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Tri-State's bid to become FERC-jurisdictional prompts calls for further scrutiny

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Tri-State's bid to become FERC-jurisdictional prompts calls for further scrutiny

Tri-State Generation and Transmission Association Inc.'s effort to bring its rates under federal regulation has sparked stiff opposition from state regulators and clean energy advocates while prompting some of its own members to call for a closer look at the costs behind the co-op's prices.

In an attempt to deal with one regulator instead of potentially four, Tri-State on July 23 submitted a package of filings to the Federal Energy Regulatory Commission 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.

Incorporated in 1952, 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's application drew an early protest from the Colorado Public Utilities Commission, which argued Tri-State's move to become FERC-jurisdictional raised unsettled matters of state law. Under Colorado's recently passed clean energy legislation, Tri-State will be required for the first time to submit its resource plans to the PUC. While the rules governing those plans are still under development, the coal-heavy co-op could be required, among other things, to report annual energy demand forecasts and projected carbon dioxide emissions.

In a supplementary protest, the PUC informed FERC that it voted on Aug. 21 to open a state-level proceeding examining whether regulators there must approve the addition of any new member to Tri-State and what jurisdictional consequences will flow from that addition. The proceeding (No. 19M-0460E) directs Tri-State to respond by Sept. 11 to a detailed set of inquiries while at the same time expressing concern that the co-op's actions could undermine the requirement that certain utilities develop state commission–approved clean energy plans.

Without taking a specific position, the New Mexico Public Regulation Commission also filed a motion to intervene and protest in the FERC proceeding. In March, New Mexico officially became the third U.S. state to target the complete decarbonization of its power system before midcentury.

Meanwhile, the Sierra Club in an Aug. 23 protest argued that Tri-State's existing rules and rate schedules, which the co-op asked FERC to approve in its first set of filings, violate the Public Utility Regulatory Policies Act in several ways.

Among various co-op policies, the advocacy group singled out Board Policy No. 101, which provides that a member may exceed a 5% cap on self-procured renewable energy only if that member agrees to pay Tri-State's corresponding share of lost revenue. Such a policy violates the spirit of PURPA, which is aimed at ensuring small renewable power generators have non-discriminatory access to the electric resource market, the Sierra Club asserted.

In urging FERC to reject Tri-State's filings, the Sierra Club also argued Tri-State's application materials violate the commission's regulations because they do not include plant- or unit-level costs. That point was echoed in a protest filed by the Northwest Rural Public Power District, a Tri-State member located in the northern part of the Nebraska Panhandle, which noted that "such rates have never been reviewed by any regulatory body to determine if they are just and reasonable."

While stating that it supports Tri-State's proposal to become FERC-jurisdictional, the Wheat Belt Public Power District, which is also located in Nebraska, urged the commission to open an investigation under Section 206 of the Federal Power Act to evaluate "the justness and reasonableness" of the co-op's rates for services. And San Miguel Power Assn Inc., a long-time Tri-State customer in Colorado, in its own protest asked FERC to condition any approval on the inclusion of "certain necessary but absent documents."

Approximately two dozen comments, mostly from Tri-State's members, were submitted in support of the co-op's July 23 filings with the commission. (FERC docket ER19-2440)