United Power, a member-owned, not-for-profit electric cooperative based in Brighton, Colorado, filed its non-conditional Notice of Intent to Withdraw from Tri-State Generation and Transmission Association, Inc. (Tri-State) with the Federal Energy Regulatory Commission (FERC) in Washington, D.C., on April 29.
The electric cooperative previously filed a similar notice of intent late last year. That notice, which included a proposed Jan. 1, 2024 departure date, was conditioned upon the assessment of a just and reasonable exit fee by FERC. With this latest action, United Power’s Board of Directors reaffirmed its decision to depart from its wholesale power supplier with a nonconditional notice.
“After careful consideration, our Board stands committed to securing more affordable, more flexible, and lower carbon power,” said Mark A. Gabriel, United Power President and Chief Executive Officer. “We expect this will bring economic benefits and lower rates to our communities, along with greater flexibility to generate power closer to home,” he added.
The latest filing moves the cooperative’s previously announced departure date to May 1, 2024. The modification to the exit timing comes after a recent FERC ruling that required departing utilities to provide non-conditional notices. Central to FERC’s decision is that United Power and its power supplier both require certainty regarding actual departure dates and contracting obligations for power supply. The non-conditional notice of United Power’s departure will allow Tri-State to plan for its reduced supply obligation and assess the economic viability of its higher cost coal generation units.
A FERC hearing to determine a just and reasonable exit fee begins May 3 in Washington, D.C. A ruling from the presiding FERC Judge on exit fees for Tri-State’s members is expected by the end of the summer, with a final Commission decision expected in 2023. Contract disputes between United Power and its power supplier have been ongoing as the cooperative seeks a just and equitable exit fee.
United Power is one of several electric cooperatives in the Tri-State system seeking more flexibility, lower cost power, and fewer contract constraints. Two others, Kit Carson Electric Cooperative and Delta-Montrose Electric Association, have already exited, while three other cooperatives have filed to reduce their participation by 50%. Current power rates through TriState are 20% above market, and contract requirements permit only 5% locally sourced power. Economic benefit for its members and the ability to generate local power continue to be the primary reasons United Power seeks to leave the Tri-State membership. United Power believes its withdrawal is in the best interest of its members.
Simultaneously, United Power today issued a Request for Proposals (RFP) for wholesale electric power supply to serve a peak load of up to 600 MW and retail sales of approximately 3,000 GWh. Commitments of intent to participate in the RFP are due by May 16, with questions and clarifications due by June 13. Proposals for part one of the process are due by Aug. 8.