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FERC denies Tri-State bid to skirt state regulation

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FERC denies Tri-State bid to skirt state regulation

The Federal Energy Regulatory Commission Oct. 4 rejected, without prejudice, a Tri-State Generation and Transmission Association Inc. proposal to become subject to the agency's jurisdiction. FERC found that a series of filings aimed at making the wholesale electric cooperative's rates FERC-jurisdictional were deficient because they lacked basic information required under the commission's rules.

Tri-State provides wholesale power to its 43 member cooperatives that together serve 1.3 million customers in New Mexico, Colorado, Wyoming and Nebraska. On July 9, Tri-State's board of directors voted to pursue rate regulation at FERC, saying its members expected the move to "eliminate inconsistent rate treatment across the states."

On July 23, Tri-State 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. That filing drew an early protest from the Colorado Public Utilities Commission, which argued the co-op's application should be dismissed as premature because it implicated unresolved questions of state law in Colorado and New Mexico judicial and regulatory proceedings. The Sierra Club also intervened in the proceeding, arguing Tri-State's filings should be rejected because they did not include plant- or unit-level costs.

Tri-State revealed Sept. 3 that its previously undisclosed new member is MIECO Inc., a subsidiary of Japanese conglomerate Marubeni Corp.. In a news release, the co-op claimed that the new admission meant that the association's rates will be regulated under the Federal Power Act just like those of other regional wholesale power providers.

However, FERC on Oct. 4 rejected the submittals, noting its order "should not be deemed a comprehensive list of possible inadequacies in Tri-State's filings." Without addressing the merits raised by the Colorado PUC, the commission specifically pointed to a lack of "sufficient data and work papers" needed to review plant and expense balances, among other deficiencies.

In rejecting the application without prejudice, FERC said Tri-State can try again by submitting "a complete explanation" for the underlying method used in arriving at the proposed cost of service included in its initial filings. (FERC docket ER19-2440)