Tri-State Generation and Transmission, Southwest Colorado’s electricity supplier, voted Tuesday to pursue federal regulation of its rates, despite a request by electrical co-op members and state lawmakers for a delay.
Lawmakers asked for more time to determine if the change would undermine the state’s ability to oversee Tri-State’s plans for future renewable energy projects.
Tri-State is interested in federal regulation because it would eliminate inconsistent rules governing Tri-State’s electrical rates across states, according to CEO Duane Highley. Tri-State operates in Colorado, Nebraska, New Mexico and Wyoming.
“Our cooperative will benefit from lower costs and greater efficiency by having a single, consistent rate regulator across all the states in which we operate,” said Tri-State Chairman Rick Gordon, in a prepared statement.
Tri-State’s board is made up of 43 electrical co-ops, including La Plata Electric Association, that own and govern Tri-State.
Representatives from two co-ops voted against pursuing federal regulation, said Tri-State spokesman Lee Boughey. He declined to name the co-ops that voted “no.”
Tri-State had been exempt from federal rate regulation because it was wholly owned by small electrical cooperatives. At Tuesday’s board meeting, members voted to add new members that are not small electrical cooperatives, which makes Tri-State no longer exempt from federal regulations, according to a news release.
Xcel Energy and Black Hills Energy, other utilities that operate in Colorado, are subject to similar federal regulation of their wholesale rates, according to Tri-State.
Federal regulation would eliminate state jurisdiction over co-ops interested in buying out of their contracts with Tri-State, such as LPEA.
LPEA has been exploring a buyout of its Tri-State contract, in part because Tri-State caps how much renewable power LPEA can purchase from outside sources at 5%.
However, if a buyout case was handled at the federal level, it could be more expensive and time-consuming than if it were heard at the Colorado Public Utilities Commission, said Erin Overturf, deputy director of the Clean Energy Program for Western Resource Advocates, in a previous interview.
In recent weeks, LPEA, other electrical co-ops and state lawmakers urged Tri-State to delay a vote until the consequences of federal rate regulation could be better understood.
LPEA asked Tri-State in a formal letter to explain the full cost of federal regulation and why it was pursuing the change now, among other details.
State lawmakers also asked Tri-State in a letter for more time to understand how the new rates may prevent agencies such as the PUC and state Legislature from “ensuring Coloradans pay just, reasonable and nondiscriminatory rates.”
The letter also expressed concern the change could hurt the state’s ability to oversee Tri-State’s plans for future clean energy production.
Tri-State’s Highley said federal regulations wouldn’t interfere with Colorado’s renewable energy regulation.
“Tri-State is committed to reducing emissions, expanding renewables, lowering costs to our members and creating opportunities in all the states we serve,” Highley said.