Tri-State asks court for judgment concerning DMEA efforts to withdraw from association membership

Tri-State Generation and Transmission Association filed a complaint on January 15, 2019, in the District Court in Adams County, seeking a declaratory judgment concerning Delta-Montrose Electric Association’s efforts to withdraw from membership in the cooperative power supplier.

The complaint asks the court to clarify Tri-State’s rights and DMEA’s obligations under the association’s bylaws. It also asks the court to confirm that the Colorado Public Utilities Commission does not have authority to decide this contract dispute between Tri-State and DMEA. On December 6, 2018, DMEA filed a complaint at the Colorado commission.

“The complaint asks the court to protect our membership from DMEA’s efforts to break its contract and shift its financial obligations to our other members,” said Mike McInnes, chief executive officer of Tri-State. “We believe the court will confirm our board's authority to determine the terms and conditions under which a member may withdraw from our association.”

The Tri-State complaint arises from DMEA’s efforts to withdraw from Tri-State in violation of the association’s bylaws and to break its all-requirements contract. DMEA entered freely into the contract in 1992 and affirmed the contract in 2001. The contract between Tri-State and DMEA extends through the year 2040.

“When a member voluntarily joins the association and signs a long-term power purchase contract, Tri-State becomes responsible to plan, finance, build, operate and maintain a complex system that reliably delivers power to the member over the contract term,” said McInnes.  “Just as our members expect Tri-State to fulfill its responsibilities under the contract, our members expect one other to fulfill their own obligations through the end of the contract term.”

“A significant majority of our members, which operate in four states, believe that the Colorado Public Utilities Commission is not the proper forum for this issue to be considered,” said McInnes. “This is a corporate governance and contract issue that appropriately belongs in the courts.”

“It is unfortunate that we have to resolve this issue through litigation,” said McInnes. “However, since DMEA has chosen not to continue to negotiate and instead filed a complaint to start litigation, this was a necessary step for Tri-State to take.”