Power Supply

For almost 70 years, United Power has worked closely with Tri-State Generation & Transmission to ensure that you have safe, reliable and affordable energy at your fingertips whenever you need it. Unfortunately, the cooperative has had increasing tensions with Tri-State these past several years as they have not been able to provide wholesale power at competitive rates. Comparison to other power providers reveals Tri-State’s rates are as much as 30% higher than their competitors. United Power has a duty to explore its options and an obligation to pursue the path that is most advantageous to members, even when that path isn’t easy.

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United Power retained the services of a well-known expert in the field. She evaluated the financial statements of Tri-State and determined the most reasonable, fair, and non-discriminatory method for calculating a buyout would be to have United Power pay its proportionate share of Tri-State’s long-term debt.

As a validation of the methodology, if you apply this same calculation to previous exits that Tri-State itself said were fair to its remaining members, you get a very similar number to the exit prices they paid. The initial buyout number Tri-State provided us was three to four times higher than what our method or the previous negotiated exits would have been. We will continue to propose this methodology as the most fair and reasonable method as the process continues at FERC.

As mentioned above, applying our methodology results in a reasonable, fair, and non-discriminatory exit price that is proportionally aligned with the exit price paid by two previous co-ops upon their exit. If the exit prices paid by those two cooperatives were fair and non-discriminatory and did not result in cost-shifting to other co-ops, how could our exit fee be any different?

The methodology proposed is calculated based on United Power paying its fair share of Tri-State’s long-term debt. Once the exit is complete, the remaining members should be no worse off than before. In fact, if any cost-shifting has been going on it’s the shifting of costs to United Power as the largest and fastest growing member of Tri-State that’s been happening for the past several years.

United Power is a huge supporter of renewable energy. We have been recognized nationally for our integration of renewable resources, our growth in rooftop solar, and even our work on the country’s first community solar field, Sol Partners. We applaud Tri-State’s effort to integrate more renewables into their system, but that doesn’t address the overall cost issues. As a matter of fact, many of Tri-State’s past decisions have added to both the current low use of renewables and their non-competitive power cost. For United Power members, this shift to more renewable resources could possibly be too little, too late.

Unfortunately, our battle doesn’t end here. Earlier this year, Tri-State filed with FERC asking them to pre-empt (or rule invalid) any decision being made at the PUC. FERC reversed an earlier order and, on August 28th, declared their sole authority and jurisdiction over Tri-State’s exit fees. Having not yet received a final ruling from the PUC, unless a settlement agreement is reached in the near future, we will be forced to go through a second wave of hearings similar to the PUC hearings, this time at FERC. Since Tri-State was already pursuing FERC approval of their exit charge methodology (referred to as the CTP), some preliminary work has already begun. In their initial comments on the case, FERC stated, “Our preliminary analysis indicates that the CTP Methodology has not been shown to be just and reasonable and may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful.”

No. My staff will present to the Board all the options available to United Power and make a recommendation for what we believe to be the best path forward. Our Board has a fiduciary duty to the membership to make a decision that represents the overall best interest of our members. We continue to be available to Tri-State for discussions on this matter and remain open to their suggestions on ways other than an exit to resolve our concerns.