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LPEA energy rates may fall

Co-op’s agreement aims to ease burden

DENVER – Southwest Colorado electricity cooperatives have reached a temporary agreement with their power supplier over a rate increase that many felt was unfair and discriminatory.

La Plata Electric Association and Empire Electric Association settled with Tri-State Generation and Transmission Association last month, avoiding any action for now by the Colorado Public Utilities Commission.

The two co-ops – along with other interests that joined the complaint – filed with the PUC in 2013 after Tri-State implemented a new wholesale pricing scheme that raised prices for co-ops.

The previous rate managed electricity load by encouraging use in off-peak periods. Thousands of customers, including major gas and oil producers, had signed up to get discounts for shifting their power use to the evening, instead of peak-use daytime hours.

Tri-State went from a flat energy and demand rate to one that was based on both time-of-use and seasonal average demand, with pricing fluctuating based on the season. Increases were specific to each co-op.

After rates increased, customers became concerned, despite Tri-State still providing some discounts to co-ops.

High-load industrial customers saw an increase of 15 to 20 percent in 2013, and time-of-use customers experienced a 30 percent increase, according to LPEA.

The temporary agreement, however, is based on a fixed-energy and demand rate, which stakeholders hope will ease burdens.

LPEA’s new chief executive, Mike Dreyspring, said the temporary agreement results in a wholesale rate decrease of between 1.5 and 2 percent. But he said conversations are ongoing.

“They also agreed to follow a process to work on a new rate that would be a more permanent rate,” Dreyspring said. “All 44 of us are working together to try to develop a fair and permanent rate.”

The collaboration brings all sides back to familiar negotiating ground. The PUC complaint was unusual in the sense that rate matters had traditionally been handled through the “family” of the Tri-State board.

Tri-State argued that it was free from PUC regulation, pointing to customers across state lines. But it appeared the PUC was ready to offer a decision if needed.

The temporary agreement reached, however, does not end the PUC complaint. It simply suspends it while stakeholders work out a new, more permanent agreement.

“We can work together. We just felt that the rate that they went to was not right,” Dreyspring said. “I’m extremely confident. There are a substantial number of changes that occurred at Tri-State as a result of this.”

A spokesman for Tri-State said the co-op is happy they were able to find agreement without having to immediately hear from the PUC.

“As a family of cooperatives, we work best when we work together to resolve issues and disputes,” said Tri-State spokesman Lee Boughey.

Stakeholders hope to reach a settlement in 2015.

“The association has a contract committee and a rate committee that are currently meeting and could make recommendations to the association’s board, and a third-party is conducting a cost of service study,” Boughey said. “This is a positive step to address issues within the association’s diverse membership.”

pmarcus@durangoherald.com



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