Tri-State and the battle for clean energy in rural Colorado - Western Colorado Alliance for Community Action

1.3 million rural consumers across Colorado, New Mexico, Wyoming, and Nebraska depend on the Tri-State Generation and Transmission Association for their power. While Tri-State is indispensable the economic and environmental future of many of our communities, the monolith has become the biggest barrier to clean and renewable energy development in rural Colorado.

At a time where wholesale electricity from Colorado wind and solar has dramatically crossed the cost-competitive threshold – where it can beat dirtier fuels like coal and natural gas on price alone – Tri-State is burdening dozens of Western Slope communities with high costs and dirty power.

Tri-State is an association of 43 rural electric associations and co-ops – the local organizations which send you an electricity bill every month. In many cases, we are the legal owners of these organizations as member-costumers, with voting rights on major policy choices and the chance to elect a Board of Directors. Our local electric association or co-op then hires staff, contracts with suppliers for power, and develops its own local generation and transmission infrastructure on our behalf. Our co-ops then each select a representative to serve on Tri-State’s governing board to set its priorities and policies, theoretically created a democratically-governed utility for 1.3 million consumers – though an unelected class of managers, staff, and investors often play an obfuscated role.

Tri-State faces significant challenges in providing power at a competitive cost to so many rural areas, operating nearly 6,000 miles of transmission lines across the Rocky Mountains and plains. It has historically approached this challenge by relying on massive debt-funded investments in large coal plants and by requiring local entities to negotiate long-term contracts. A common contract by your local electricity association with Tri-State requires them to purchase 95% of all power from Tri-State, with a paltry 5% remaining for local power generation, such as renewables in your community, and for any purchase of cheaper power on the wholesale market. What’s more, Tri-State retains the rights to determine the meter pricing for this remaining 5% – a tool that it has used to undermine local independence in the past. While the organization loudly proclaims that one-third of its power comes from renewable sources, this supply includes a large share of legacy Federal hydroelectric projects and one of the lowest shares of wind and solar recently built by dozens of similar utilities across the country.

This strategy is increasingly failing rural Colorado, as a study led by former Colorado Republican State Senator Greg Brophy recently outlined. According to the study by Western Way, Tri-State is now charging 212% more for electricity than other regional wholesalers. From 2000 to 2016, it raised rates 12 times, doubling average energy costs, in large part to help pay for its crippling coal debt.

The Delta-Montrose Electric Association, one of the larger Tri-State members, saw its electricity rates grow 56% since 2005, prompting the Association to seek a contentious exit from its contract and go its own way. After months of protracted negotiations with Tri-State and a plea to the Colorado Public Utilities Commission to determine a fair exit price, DMEA recently announced that it had reached a settlement in principle with Tri-State. DMEA board members expect that exiting their contract and working with other suppliers will save its members $10,000,000 a year for the coming ten years. In July, the La Plata Electric Association in southwest Colorado – another of Tri-State’s largest members – announced its intention to follow DMEA in buying out its Tri-State contract and creating its own path.

Two other upheavals have rocked Tri-State’s landscape this year. State legislatures in Colorado and New Mexico passed some of the most aggressive carbon emissions reduction legislation in the country – including clean electricity goals that would be binding on Tri-State. In Colorado, the legislature voted to regulate Tri-State’s energy resource planning under the Colorado Public Utilities Commission, bringing it into the company of massive utilities like Xcel, which have worked with state regulators for years to craft win-win energy plans.

In a shock and awe response, Tri-State announced in June that it was responding to these collective developments by declaring its intent to seek federal regulation – something from which it has been exempt as a member-owned utility – under the Federal Energy Regulatory Commission (FERC). FERC regulation would move control of Tri-State’s rate planning and other key decisions to Washington, D.C. and away from the states in which it operates. This ground-shattering change of regulatory arena became public knowledge one month before Tri-State’s board of directors voted to approve it, leaving many local co-ops pleading with the organization for answers on why the move was being undertaken so quickly – and what long-term consequences it might entail. Several co-ops, backed by a letter from Colorado state lawmakers, openly protested the speed of the move. The final vote tally by member co-ops at the Tri-State board of directors meeting went uncounted and the move was approved.

While state lawmakers and agencies will retain some oversight and influence over Tri-State’s behavior, losing the power to help determine the rates which Tri-State can charge their citizens removes a major tool for leverage in policymaking. Tri-State’s future commitments in those states risk becoming unenforceable and hollow promises.

Following this lightning drama, Tri-State issued a press release introducing a self-titled Responsible Energy Plan. It promised to add over 200 MW of wind and solar generation to its existing 475 MW, growing its renewables mix to approximately 43% of its total generation, and to retire the 100MW Nucla, Colorado coal plant in 2020 – two years earlier than planned. It also promised to invest $500,000 in community transition in Nucla to cushion the blow of the 35 immediate jobs likely to be cut short from this plant, which ranks among its least efficient and most costly. Finally, Tri-State announced that it would be working with the Center for the New Energy Economy, a CSU institute headed by former Colorado Governor Bill Ritter, to convene a stakeholder process for future decisions.

However, these fast-moving development unfold, Tri-State reform starts at the co-op level, with citizens engaging in Board of Directors elections to elevate candidates who will champion the needs of our communities and to hold those boards to account. Last month, UVA members in Montrose and Delta counties helped win a hard-fought pair of races that saw reform candidates Jock Fleming and Ken Watson gain seats on the DMEA Board of Directors. The next round of Western Colorado co-op elections begins in 2020.

About the author

Arn McConnell

Arn's career includes more than 35 years of experience in broadcast media, online advertising and branding in both Western Colorado and New York City. He is a four-time Colorado Broadcast Award winner and has also won multiple Colorado Press Association Awards. Arn also teaches Film Expression at the college level. He lives with a dramatic pit bull and a grandiose cat and enjoys painting, animating, and exploring cinema in his spare time.