’s invitation. 

On July 30, FERC accepted Tri-State’s formulary wholesale rate filing, which S&P notes, allows Tri-State to implement, as of Aug. 1, 2024, a 6.3% increase in average member wholesale rates. Tri-State had stable or lower wholesale rates since 2017. With the formulary wholesale rate, Tri-State has certainty to collect revenues to cover its cost of service and meet all financial goals, while managing costs and maintaining competitive wholesale rates. 

“Tri-State's strengthening financial position provides the financial agility to ensure we can meet our members’ goals,” said Tri-State’s Chief Financial Officer Todd Telesz.  

About Tri-State 

Tri-State is a power supply cooperative with 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 rural West. For more information about Tri-State, visit www.tristate.coop.  

Contact: 

Lee Boughey, VP Communications, 720-670-6696, lee.boughey@tristategt.org 

Mark Stutz, 303-254-3183, mark.stutz@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.