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Amid co-op discontent, Tri-State members mull bylaw changes

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Amid co-op discontent, Tri-State members mull bylaw changes

Rural electric cooperative members of Tri-State Generation and Transmission Association Inc. gathered on March 6 to consider bylaw changes as the wholesale power provider faces discontent within its network about the prices and sources of its power.

Tri-State, a nonprofit, provides wholesale power to 43 distribution cooperatives in Colorado, New Mexico, Wyoming and Nebraska. Its member cooperatives, not shareholders, drive decision-making through a democratic process of establishing bylaws for the association. Tri-State owns about 3,150 MW of generation capacity, most of which is coal-or-gas fired, according to S&P Global Market Intelligence data. It recently agreed to purchase the output of a 100 MW solar facility in Colorado and of a 104 MW wind farm. Tri-State restricts member cooperatives to a 5% limit on the amount of energy they can produce on their own.

Some members are displeased with their power contracts, which they say lock members into purchasing electricity produced mostly from fossil fuels as prices for renewable energy fall and as the political landscape shifts toward renewable energy mandates.

In December 2018, the Delta-Montrose Electric Association filed a complaint with the Colorado Public Utilities Commission, asking regulators to allow it to exit a wholesale power contract with Tri-State prior to the 2040 expiration date so it can purchase cheaper and environmentally cleaner power. The dispute, which has stirred concerns among members that power prices could rise within the network if one member departs, is ongoing. Delta Montrose has gained the support of the new Democratic Gov. Jared Polis' administration in its bid to exit Tri-State.

Against this backdrop, Tri-State members on March 6 discussed a change to the membership bylaws that "allows the board to consider alternative types of membership and contracts for our members as well as those entities interested in power and services from Tri-State," Lee Boughey, a Tri-State spokesman, said in an email.

Tri-State’s bylaws allow for one class of membership in the organization, and all member cooperatives are required to pay Tri-State for most of their wholesale power needs. The proposed changes would create different classes of memberships, Boughey said, allowing for more flexibility in contracts. The new membership types could also open the door for municipal or private utilities to join.

The bylaw change would give Tri-State opportunities to attract new types of membership and load growth, said Jasen Bronec, CEO of Delta-Montrose, which supports the changes.

"They see it as a way to grow Tri-State, not necessarily that they see this as an out for existing members," he said.

The board will vote on the bylaw changes at its annual meeting in early April.