Tri-State and PUC

When a company is given the right to monopolize a particular market, that unfettered access to customers must carry with it some responsibilities. Without such checks, there is no guarantee that malfeasance will not take place. Customers with nowhere to turn can be poorly served without recourse. For better or worse, this premise underlies the nation’s regulatory environment. There are nuances and exceptions, of course, but Tri-State Generation and Transmission’s attempts to excuse itself from the Colorado Public Utility Commission’s oversight do not qualify. The commission absolutely should have authority to review complaints about Tri-State’s rates.

Tri-State, the nonprofit electricity provider for La Plata Electric Association and Empire Electric, disagrees, pitting the generation and transmission giant against several of its smaller member cooperatives including LPEA and Empire, as well as some of its high-volume private customers. The ratepayers are crying foul over Tri-State’s rate increase for customers who received a price break for energy used during off-peak hours. Their complaint has fallen on deaf ears at Tri-State, so they are appealing to the PUC and insisting that the rate be overturned. Tri-State, which is owned by 44 rural electric co-ops in four states, maintains that the board sets its rates, has only its customers and owners to answer to, and the PUC should mind its own business with respect to rate-setting.

But protecting consumers and ensuring that public utilities are properly managed is exactly the PUC’s business. The Colorado Department of Regulatory Affairs describes the PUC thusly: “The Public Utilities Commission has full economic and quality of service regulatory authority over intrastate telecommunication services and investor-owned electric, gas and water utilities, as well as partial regulatory control over municipal utilities and electric associations.” The rate complaint seems to meet that threshold of oversight.

Whether the rate increase sticks is a secondary question, but a no less critical one. Efficiency is a fundamental component of addressing energy needs and costs and offering incentives to use electricity more smartly by discounting off-peak usage is an effective means of improving that efficiency. It evens the electrical distribution load and fosters awareness of kilowatts used – the first step toward reducing that amount. LPEA, Empire and their partners in the complaint are right to support their customers who use the off-peak option. It is in keeping with LPEA’s mission to provide “safe, reliable electricity at the lowest reasonable cost while being environmentally responsible,” to push back against Tri-State’s decision to raise the off-peak prices, regardless of the larger utility’s claim that its members have nothing to complain about given the low prices they already enjoy. The smaller co-ops and industrial customers such as Kinder Morgan, BP and ExxonMobil think differently and should absolutely advocate for incentives to be efficient. Doing so is to Tri-State’s benefit as well.

The first step in the impasse, though, is to determine whether the PUC can review the rates. It seems wholly appropriate – obvious, even – for the board charged with regulating utility rates and service to do so.

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