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Off-peak rate fight brewing

LPEA files complaint with state against supplier’s new fee structure

La Plata Electric Association has joined a coalition of electric cooperatives and large companies in filing a formal complaint against Tri-State Generation and Transmission Association, charging the association’s new rate structure is unreasonable.

Tri-State changed its rate structure this year to assess charges by calculating a customers average electricity usage rather than factoring use during peak-demand times.

The coalition alleges the new rate structure bases customers’ energy rates on their energy consumption and creates an unfair economic burden on customers who are encouraged to use electricity during off-peak hours. Tri-State’s previous rate structure encouraged use of electricity during off-peak hours, according to the LPEA complaint.

LPEA allows its customers to participate in a time-of-use program, which charges users a rate based on when they are using electricity, encouraging off-peak use with lower rates.

“The time-of-use program is virtually useless now,” said Jeff Berman, an LPEA board member who voted in favor of filing the complaint.

The changes went into effect Jan. 1, and LPEA’s time-of-use customers have seen about a 30 percent increase in their electricity bills, said Greg Munro, LPEA CEO.

About 5,000 LPEA customers were in the program before the new rate structure, according to the complaint, which was filed Monday afternoon with the Colorado Public Utilities Commission.

The complaint comes after about a 1½-year discussion with Tri-State about its new rate structure, according to a LPEA news release.

LPEA is one of three cooperatives in the state involved in the complaint, including Empire Electric Association, which serves Cortez. BP, Encana Oil & Gas, Enterprise Products Operating LLC, Kinder Morgan CO2 Company and ExxonMobil Power and Gas Services Inc. are part of an alliance that joined the cooperatives in the complaint.

The cooperatives purchase generation and transmission services from Tri-State under a wholesale contract that requires the cooperatives to purchase at least 95 percent of their electricity from Tri-State at the rates set by the association. The contract expires Dec. 31, 2050.

The cooperatives are among 44 members in Colorado, Wyoming, Nebraska and New Mexico that are under contract with Tri-State.

Electricity cooperatives in New Mexico filed a complaint in November 2012 with the New Mexico Public Regulatory Commission, alleging Tri-State’s rate increases and rate structure in the state were unfair. The New Mexico PRC opened an investigation into the increase.

Tri-State, in return, filed a federal lawsuit against the New Mexico PRC, saying it was outside its jurisdiction and could not control utility rates in the state, according to a Santa Fe New Mexican article.

Tri-State could make the same argument against the Colorado PUC should the commission look into the new rate structure, said Barry Spear, LPEA’s attorney, but the coalition believes the commission is within its jurisdiction to review the structure.

Tri-State has 20 days to file a response to the complaint, but has to file a motion to dismiss the complaint in 14 days if it doesn’t believe the PUC is within its jurisdiction, Spear said.

Tri-State starts a 1½-day board meeting today, but it is unknown if board members will discuss the complaint. The complaint is not on the board’s agenda, but Spear said he expects the board to informally discuss it.

jdahl@durangoherald.com

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