Tri-State highlights Responsible Energy Plan accomplishments at 69th Annual Meeting
- Clean energy transition rapidly advancing since January 2020 transition announcement
- Tim Rabon named as new chairman of the board of directors, succeeding Rick Gordon
- Financial and operational highlights noted at annual meeting
(August 6, 2021 – Westminster, Colo.) – With a theme of Leading the Charge, not-for-profit wholesale power supply cooperative Tri-State Generation and Transmission Association highlighted the significant and accelerating accomplishments of its Responsible Energy Plan to nearly 300 members and guests in attendance at its 69th Annual Meeting this week in Westminster, Colo.
Tim Rabon, who represents Otero County Electric Cooperative (Cloudcroft, N.M.), was elected chair of the cooperative’s board of directors, succeeding Rick Gordon, of Mountain View Electric Association (Limon, Colo.). Gordon, who served as chair since 2010, did not seek reelection but will remain on the board.
“I want to recognize Rick Gordon, whose leadership and dedication to Tri-State and our cooperative business model places Tri-State in the strong position we are in today,” said Rabon. “With the combined strength of Tri-State’s members and the talents of its employees, Tri-State is well positioned to meet the changing needs of our members, resolve the differences between our members, and continue serving reliable, affordable and responsible power to communities across the West.”
With the guidance of its board of directors, representing each of Tri-State’s utility members, Chief Executive Officer Duane Highley discussed the quickening pace of Tri-State’s transformation through its Responsible Energy Plan, highlighted by lowering wholesale electric rates to members and achieving 70% clean energy by 2030.
“Tri-State is leading the charge across the nation’s generation and transmission cooperatives to advance clean energy, lower emissions and increase contract flexibility, all while reducing wholesale rates,” said Highley. “Our cooperative business model, which remains a ‘movement’ that empowers rural communities, enables our successful transition and remains strong and relevant today.”
In his last report to the Tri-State membership as chair, Gordon discussed the value of Tri-State to its members.
“The cooperative model makes it possible for our members to accomplish much more together than they could accomplish on their own, while still being autonomous and responsive to their consumers,” said Gordon. “It allows 42 individual utility members, often with different ideas, needs and opinions, to work together to create solutions to the toughest of challenges. This is the value that Tri-State has delivered from day one and continues to provide today.”
Responsible Energy Plan delivering members clean energy, reduced emissions to the membership
With the completion earlier this year of the first of eight new wind and solar projects to be constructed for Tri-State by 2024 under its Responsible Energy Plan, the clean energy consumed by Tri-State’s members rose to 36% in June 2021, with 50% clean energy forecast by 2024.
“Members of Tri-State benefit today from an increasingly clean and reliable energy supply that is more than a third renewable today and rising to 50% clean energy in just over two years,” said Highley. “By 2030, 70% of the energy our members use will come from clean, zero-emission resources.”
Within the electric resource plan filed by Tri-State with the Colorado Public Utilities Commission in December 2020, system-wide clean energy consumed in Tri-State’s preferred scenario will reach 70% by 2030.
Generation of electricity from coal is significantly reduced with the retirement of Escalante Station, Tri-State’s remaining New Mexico coal-fired power plant, in August 2020. Craig Station in northwest Colorado will fully retire by 2030. Tri-State is focused on supporting its employees and rural communities affected by the rapid transition from coal resources.
“As a co-op, we care deeply for the employees and communities that have long provided reliable power for our members,” said Highley. “Our work to support coal-reliant communities includes direct financial support for employees, meaningful grants for community investment and economic development, and creating new tax base through renewable energy projects near retiring coal facilities. Additionally, we’re working with stakeholders to secure federal rural community assistance for cooperatives and the communities they serve.”
Wholesale electricity rates reduced for Tri-State’s members
At a time when other electric utilities are increasing rates, Highley reported Tri-State is reducing its wholesale rates to its members 4% over the next year.
“Tri-State not only reduced wholesale rates to our members, but our diverse resource mix protected our members during the severe February 2021 weather event that pushed other electric utilities’ rates even higher,” said Highley.
