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Tri-State sets goal to reduce wholesale rates

Electricity provider opens path for more renewable power generation
Tri-State Generation and Transmission, the electricity provider to La Plata Electric Association, has set a goal to reduce wholesale power rates 8% by 2023.

Tri-State Generation and Transmission Association board of directors has adopted a goal to reduce its wholesale electric rates for member utilities by 8% by the end of 2023.

The board of directors also adopted procedures that allow member cooperatives – which include La Plata Electric Association, the electric cooperative serving La Plata and Archuleta counties – greater flexibility to supply more local power by creating partial-requirements contracts, an “open season” period in early 2021.

To boost local production of electricity, during the open season period, members can express a specific interest in a portion of 300 megawatts allocated to local electricity generation, including power generated from renewable sources, said Mark Stutz, spokesman for Tri-State.

Partial-requirements contracts will provide more flexibility for members’ self-supply of renewables and were approved by Tri-State’s board of directors last week, Stutz said.

The open season capacity is 10% of Tri-State’s system peak demand. Under the new partial-requirements contracts, utility members can self-supply up to 50% of their load requirements, subject to availability. The additional supply during the open season comes in addition to the current 5% self-supply provisions and a new community solar provision, Stutz said.

LPEA is exploring a buyout of its contract with Tri-State. The contract runs through 2050. LPEA is also exploring negotiating for more flexibility in its current contract and also entering a partial contract with Tri-State.

The Federal Energy Regulatory Commission and the Colorado Public Utility Commission are currently hearing cases about LPEA’s claim that Tri-State has unjustly and unfairly discriminated against it by failing to provide LPEA a fair buyout price to leave its 30-year contract with Tri-State.

The Colorado PUC ruled in July that the refusal of Tri-State to offer an exit charge to LPEA was unjust, unreasonable and discriminatory.

However, in September, FERC determined it had the sole power to rule on the contract buyout price dispute. FERC is expected to make its determination in early November.

LPEA maintains Tri-State has illegally added several non-utility members, and if regulators agree the non-utility members were added illegally, the matter of determining which agency would rule on the proper buyout price could move back to the state agency, the Colorado PUC, which is LPEA’s preferred regulatory body.

“LPEA has been pushing Tri-State for years to provide more flexibility and lower costs and we are encouraged by their recent progress in these areas,” LPEA CEO Jessica Matlock said. “We look forward to seeing the details of how this will be accomplished, and if this pushes increased costs into the future, impacting future generations. Our key concern however, remains the legality of the non-utility member additions now before the Colorado PUC. We look forward to the Colorado PUC resolving this issue in the near future.”

Matlock emphasized LPEA is exploring three options for future power supply: achieving more flexibility in its current Tri-State contract, pursuing a partial buyout or pursing a full buyout.

“We are making progress on all three fronts and once we have all the pieces of the puzzle, the pros and cons of each option will be presented to the LPEA board of directors, who will make the final decision,” she said.

Tri-State is exploring the partial-requirements contract open season to see if it is a feasible option to add locally sourced renewable power, Matlock said.

Stutz said Tri-State will implement its 8% wholesale rate reduction goal over the next three years. He said wholesale rates have been stable for the last four years and rates remain stable in 2021.


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