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Reports examine the impacts of Tri-State's high wholesale power costs

4/27/2019

By Joe Smyth | [email protected] | @joesmyth

Two reports this month provide new details about the impacts of the high wholesale power costs that Tri-State Generation and Transmission Association charges electric cooperatives in Colorado, New Mexico, Wyoming and Nebraska.

One of the reports, “How Kit Carson Electric Engineered a Cost-Effective Coal Exit,” was published by the Institute for Energy Economics and Financial Analysis (IEEFA). It includes an overview of the history and reasons for the co-op's departure from Tri-State in 2016, such as interest in pursuing more local solar projects and frustration with Tri-State's increasing rates.

The IEEFA report also includes some key new information: the price that Kit Carson Electric Cooperative (KCEC) expects to pay for wholesale power from Guzman Energy over the next seven years.

KCEC had endured 12 rate increases from 2000-2016 under Tri-State, increases that doubled the price KCEC was paying for power from Tri-State over the full 16-year period, from $39.06/MWh to $79.17/MWh. These increases were predictable in only one sense—that they could be expected year after year. The unknown piece of the puzzle was by how much (Tri-State had unilateral discretion to change rates).

KCEC’s new power purchase agreement also sets the price bar markedly lower than Tri-State’s, which in its most recent annual report put its average 2017 wholesale rate to members at $75/MWh.

The KCEC-Guzman deal, by comparison, after setting 2017 rates at about $67/MWh, more than 10% below Tri-State’s wholesale rate to KCEC in 2016, put them even lower in 2018, at $66.66/MWh. From 2019-2022 the Guzman wholesale rate to KCEC will average about $75/MWh as the co-op pays off its exit-fee loan. After that, it plummets for the final four years to an average of about $47/MWh through 2026.

Tri-State executive involved with anti-Clean Air Act group since 2005

4/13/2019

By Joe Smyth | [email protected] | @joesmyth

A Tri-State Generation and Transmission Association executive has been involved since 2005 with the Utility Air Regulatory Group (UARG), the anti-Clean Air Act group that is the subject of a US congressional investigation, raising questions about the amount of money that Tri-State has contributed to the group over the last 14 years.

On Thursday, leaders of the US Congressional Committee on Energy and Commerce wrote to Tri-State and other utilities, requesting information and documents about the utilities' relationship with UARG, a secretive group that has played a key role in lawsuits aimed at rolling back Clean Air Act rules. Internal UARG documents obtained by Politico show that Tri-State contributed $167,418 to UARG in 2017.

In their April 11 letter, congressional investigators asked Tri-State to "Please explain how your substantial annual contributions to UARG are consistent with your obligations to ratepayers."

Congressional investigators are also seeking a variety of documents and information from Tri-State and other utilities by April 25, including "Membership and leadership nominations" and "Documents relating to the Policy Committee, including all documents relating to meetings thereof."

A bio of Barbara Walz, Tri-State's Senior Vice President of Policy and Compliance, shows that she has been a member of UARG's Policy Committee since 2005, and a member of UARG's Steering Committee since 2010.

US Congressional Committee requests details of Tri-State funding to anti-Clean Air Act group

4/11/2019

By Joe Smyth | [email protected] | @joesmyth

Leaders of the US Congressional Committee on Energy and Commerce wrote to Tri-State Generation and Transmission Association and other electric utilities today, requesting information about the utilities' relationships with the Utility Air Regulatory Group (UARG), a secretive lobby group focused on rolling back Clean Air Act rules.

In the letter to Tri-State, Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Environment and Climate Change Subcommittee Chair Paul Tonko (D-NY) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) wrote, “UARG has avoided any transparency, with details of its funding and internal organization only recently revealed. Your company contributed $167,418 in 2017 to fund UARG's activities, with a higher contribution projected for 2018."

Because of Tri-State's funding of UARG and its legal challenges against Clean Air Act rules, the Energy and Commerce Committee leaders wrote to Tri-State to request information and documents as part of their investigation into UARG and its connections to senior US Environmental Protection Agency officials.

Renewable energy projects stalled in 2018 among Tri-State member co-ops

4/3/2019

By Joe Smyth | [email protected] | @joesmyth

Electric cooperatives in Colorado and New Mexico have built a growing number of renewable energy projects over the last several years as prices declined, but new data show that local renewable energy growth stalled in 2018 among the 43 co-ops that buy power from Tri-State Generation and Transmission Association.

The stall in growth comes even as prices for solar projects have declined, and highlights the key role that Tri-State policies play on member co-ops. Some co-ops like United Power and La Plata Electric are restricted from pursuing more projects, because they reached the 5% limit that Tri-State imposes on local energy development. And Tri-State has also repeatedly changed the pricing for member co-ops' renewable energy projects in recent years under its Policy 115, in ways that have discouraged projects. In 2018, Tri-State also changed Policy 115 to include energy storage projects, which United Power said would cut in half the expected savings for its members from its 4 megawatt Tesla battery project. Overall, the recent policy changes show how Tri-State has moved to discourage its member co-ops from pursuing local solar and battery projects, just as those resources have become most economically attractive.

According to Tri-State's 2018 10-K, which was filed with the Securities and Exchange Commission last month, 21 member co-ops had contracted for a total of 139 megawatts of local energy projects by the end of 2018. That marked a decline from the 143 megawatts noted in Tri-State's 2017 10-K, a significant change after years of growth. Tri-State reported 113 megawatts of member co-ops' local energy projects in its 2016 10-K.

But Tri-State officials didn't mention the recent decline of its member co-ops' renewable energy projects during the first public meeting of its 2019 Integrated Resource Planning process last week, and instead described how "that number has really grown from when the first project came online about ten years ago."

Tri-State also didn't mention the decline in a recent filing with the Colorado Public Utilities Commission.

Reports examine the impacts of Tri-State's high wholesale power costs

Tri-State executive involved with anti-Clean Air Act group since 2005

US Congressional Committee requests details of Tri-State funding to anti-Clean Air Act group

Renewable energy projects stalled in 2018 among Tri-State member co-ops

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