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Do you have questions about the upcoming transition to new power suppliers will impact you and your service with United Power? Click here for answers to frequently asked questions.
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Mark A. Gabriel Announced as New GridWise Alliance Board Member
Dynamic Calculators Included in Recent FERC Exceptions Filing
Brighton, CO - United Power has filed two exit fee calculators in conjunction with its response to the Federal Energy Regulatory Commission (FERC) initial decision by Administrative Law Judge Renee Terry. These calculators may be used to assist FERC and others as they evaluate the impact of (1) United Power’s proposed balance sheet approach (BSA) incorporating the most recent available data and (2) certain modifications to the BSA proposed by FERC trial staff and adopted by the initial decision.
The tools allow all 42 utility members to assess their exit fees from Tri-State Generation and Transmission Association (Tri-State) under (1) United Power’s as-filed BSA (“Appendix A”) and (2) the BSA implementing certain adjustments adopted in the initial decision (“Appendix B”). Working copies of the calculator tools, definitions, and descriptions can be found at www.unitedpower.com/powersupply.
The Appendix B fees are modeled based on FERC staff’s exemplary calculations previewed during the hearing process that were adopted in the initial decision, as well as publicly available data, such as Tri-State’s annual financial reports. Each of the 42 utility members can enter a desired departure date and select variables implementing the exit options available under the initial decision. The Appendix B model also calculates alternatives proposed by United Power in its concurrently filed exceptions brief (e.g., a principled 10-year revenue averaging option and transmission revenue adjustment that United Power describes in the brief). These alternatives improve upon the calculations reflecting the initial decision’s overarching principle that the exit fees should be based on the net costs Tri-State incurred to serve the exiting member.
“We appreciate the hard work by FERC staff in proposing solutions for departure from our power supplier that are in most respects aligned with what United Power has consistently advocated as a fair outcome,” said Mark A. Gabriel, President and CEO of United Power. “By following United Power’s balance sheet approach, everyone can calculate their actual cost to depart. This is critical for future planning for our current power supplier and its utility members. Though the initial decision modifications present implementation questions and other obstacles that we challenge in our exceptions brief, we believe the decision’s principles chart a course toward members’ fair transition to competitive supply and open access.”
United Power has formally indicated its departure from Tri-State, effective May 1, 2024. Learn more about United Power’s departure plan at www.unitedpower.com/powersupply.
About United Power
United Power is a member-owned, not-for-profit electric cooperative, delivering electricity to homes, farms, and businesses throughout Colorado’s northern front range. The cooperative is one of the fastest-growing electric co-ops in the nation, and in June 2021 joined the elite ranks of cooperatives serving more than 100,000 meters. The 900-square mile service territory extends from the mountains of Coal Creek and Golden Gate Canyon, along the I-25 corridor and Carbon Valley region, to the farmlands of Brighton, Hudson, and Keenesburg. United Power is also a founding member of the NextGen Cooperative Alliance, which is dedicated to expanding the power supply and procurement options available to distribution co-ops and reforming the traditional generation and transmission business model. For more information about United Power, visit www.unitedpower.com or follow them on Facebook, Twitter, LinkedIn, YouTube, and Instagram.
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FERC ALJ Affirms Buyout Methodology Supported by United Power
United Power Exits its Current Wholesale Contract Effective May 1, 2024
United Power caught the attention of electric distribution cooperatives nationwide in April when it filed its non-conditional Notice of Intent to Withdraw from its wholesale power contract with Tri-State Generation and Transmission (Tri-State). The cooperative entered a long-term contract with the generation cooperative when few viable sources of affordable and reliable power were available. At the time, it provided stability for United Power and assurance that members would continue to receive reliable power. But the industry has entered a transition, and the contract is no longer reflective of the cooperative or its members’ best interests.
The current contract is too restrictive, capping locally sourced power at just 5% of its total load and preventing United Power from bringing more local generation onto its system, which would lower costs and expand member options. Before making the difficult decision to exit its contract, leadership at the cooperative attempted to negotiate a revised “partial requirements” contract. The revised contract would have continued United Power’s membership relationship with Tri-State while also allowing the cooperative to explore and purchase lower cost, cleaner power options on the market. Unfortunately, negotiations to this end failed.
