Moody’s report: “High quality renewable resources” could help Tri-State and Basin Electric navigate rising carbon transition risks

Moody’s Investors Service warns that some generation and transmission associations are heavily dependent on coal, and so face higher carbon transition risks. But Tri-State and Basin Electric are better positioned to navigate those risks, according to the investors report, because they benefit from “abundant wind resources” which “may enable these utilities to reduce rates for their customers where the price of new renewables undercuts that of existing coal.”

By Joe Smyth | joe@cleancooperative.com | @joesmyth

A report published last week by Moody’s Investors Service detailed several factors that generation and transmission associations and municipal utilities must consider as they navigate the transition from coal to clean energy. This latest report, "Public Power and Electric Cooperatives -- US: Prudent self-regulation is key to managing carbon transition risks," follows an earlier Moody’s report in April, which showed that many of the coal plants owned by generation and transmission associations and municipal utilities are more expensive than new renewable energy - including each of the coal plants owned by Tri-State Generation and Transmission Association.

This latest report provides more details about the risks and opportunities that these types of utilities face in the "carbon transition," and how those differ from investor-owned utilities because of differences in business model, governance, and rate-setting. But at a broad level, the Moody’s report notes, municipal utilities and generation and transmission associations “face the same growing imperatives to reduce emissions as their larger investor-owned utility (IOU) peers, driven by a combination of public policy at the state and local level as well as customer demands.”

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