Electric cooperatives wage battle with Tri-State

By Joe Hanel
Journal Denver Bureau

DENVER – Southwest Colorado’s electricity cooperatives were ready to start a legal battle with their power supplier this week, but now they will have to wait until June.

Empire Electric Association, La Plata Electric Association, Kinder Morgan CO2 Company and several gas and oil companies want state regulators to overturn a new rate by Tri-State Generation and Transmission, which supplies the electric cooperatives with power.

The co-ops are part owners of Tri-State, and it’s an unusual step to ask the state to intervene. Tri-State says the state has no jurisdiction over how it sets its rates.

“This certainly isn’t what we wanted to do. We prefer to keep things in the family,” said Neal Stephens, general manager of Empire Electric.

But Tri-State’s board would not listen to the Southwest Colorado co-ops, which are some of the biggest losers in the new rate structure that took effect in January, Stephens said.

“If there’s no other recourse, where do you go?”

So the co-ops filed a case at the Colorado Public Utilities Commission.

A PUC judge cancelled a Wednesday hearing and instead scheduled a hearing for early June to determine whether the state has jurisdiction over Tri-State.

Tri-State maintains that it is not accountable to the state government, but to the 44 co-ops that own it and govern it through its board.

“We have a democratically elected board of directors. That’s the appropriate place for decisions to be made regarding our association’s rates,” said Lee Boughey, a Tri-State spokesman.

The biggest losers from the new Tri-State rate, which took effect in January, are customers who use power in off-peak times. That includes big industrial customers such as Kinder Morgan, BP and other gas companies.

It also includes households who signed up for Empire’s time-of-use program, which provides discounts for using power at off-peak hours and penalties for using it when everyone else is consuming electricity.

Because of Tri-State’s new rate, Empire’s time-of-use customers suffered a 40 percent increase in their bills, Stephens said.

Tri-State’s spokesman, though, said the company is still providing discounts for co-ops that shift their power consumption to off-peak times.

But the new rate is designed to be more fair than the old one, and that means some co-ops won’t have the same deals they did in the past.

“Our board’s rate principles include equity and wanting to make sure there’s a much smaller spread for our member co-ops,” Boughey said.

But Stephens said Tri-State isn’t providing a big enough discount or penalty to make customers shift their use to off-peak times, like Empire has done over the years.

“When Tri-State says they’re still trying to do the same ... that doesn’t hold water for me,” Stephens said.

Stephens had hoped to make those arguments in Denver this week. But before the PUC will hear any of it, its administrative law judge needs to decide if the agency even has jurisdiction over Tri-State.

However the June hearing turns out, the decision is sure to be appealed, said Greg Munro, CEO of La Plata Electric Association.


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