With renewables in mind, Colorado's coops ask FERC for help determining exit fees

Colorado’s cooperative utilities have called on FERC to help establish a more transparent process on exit fees.

Seven subsidiaries of utility Tri-State Generation and Transmission Association have complained to FERC for estimates on how much it would cost to leave. The request follows a December announcement from Tri-State of a USD 21b plan to add 1 GW of wind and solar resources and close New Mexico and Colorado coal plants by 2030.

The utilities include Wheat Belt Public Power District, La Plata Electric Association, Northwest Rural Public Power District, San Isabel Electric Association, San Miguel Power Association, Springer Electric Cooperative and United Power. According to the filing, all seven asked Tri-State for estimates which the utility refused to provide in January.

“The material facts in this case are not in dispute. Accordingly, the Commission should grant the

Complaint and direct Tri-State to perform the requested calculations without the need for hearing or settlement judge procedures,” the filing reads.

The sentiment echoes the exit difficulties of last year, when the Colorado PUC held a hearing to determine exit fees for La Plata and United Power. The PUC has been back and forth on whether or not it has the jurisdiction to set the exit rates, or if the decision should be up to FERC. In 2019 and 2020, utilities Kit Carson Electric Cooperative and Delta-Montrose Electric Association paid USD 37m and USD 136.5m to leave Tri-State, respectively.

In May, United Power told NPM that it wanted to leave Tri-State because it did not take advantage of the “extremely obvious” renewable opportunities available.

“We just desire for our members, per our members desires, a bigger mix of renewable opportunities or flexibilities,” said United Power Government & Regulatory Relations Officer Tom Whitmore. “Under our contract it’s very restrictive to add more local renewable projects and there’s a demand for that from businesses and membership as a whole.”

That sentiment seems to have changed with Tri-State’s latest IRP filing, which preferred scenario adds 4525 MW of renewables by 2040 and 200 MW of battery storage. However, even with that addition, only about 59 percent of its energy would come from renewables.

In a state that doesn’t allow CCAs, cooperatives are Colorado’s only option when it comes to more localized energy with customer’s renewable energy wants in mind. At present, it is unclear whether or not the ability to add renewables at a higher rate is currently influencing the cooperatives’ interest in leaving. But Holy Cross Energy, one of only four cooperative utilities in the state that doesn’t purchase energy from Tri-State, declared a 100 percent carbon-free goal by 2030 in December.

At present, cooperatives under Tri-State can only produce 5 percent of their own electricity, although the latest IRP calls for additional opportunities for coops to go beyond the cap.