Tri-State Generation and Transmission Association’s largest member is suing the wholesale power provider over what it claims is a scheme to hold it hostage to “an expensive and restrictive contract” that could result in millions of dollars of damages.
Brighton-based United Power, which has campaigned for more flexibility in Tri-State’s contracts with its 43 members, filed the lawsuit Monday in Adams County District Court.
Tri-State fired back Tuesday, saying the lawsuit “smacks of desperation and is completely without merit.”
But United Power said Tri-State pledged to allow members to produce more of their own electricity, giving them an opportunity to increase the use of renewable energy, but instead pushed through a bylaw change designed to limit members’ options.
A bylaw change approved by its board of directors in 2019 paved the way for Tri-State to have a federal agency regulate it rather than the agencies in each of the four states where it operates. The board voted to add members that aren’t electric cooperatives, a requirement Tri-State had to meet before the Federal Energy Regulatory Commission would oversee it.
United Power argues that Tri-State recruited the three new members to help derail a complaint the electric cooperative filed with the Colorado Public Utilities Commission. United Power has asked the PUC to order Tri-State to propose “a just, reasonable and non-discriminatory” fee to allow the electric cooperative to get out of its contract.
The lawsuit also names the three members that aren’t electric cooperatives.
United Power is a founding member of Tri-State, which serves 18 electric associations in Colorado. Tri-State also has members in Wyoming, Nebraska and New Mexico.
United Power claims that Tri-State never intended to allow it to modify or end its contract because of its large electric load and power purchases. United Power said it accounted for 17% of Tri-State’s revenues in 2019.
“On behalf of the board and staff of United Power, I can only say that I am dismayed and disappointed by the actions of Tri-State’s staff and these non-utility entities who worked together to intentionally mislead United Power and any other members who were acting in good faith during this time,” Bryant Robbins, the cooperative’s acting CEO, said in a statement.
Tri-State, based in Westminster, said that it and its member cooperatives have been open about wanting to be regulated by the federal agency rather than four different states.
United Power and 41 other cooperatives agreed in 2007 to extend their wholesale power contracts to 2050. Now United Power wants to “stick its fellow member cooperatives and public power districts with the bill” and is making the same case to FERC, Tri-State said.
United Power isn’t the only member that’s been vocal about its dissatisfaction with Tri-State. After more than a year of haggling, Tri-State agreed in April to let the Delta-Montrose Electric Association out of its contract for $62.5 million. The cooperative said it wanted out because of Tri-State’s rates and a cap on the power it could produce or buy from other sources.
In 2016, the Kit Carson Electric Cooperative in Taos, N.M., paid $37 million to break its contract with Tri-State. Last year, the La Plata County Electric Association in Durango filed a complaint with the Colorado PUC saying that Tri-State refuses to name a price for ending its contract.
Tri-State has been criticized for getting too much of its power from coal, but has increasingly added more renewable energy in its fuel mix. In January, the power supplier released a plan to boost its renewable energy sources to 50% by 2024 and cut greenhouse-gas emissions by 90% by 2030 from Colorado facilities it owns or operates.
Tri-State said its board recently approved changes to allow member cooperatives to produce a greater amount of their own electricity. It said the board also came up with a way to calculate payments for early termination of contracts.
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