Opinion: Tri-State isn’t at a crossroads; it’s 3 years into a clear transition plan

The Colorado Sun writes that Tri-State Generation and Transmission Association is at a “crossroads,” focusing not on our cooperative’s members, but on Tri-State as a power supplier. That’s a dated view with the wrong focus.

Tri-State’s story is about our members, including 42 electric distribution cooperatives and public power districts, which did come to a crossroads — in 2019. Our board of directors, with a representative from each of our utility members, made the important decisions to steer the not-for-profit power supplier they own and govern, Tri-State, on a remarkable clean energy transformation that preserves reliable and affordable power for western communities across four states.

Also in 2019, our members drove unprecedented changes at Tri-State to increase contract flexibility, so that our individual utility members can secure more of their own power without harming their neighbors.

We’ve made great progress. In just over two years, our members will have a power supply that is 50% renewable energy, increasing to 70% renewables by 2030. In Colorado, greenhouse gas emissions from our members’ power supply will be reduced by 80%, supporting state climate goals.

With our members, we’re helping consumers leverage a cleaner grid through technologies like electric vehicle charging infrastructure, and more efficient home heating and cooling. As we retire coal facilities, we’re working with others toward a just transition for our employees and affected communities.

With a focus on cost reduction, over the last two years, we’ve reduced our wholesale rates, and despite inflationary cost pressures, some utility members have been able to reduce their retail rates or return more money to consumers.

Our members and stakeholders, together with policymakers. are working on Tri-State’s electric resource plans, and with other utilities across the West, we are advancing more efficient power markets so that our energy transition proceeds reliably and affordably.

Finally, our members democratically changed Tri-State’s bylaws to craft new policies that provide options for more flexible power supply contracts. This includes the opportunity for members to develop their own power resources or purchase it from others, as well as an option for members to terminate their power supply contracts years early.

Importantly, our members recognize that additional power supply contract flexibility will necessarily result in lower revenues to Tri-State. They determined that a payment would be required from a member that changes or ends its power supply contract. The intent of this payment is to leave the other members and Tri-State whole and unharmed by a member’s contract change.

These payments are critically important to implement our members’ flexibility goals and ensure our members are no better off, or no worse off, when another member changes the terms of its contract. Done right, this ensures rural electricity consumers won’t see higher costs, and Tri-State can continue to conform to its loan agreements and advance our clean energy transition.

Six Tri-State members are pursuing flexible partial supply options through the remaining terms of their contracts. These members will take at least 50% of their power from Tri-State while continuing to take 100% of their transmission services from Tri-State. This member-developed, win-win solution helps members’ meet their unique goals and, with a buy-down payment, protects other members and Tri-State. The majority of Tri-State’s members are supportive of a settlement on the buy-down payment methodology that we filed with the Federal Energy Regulatory Commission.

Two Tri-State members, including United Power, want to end their contracts with Tri-State more than 25 years early. Our members developed a process for a fellow member to terminate its contracts, with the departing member making a contract termination payment that ensures the remaining members and Tri-State are not harmed because of a members’ departure. The majority of our members and Tri-State disagree with United Power on the methodology to calculate contract termination payment, and this dispute is before the federal commission to be resolved.

Importantly, and as I discussed with The Sun, the key is for Tri-State, which represents our members, and United Power to work these issues out, so that we can all plan for our futures. A recent decision from an administrative law judge, who emphasized the importance of maintaining rate neutrality for our remaining members, gives Tri-State and United Power another opportunity to find an agreement, short of waiting for the commission’s decision. I’m hopeful we’ll continue those discussions.

Far from being at a crossroads, Tri-State is making great progress in our clean energy transition. On the important question on what fair contact termination payments should be, a third-party federal regulator is going to make that decision. I’m hopeful our members and Tri-State can resolve this issue, and if we can’t, I have total confidence in the Federal Energy Regulatory Commission’s ability to make a fair decision for all parties.

Duane Highley, of Erie, is CEO of Tri-State Generation and Transmission Association.