Tri-State reviewing FERC order on Contract Termination Payment tariff
(December 19, 2023, Westminster, Colo.) The Federal Energy Regulatory Commission has issued an order on Tri-State’s contract termination payment (CTP) tariff proceeding. Tri-State is reviewing the Commission’s order, which includes the Commission’s Adopted Balance Sheet Approach (BSA) method for calculating a CTP and procedures related to the CTP.
The Commission’s 246-page order affirms in part, reverses in part, modifies in part, and clarifies in part an Initial Decision addressing the CTP and its procedures issued by a FERC administrative law judge in September 2022.
Tri-State’s review of the Commission’s order will include an analysis of the CTP methodology and its inputs to calculate the payment that a utility member must pay to terminate its contract early and withdraw from Tri-State membership.
Given the significance of the Commission’s order on Tri-State’s membership, a thorough review of the order is prudent and necessary. Tri-State will continue with its review and analysis, with FERC ordering Tri-State to make a compliance filing within 30 days of the date of the order.
However, FERC notes in its order “that the Adopted BSA methodology is likely to lead to larger CTP payments than the DCO,”1 referencing members’ debt coverage obligations. Tri-State notes that it filed in March 2022 with FERC that United Power’s DCO is $736.4 million.
United Power and Northwest Rural Public Power District have each submitted an unconditional notice to terminate their wholesale electric service contracts and withdraw from Tri-State membership as of May 1, 2024. Mountain Parks Electric has submitted an unconditional notice to terminate its wholesale electric service contract and withdraw from Tri-State membership as of Feb. 1, 2025.
The docket number is ER21-2818-000.
1 FERC Order on Initial Decision, Dec. 19, 2023, p. 226
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. Visit www.tristate.coop.
Lee Boughey, VP Communications, firstname.lastname@example.org, 720-670-6696
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