Tri-State Generation and Transmission Association’s board of directors has approved a 2% rate reduction for the cost of its wholesale electricity, which still must gain approval of a federal regulatory agency.
The rate reduction, which would be retroactive to March 1, will be presented as a settlement to a rate and contract filing Tri-State initially proposed before the Federal Regulatory Energy Commission in March 2020.
In addition, the settlement proposes another 2% reduction in Tri-State’s wholesale electricity rates that would go into effect in March 2022. The settlement also establishes a moratorium on any Tri-State rate increases until May 31, 2023.
Tri-State provides La Plata Electric Association with about 95% of its electricity.
Tri-State’s electric cooperative members, including LPEA, had a chance to participate in the rate-adjustment process before FERC.
“I’m pleased this settlement has come to fruition and proud that the hard work of LPEA’s staff and attorney has paid off,” said LPEA CEO Jessica Matlock. “LPEA was a leader in making this a reality, and this is a very encouraging step toward the rate reductions Tri-State has promised. We are hopeful the agreement will be considered and approved by FERC soon.”
Pending final approval from FERC, LPEA’s board of directors will begin evaluating how the change will benefit LPEA members, said Hillary Knox, LPEA vice president of member experience.
Because FERC has yet to approve the settlement, Knox said it was premature to estimate how much savings LPEA could see from Tri-State’s rate reduction.
In addition, LPEA’s board of directors has not yet met to discuss how the decreased cost for wholesale electricity might affect LPEA’s customer rates.
Knox emphasized in an email that LPEA is a leading entity driving changes forward to ensure “Tri-State delivers on promised rate decreases.”
In the email, she added, “This has been part of our three-pronged effort on our future power supply:
“1. Being the exploration of ways to improve the circumstances of our existing contract with Tri-State.
“2. Being able to explore a partial exit, and
“3. Being able to explore a full exit.”
Matthew Larson, LPEA’s attorney before FERC, said he could not comment about specific areas of the settlement that were influenced by LPEA in settlement talks because information from negotiations is privileged to participants.
“What I can say is that LPEA was really one of the leaders in making this a reality,” he said.
It’s not clear when the FERC might rule on the settlement.
“As we pursue ways to lower wholesale rates, all of our members across four states have had the opportunity to participate in FERC’s rate regulation process,” said Tri-State CEO Duane Highley in a news release.
Lee Boughey, Tri-State vice president of communications, said Tri-State’s board of directors initially announced a goal to reduce wholesale rates in January 2020. In October 2020, the board set a goal of reducing wholesale electric rates by 8% by the end of 2023.
Boughey reiterated that rate cases before FERC allow all of Tri-State’s 45 electric cooperative members across four states an opportunity to participate in the rate-setting regulatory process and therefore is superior to rate-setting before state utility boards, which usually don’t allow out-of-state stakeholders to weigh in on proceedings.
The rate reduction is identified as a goal in Tri-State’s Responsible Energy Plan, Boughey said.
Tri-State’s Responsible Energy Plan also sets goals for boosting the amount of electricity generated by clean and renewable sources and allows for more contract flexibility by member cooperatives, he said.
parmijo@durangoherald.com
