Tri-State Board of Directors approves 2024 budget, wholesale rate design

• After seven years of flat and lower wholesale rates for members, board approves 6.36% rate increase.
• Power supply cooperative’s Class A wholesale rates to increase a net of 1.4% from 2017 to 2024.
• Member-developed formulary rate design to be filed with the Federal Energy Regulatory Commission.

(June 5, 2023 – Westminster, Colo.) Following a seven-year period with stable and then lower wholesale rates for its members, the board of directors of Tri-State Generation and Transmission Association has approved the power supply cooperative’s 2024 operating budget with a 6.36% increase in the average Class A wholesale rate intended to go into effect Jan. 1, 2024.

Tri-State has not increased its wholesale rate for its members in seven years, with the wholesale rate flat from 2017 into 2021, and then reduced a total of 4% in March of 2021 and 2022, remaining lower in 2023.

The new rate reflects a net increase of 1.4% from the actual average Class A wholesale rate paid by members in 2017 to the 2024 budgeted average Class A wholesale rate, which is approximately 0.2% annualized. The wholesale rate increase is significantly below the rate of inflation over the seven-year period.

“Tri-State has bucked electric utility industry trends for large rate increases for seven years, while actually lowering our members’ wholesale rates,” said Duane Highley, Tri-State CEO. “Through record inflation, higher fuel and energy prices, and supply chain pressures, we’ve maintained increasingly competitive wholesale rates and kept our first rate increase since 2017 well below the rate of inflation.”

Tri-State’s board also approved a new wholesale rate design for filing with the Federal Energy Regulatory Commission. As a cooperative, Tri-State’s members design their own wholesale rates, which are approved by the board of directors, including a representative from each utility member. Wholesale rates are set as low as is possible, with excess revenues allocated and eventually returned to members.

Uniquely, Tri-State’s Class A wholesale rate includes all of the costs to deliver a reliable, affordable and increasingly clean supply of power into members’ distribution systems, including energy, capacity, transmission and ancillary services, and a wide range of other products and services.

The membership’s Rate Design Committee began its work in February 2022, holding 14 meetings through April 2023. The committee was chaired by Don Keairns, director at San Isabel Electric Association (Pueblo West, Colo.), with Otero County Electric Cooperative (Cloudcroft, N.M.) General Manager and CEO Mario Romero serving as vice chair, and included representatives from all utility members, including member-system board members, and member-system CEOs and Tri-State board members.

The new wholesale rate maintains Tri-State’s postage stamp rate, with the same rate components for all members, and incorporates a new formulary rate, which can be adjusted annually based on the budgets approved by Tri-State’s board, including an annual true-up mechanism. The rate design incorporates FERC wholesale rate design principles, while also reflecting Tri-State’s unique position as a not-for-profit cooperative power supplier.

“Tri-State’s members worked together to develop and democratically approve their new wholesale rate,” Highley said. “With FERC approval, Tri-State will be able to recover the costs necessary to reliably and affordably advance our clean energy transition.”

Rooted in preserving reliable and affordablepower, Tri-State’s clean energy transition includes an additional 735 megawatts of solar power in 2024 and 2025, when 50% of the energy consumed by its members will come from renewable resources. In Colorado, Tri-State is targeting an 80% reduction in greenhouse gas emissions by 2030, associated with wholesale electricty sales relative to a 2005 baseline.

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 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.