Tri-State wholesale rate to remain unchanged for third consecutive year
- Tri-State’s 2020 budget delivers continued rate certainty for membership, with no wholesale rate increase.
- Tri-State operating costs to remain flat for third year in a row, despite predicted 4.7 percent growth in member electricity for the same period.
September 11, 2019 – Westminster, CO – For the third year in a row, Tri-State Generation and Transmission Association announced that wholesale rates for its 43 member systems will not increase in the coming year. In addition, with strong focus on cost management and by taking advantage of low-cost renewable energy and competitively priced market power, Tri-State noted that expected operating costs also will remain flat for the third year in a row.
The 2020 Tri-State operating and capital construction budgets were approved Sept. 4 by the Tri-State Board of Directors. Budgets and rates are set annually by the board, which represents the association’s member cooperatives and public power districts in Colorado, Nebraska, New Mexico and Wyoming. Tri-State is subject to rate regulation by the Federal Energy Regulatory Commission, which will regulate Tri-State’s wholesale rate, similar to other wholesale power suppliers.
“Our competitive wholesale rates, which include all the costs to deliver power, have remained flat for four years. This provides our member systems and their consumer-members with great certainty, and upholds our mission of providing a reliable, affordable and responsible supply of electricity, in accordance with cooperative principles,” said Tri-State Chairman Rick Gordon.
Tri-State’s wholesale rate provides for the long-term, firm delivery of power to the cooperative’s members. The wholesale rate includes all of the services required for delivering power, including energy, capacity, ancillary services, transmission, and a wide range of other products and services.
Tri-State has aggressively increased its purchase of low-cost renewable energy and has taken advantage of low prices in the energy markets, when advantageous. The cooperative also has under taken numerous cost management initiatives that have kept costs flat.
Tri-State budgets total operating expenses of $1.21 billion, and a total capital construction budget of $190.7 million, for 2020. Tri-State’s operating costs have remained flat for the last three years, even as the energy Tri-State delivers has increased 4.7 percent for the same period. Tri-State’s capital budget includes investments in facilities to deliver power to its members and support the reliability of the grid. In July 2019, Tri-State reached an all-time record peak member load of more than 3,000 megawatts.
In addition to flat wholesale rates, as a cooperative, Tri-State returns capital to its members. The cooperative returned approximately $30 million in patronage capital to its member cooperatives in 2018. Unique to the cooperative business model, each year Tri-State allocates equity to its members, which is the difference between operating income and expenses for the year.
Although rates will not change, rates approved by the board will go into effect for next year on Jan. 1, 2020.
Other recent developments at Tri-State include:
- On Monday, it was announced that Tri-State would be joining the Southwest Power Pool’s Western Energy Imbalance Service (WEIS) market, along with Basin Electric Power Cooperative and the Western Area Power Administration. WEIS will launch in February 2021, and will provide “real time” dispatch energy from these participants, enhancing reliability, affordability and the increased use of renewables.
- The addition Sept. 3 of MIECO Inc. as its first non-utility member. The addition of MIECO, a wholesale energy services company, which supports Tri-State’s transition to cleaner generation resources, including renewable energy and natural gas. With the addition of MIECO, Tri-State became subject to jurisdiction by the Federal Energy Regulatory Commission (FERC).
- Unveiling on July 17 of the development of its “Responsible Energy Plan,” which includes a transition to a cleaner energy portfolio that also ensures reliability, increasing member flexibility, and sets a goal of lower wholesale energy prices. The plan also focuses on maintaining Tri-State’s strong financial position, while complying with aggressive carbon reduction, renewable energy and resource planning requirements; and
- Issuance on June 13 of Tri-State’s sixth request for proposals (RFP) for renewable energy resources. Previous Tri-State RFPs have resulted in power purchase contracts for 656 megawatts of utility- scale wind and solar resources. The RFP for long-term PPAs allows Tri-State to identify low-cost projects while continuing to capture the federal tax benefits for wind and solar projects for its members. As a not-for-profit cooperative, Tri- State utilized PPAs with developers to pass along the benefits of federal tax incentives to its members.