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Colo. regulators protest Tri-State's move to become FERC-jurisdictional

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Colo. regulators protest Tri-State's move to become FERC-jurisdictional

The Colorado Public Utilities Commission is seeking to block Tri-State Generation and Transmission Association Inc.'s recent application to bring its rates under federal regulation.

In an early protest filed with the Federal Energy Regulatory Commission on Aug. 13, the PUC asked that Tri-State's attempt to deal with one federal regulator instead of potentially four state regulators be dismissed, arguing that the wholesale power cooperative's move is premature.

Tri-State provides wholesale power to its 43 member cooperatives that together serve 1.3 million customers in New Mexico, Colorado, Wyoming and Nebraska. The co-op on July 23 filed a stated rate tariff with FERC, explaining that it expects to lose its exemption from commission regulation under the Federal Power Act upon the admission of an unnamed new member that will not be an electric cooperative or a governmental entity. While none of the states at issue historically have exercised rate regulation over Tri-State, the co-op in its filing said the costs of providing service to its members could be distributed inequitably if one or more of the four states in which it operates were to regulate its rates or impose new or different regulatory requirements.

In response, however, the PUC argued that Tri-State's filing should be dismissed because it implicates unresolved questions of Colorado law that state regulators currently are addressing. As part of that state's sweeping clean energy legislation, the PUC on July 31 released proposed rules governing resource planning aimed squarely at Tri-State. Under the proposed rules, Tri-State among other things must provide a detailed description of its projected carbon emissions, as well their cost.

The PUC in its Aug. 13 filing at FERC said it also plans to discuss at its Aug. 21 weekly meeting opening a docket to determine whether state regulators must approve the addition of any new member to Tri-State and what jurisdictional consequences would flow from that decision.

A Tri-State spokesperson on Aug. 14 declined to disclose the identity of the new member referred to in its filing with FERC.

Tri-State has been accused by some of not transitioning its coal-heavy resource portfolio to renewable energy quickly enough, but the co-op has said it is making progress toward that end. Tri-State currently has 2,041 MW of operating nameplate coal-fired capacity out of 3,148 total MW of generating capacity, according to S&P Global Market Intelligence data.

Some Tri-State members have opted to leave the co-op in pursuit of cleaner, cheaper sources of electricity. Delta Montrose Electric Association, for example, reached a settlement with Tri-State in July under which it will withdraw from the co-op in 2020 so it can serve its roughly 28,000 customers in western Colorado with more clean power. The same month, Tri-State said it will create a "Responsible Energy Plan" to comply with "aggressive carbon reduction, renewable energy and resource planning requirements" and announced the early closure of the 100-MW Nucla coal plant in Montrose County, Colo.

Meanwhile, the Sierra Club and the Natural Resources Defence Council both have moved to intervene in the FERC proceeding, eyeing it as an opportunity to expedite Tri-State's transition to cleaner sources of energy. The Sierra Club already has filed for access to the nonpublic version of Tri-State's application for market-based authority, which includes detailed information about the co-op's generating assets.

"We've lacked mechanisms to get at and understand the economics of their fleet and figure out how to put pressure on them to move toward a greener energy mix," Sierra Club Staff Attorney Casey Roberts said Aug. 14 in an interview. "Becoming subject to FERC jurisdiction is an opportunity to dig in and look at their books and make some arguments about the extent to which investment in and continued operation of those coal plants is prudent and a good idea for their ratepayers."

At the request of the Sierra Club and others, FERC recently extended until Aug. 23 the deadline for submitting comments on Tri-State's rate filing. (FERC docket ER19-2440)