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Energy

Fearing Tri-State could duck clean-energy goals, Colorado utilities commission files unprecedented protest

For the first time in at least 25 years, state regulators move to stop a migration, saying the interstate power provider has too much unfinished business here

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The Colorado Public Utilities Commission has filed a protest with federal regulators seeking to block the bid by the power provider for rural electric cooperatives to jump from state to federal oversight.

The proposed switch by Westminster-based Tri-State Generation and Transmission Association is “procedurally unsound, premature, incomplete and jurisdictionally problematic,” the PUC said in its protest.

In the last 25 years the PUC has never intervened in a case before the Federal Energy Regulatory Commission, according to commission spokesman Terry Bote. He said he did not know if it ever had.

“The PUC took this step because the state has a responsibility to protect its jurisdiction,” Bote said in an email. “There are matters yet to be resolved before the PUC that are pertinent to Tri-State’s filing, and such resolution needs to precede FERC action.”

Tri-State is reviewing the protest, association spokesman Lee Boughey said in an email.

“This is a fairly aggressive stand by the Colorado PUC,” said Ellen Kutzer, a utility attorney with the environmental group Western Resource Advocates. “It will definitely leave a mark on the FERC commissioners.”

On July 9, Tri-State Generation and Transmission Association — which serves 43 electric co-ops in four states, including 18 in Colorado – filed a rate application with FERC, which would give oversight of rates and contracts to the federal agency. 

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Of the 43 co-ops only DMEA, the La Plata Electric Association in Durango and United Power based in Brighton, opposed the move.

The move by Tri-State to switch jurisdictions came as a different case was on its way to the PUC over the effort by the Delta-Montrose Electric Association to leave Tri-State. DMEA filed a complaint with the PUC saying Tri-State was demanding a “discriminatory” exit fee.

Tri-State and DMEA reached an undisclosed settlement weeks before the case went to the PUC and DMEA will leave Tri-State early next year.

The FERC bid also came as Colorado adopted laws giving the PUC more oversight of Tri-State’s facility planning and also requiring utilities to reduce their greenhouse gas emissions 90% from 2005 levels by 2050. Tri-State gets almost half its electricity by burning coal.

“The PUC wants to make sure that Tri-State isn’t trying to go around those state efforts,” Kutzer said.

Tri-State Generation and Transmission Association gets about half the electricity it generates from coal-burning plants. The company expects to close the coal-fired Nucla Station as soon as its on-site fuel supply is spent, likely in early 2020. The massive power company also plans to retire a coal-fired electric generation unit at Craig Station by the end of 2025. (William Woody, Special to The Colorado Sun)

Tri-State operates in Nebraska, Wyoming and New Mexico, as well as Colorado, and as regulatory regimes change in each state, it made sense to seek uniform rate regulation under FERC, the utility said.

This would allow for “rate certainty and predictability going forward,” according to Boughey.

While rates and contract disputes, such as the one with DMEA, would move to the FERC, Tri-State said it would still be under state jurisdiction for the resource planning and pollution-reduction goals.

“We are committed to working with the governor, the legislature and the Colorado Public Utilities Commission to implement the state’s energy goals, including complying with Colorado’s carbon-reduction rules and working with the commission and other stakeholders through the new resource planning process for Tri-State,” Boughey said.

Nevertheless, the PUC in its protest raised questions of whether the split oversight will create problems. “There are jurisdictional issues created if the state has jurisdiction over resource plans, which Tri-State admits, and the FERC has jurisdiction over rates,” the filing said. “Will FERC honor state decisions?”

To be eligible for FERC oversight Tri-State must add a new member that is not a rural cooperative. The PUC filing said that Tri-State has never named the new member.

In the filing it said that the PUC will discuss at its Aug. 21 meeting whether the commission must approve that new member.

The protest also said that Tri-State’s long-term contracts, which limit co-ops to generating no more than 5% of their own electricity, and the association’s opposition to co-ops buying local renewable energy under the Public Utilities Regulatory Policies Act is inconsistent with FERC policies.

The PUC said considering the “significant procedural, legal and jurisdiction flaws” in Tri-State’s application, it should be dismissed by the FERC.


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