“Our first option was to continue a mutually beneficial relationship with our wholesale power supplier, where we would continue sourcing a portion of our power from them,” said Mark A. Gabriel, United Power’s President and Chief Executive Officer. “It is unfortunate they were unwilling to help us reach this goal. Although we feel the current contract does not represent shifts taking place in the industry, it was not a decision we made lightly. We spent countless hours weighing our options and discussing a course of action that would result in the best outcome for our members and our future.”
United Power also issued a request for proposal (RFP) for new wholesale power suppliers along with its Notice of Intent to Withdraw. Perspective power suppliers will have until early August to submit proposals outlining their ability to meet the cooperative’s energy needs. Proposals from suppliers are expected to meet three criteria:
- Energy, the critical resource keeping lights on for United Power members.
- Capacity, the ability to provide continuously reliable power even in adverse conditions.
- Resource adequacy, the assurance generation will be adequate to meet demand even on hot summer days during peak hours.
“We are expecting a healthy response to our RFP,” said Dean Hubbuck, United Power’s Chief Energy Resource Officer. “We’ll spend about two months evaluating proposals before selecting a handful of potential suppliers to work with directly. We hope to select a supplier, or group of suppliers, and begin contract negotiations early next year.”
The final step in United Power’s exit is determining an exit fee, which is currently pending with the Federal Energy Regulatory Commission (FERC). Although the fee hasn’t been determined, FERC has issued a number of decisions in the cooperative’s favor over the past few months. In March, FERC economist Greg Golino determined Tri-State’s methodology for calculating the exit fee was “flawed and unreasonable.” The exit fee could be decided as early as this summer.
“Our situation has substantially changed, with more affordable, reliable, and environmentally sustainable power supply options now available,” said Beth Martin, United Power’s Board Chairman. “We believe we should deliver electricity that is more reflective of the current market price, ultimately helping our members save.”
In June, United Power hosted a member forum to discuss its upcoming exit. Gabriel and Hubbuck provided detailed background of how United Power got to this point and where the cooperative is heading from here. The forum concluded with a question and answer session from attendees both online and in person.
Additional information, including a recording of the forum is available on our Power Supply page.
Locally Owned by Those We Serve
United Power, a member-owned utility founded in 1938, provides electric service to more than 95,000 meters, or 250,000 residential, agricultural and business consumers along Colorado’s northern Front Range. The not-for-profit electric cooperative is guided by a member-elected board of directors comprised of eleven directors who serve three-year terms.
Surrounding Denver on three sides, United Power serves 900 square miles along the north central range of the Colorado Rockies. Our service territory wraps around the north and west borders of Denver International Airport and includes the north metropolitan development corridors of Interstate 25, Interstate 76, State Highway 85, and E-470.
Cooperative businesses, like United Power, are special because they are owned by the consumers they serve, and they are guided by a set of seven principles that reflect the best interests of those consumers.
All cooperative businesses adhere to these seven guiding principles:
- Voluntary and Open Membership.
- Democratic Member Control.
- Members’ Economic Participation.
- Autonomy and Independence.
- Education, Training, and Information.
- Cooperation Among Cooperatives.
- Concern for Community.
United Power purchases wholesale electricity from Tri-State Generation & Transmission. Tri-State is the supplier of electricity to United Power and 41 other customer-owned utilities in Colorado, Wyoming, New Mexico and Nebraska.
Currently, wholesale power from Tri-State constitutes more than 77% of our total costs paid by our members. Since 2018 United Power has been actively seeking to reduce our costs for wholesale power, and to have more control over the generation mix of that power.
Our members deserve cleaner, more affordable power. United Power is committed to providing safe, reliable and affordable electric power, and as a cooperative, we’re always looking out for our member-owners.
United Power has been a leader in innovative and renewable energy projects. From developing the state’s first cooperative solar farm, to several large-scale solar projects, and to operating the state’s largest battery storage facility, we have been driven by what is financially and environmentally best for our members.
We are limited by our Tri-State contract to incorporate any additional renewable energy. United Power has been consistently at the table asking for solutions that give our members what they want. We know our members want more local, renewable power serving their homes and businesses.