Tri-State reduced its wholesale power rates 2% in March 2021, to be followed by another 2% wholesale rate reduction in 2022, as part of a settlement of its first major rate case since becoming subject to rate regulation under the Federal Energy Regulatory Commission in September 2019. Following Tri-State’s wholesale rate reduction, several of Tri-State’s utility members have either reduced their retail rates or increased patronage capital refunds to consumer-members. Unlike other utilities in the region, the February 2021 winter storm had an immaterial financial impact on Tri-State.
Contract flexibility advancing self-supply options for Tri-State members
Led by its members, Tri-State is advancing flexible contract options that provide for increasing the local member self-supply of power. An open season for member self-supply was completed in May 2021, with three members submitting nominations for an aggregate of 209 megawatts of self supply.
“Our members and board of directors have worked diligently to develop a fair and equitable process to increase contract flexibility to meet some members’ desire to self-supply more of their own power,” said Highley. “The conclusion of the open season is another significant step forward in that process, and we continue to work through the FERC process to implement partial requirements.”
Tri-State filed the partial requirements option with the FERC for approval. Members that participated in the open season can self-supply up to 50% of their requirements.
Tri-State joins energy imbalance markets, advances western regional transmission organization
With the recognition that organized markets are necessary to reliably, affordably and responsibly meet its members’ goals, Tri-State entered two energy imbalance markets in early 2021. Tri-State is a leading proponent of organized markets in the west, and along with other regional power suppliers is evaluating the benefits of participation in a western regional transmission organization.
“Tri-State is transforming the way we operate, including leading the charge toward participating in an expansion of the Southwest Power Pool regional transmission organization,” said Highley.
Southwest Power Pool (SPP) CEO Barbara Sugg addressed Tri-State’s membership, discussing the benefits of organized markets and the regional transmission organization’s strong performance on low electric rates and high renewable energy penetration. Currently, 80% of Tri-State’s load is within an organized market, either the SPP regional transmission organization or SPP and CAISO energy imbalance markets.
Strong financial performance in 2020 despite worldwide pandemic
At the annual meeting, Treasurer Stuart Morgan of the Wheat Belt Public Power District in Sidney, Neb., reported on the association’s financial performance in 2020. Tri-State reported revenues of $1.4 billion, a net margin of $25 million and a reduction in long-term debt. Despite widespread impacts to energy sales from the pandemic, Tri-State continued to return capital to its membership, which is a hallmark of the not-for-profit cooperative business model.
“In 2020, Tri-State returned $30 million to the membership in a retirement of patronage capital,” said Morgan. “Since our inception in 1952, Tri-State has allocated approximately $1.5 billion of patronage capital to our members and has returned $445 million.
“Tri-State’s continued focus toward reducing operating expenses, increasing revenues, and maintaining reasonable rates will ensure our ability to meet members’ expectations,” said Morgan.
Executive Committee officers elected
Following the annual meeting, the executive committee of the association's board of directors was seated, including the six officers and three at-large positions.
In addition to the election of Rabon as chairman of the board, Don Keairns representing San Isabel Electric Association (Pueblo West, Colo.) was elected to the position of vice chairman.
Julie Kilty, who has represented Wyrulec Company (Torrington, Wyo.) on the Tri-State board since 2012, was re-elected to the position of secretary.
Stuart Morgan, who has represented Wheat Belt Public Power District (Sidney, Neb.) on the Tri-State board since 2007, was re-elected treasurer - a position he first assumed in 2012.
Matt Brown, who has represented High Plains Power (Riverton, Wyo.) on the Tri-State board since 2010, was re-elected assistant secretary. Scott Wolfe, representing San Luis Valley REC (Monte Vista, Colo.) was re-elected assistant secretary; Wolfe joined Tri-State's board of directors in 2008.
The Executive Committee's three at-large positions were seated with incumbents Wayne Connell representing Central New Mexico Electric Cooperative (Mountainair, N.M.), and Shawn Turner, representing The Midwest Electric Cooperative (Grant, Neb.) Thaine Michie was elected to the remaining at-large position on the board; he represents Poudre Valley Rural Electric Association (Fort Collins, Colo.).
Tri-State is 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.
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.