La Plata Electric Association is asking the state to determine how much it would cost for the co-op to buy out its contract with its wholesale energy supplier.
LPEA is interested in exiting its contract with Tri-State Generation and Transmission because it could allow the co-op to purchase cheaper and more renewable energy. LPEA is contracted to purchase 95% of its energy through Tri-State until 2050.
LPEA asked Tri-State for an estimate of how much a buyout would cost more than four months ago. But Tri-State has not responded to that request because it placed a moratorium on contract discussions with its members, a news release said.
Tri-State is also pursuing federal regulation that could prevent Colorado’s Public Utilities Commission from determining exit fees for Tri-State members, the release said.
“We have run out of options to obtain a fair exit charge from Tri-State,” said Jessica Matlock, LPEA’s CEO. “Particularly in light of Tri-State’s exit charge moratorium, combined with its efforts to circumvent PUC jurisdiction over exit charges, we needed to act now.”
LPEA has a responsibility to its members to examine future power supply options, and it can’t weigh those options without a fair exit charge estimate, she said.
Tri-State CEO Duane Highley said in a statement his organization would review LPEA’s filings with the PUC and file a response.
Tri-State is not discussing exit fees with members because a committee of its membership is reviewing how electrical co-ops’ contracts, such as LPEA’s, should be valued, Tri-State spokesman Mark Stutz said. The committee’s work was prompted by member requests, and it is expected to be finished in 2020, Highley said in a news release.
“Our membership’s vision for Tri-State is closely aligned with La Plata Electric Association’s laudable goals to be cleaner and lower power costs,” he said.
When Matlock was hired, she said she planned to work with Tri-State on options to give LPEA more flexibility to pursue renewable energy.
She said LPEA has been trying to work with Tri-State. But LPEA decided to ask the Public Utilities Commission for a buyout number because Tri-State was rushing to become federally regulated, while at the same time, moving slowly to provide a buyout estimate and develop a methodology to value contracts.
United Power, Tri-State’s largest co-op, also asked the Colorado Public Utilities Commission this week to determine what it would cost to buyout of its contract. United Power is also seeking an exit fee estimate, in part, because of Tri-State’s moratorium on discussing contract buyouts.
“By not allowing United Power to move forward in a timely manner to seek additional energy sources, Tri-State is effectively holding this cooperative and our members hostage,” United’s CEO John Parker said, in a statement.