Tri-State sets goal to reduce wholesale rates, implements partial requirements contracts in 2021

  • Board of directors sets goal to reduce wholesale rates 8% by the end of 2023.
  • Approves launch of partial requirements contracts starts with an “open season” in early 2021.
  • Efforts fulfill commitments in Tri-State’s Responsible Energy Plan, which recognizes the membership’s desire for affordable and flexible power, as well as the importance of keeping wholesale rates low for members during difficult economic times and the pandemic.

(October 7, 2020 – Westminster, Colo.) *REVISED* – In an ongoing effort to implement commitments it made in January 2020 through its Responsible Energy Plan, Tri-State Generation and Transmission Association announced today its ambitious goal to lower wholesale rates for its utility members by 8% by the end of 2023, as it continues to dramatically increase its renewable resources and reduce emissions.

The cooperative power supplier also announced a specific process to implement partial requirements contracts with its utility members. This will allow members to supply more power locally, beginning with an “open season” period in early 2021 for members to express specific interest in a portion of the 300 megawatts available.

“As we increase renewables and decrease emissions in our Responsible Energy Plan, we are also delivering on our commitment to lower, more competitive rates for our members, and greater contract flexibility to self-supply power and locally-produced renewable energy,” said Duane Highley, Tri-State CEO. “Today’s announcements are another step forward, as we continue to work to provide reliable, affordable and responsible energy.”

Tri-State will implement its 8% wholesale rate reduction goal over the next three years. Tri-State has achieved stable wholesale rates for the past four years and rates remain stable in 2021. The cooperative’s board of directors recognizes the need to further support members facing economic challenges brought on in part by the coronavirus pandemic. Today’s announcement, following a board meeting this week, is the first phase of plans to keep forecasted rates stable through 2050.

“Both our aggressive rate reduction goal and the additional contract flexibility keep Tri-State on-track to meet the targets put forward in our Responsible Energy Plan, and our energy transition is already delivering increasingly clean, affordable and reliable power,” said Rick Gordon, chairman of the Tri-State board and director of the Mountain View Electric Association in Limon, Colo.

Tri-State’s members broadly support the board’s actions.

“Today, the Tri-State board took a step forward to allow the potential of greater contract flexibility, which will help Poudre Valley REA achieve our 80 by 30 renewable energy goal,” said Jeff Wadsworth, CEO of Poudre Valley Rural Electric Association.  “When you couple this with Tri-State’s Responsible Energy Plan and their commitment to reduce rates, the near-term impacts are meaningful to our co-op and, most importantly, our member-owners. The clean energy transition has begun.”

Partial requirements contracts provide even more flexibility for member self-supply and renewables

Tri-State’s board of directors approved flexible partial requirements contracts. Utility members of Tri-State can express their intent to transition to partial requirements contracts by participating in an early 2021 open season period to allocate an aggregate 300 megawatts of system-wide member self-supply capacity. The open season capacity is 10% of Tri-State’s system peak demand.

Under the new contract, utility members can self-supply up to 50% of their load requirements, subject to availability in the open season, in addition to the current 5% self-supply provisions and a new community solar provision. In late 2019, the board of directors approved a membership Contract Committee’s recommendation to expand member opportunities for community solar projects.

The Contract Committee thoroughly reviewed proposals that could increase contract flexibility for member self-supply of power and the further development of local renewable resources. The committee worked to ensure that the partial requirements contract option provided needed flexibility while protecting the interests of all Tri-State utility members by ensuring that any member’s move to partial requirements does not shift costs to the other members.

“This is yet another milestone day for the Tri-State family, and cooperatives have again demonstrated how we deliver on our commitments,” Jack Johnston, CEO of Tri-State member Southeast Colorado Power Association said. “For more than a year, the Contract Committee of Tri-State’s members worked diligently through analytical evaluations to develop a new form of membership that would increase self-supply flexibility for those who want it, without penalizing those who do not.”

“Together, Tri-State’s membership debated and discussed, and ultimately the vast majority of our members agreed to what would work best and what was fair for all of us. That is the cooperative way,” Johnston said.

Tri-State noted that for several years, its members have taken advantage of provisions in their current contracts with Tri-State to develop renewable energy projects to serve up to 5% of their communities’ energy needs. These policies have been very successful: half of our members have chosen to take part in programs to develop local renewables, with 130 megawatts in place or under development.

Stakeholder process informed goal of Tri-State’s Responsible Energy Plan

Tri-State’s plan was informed by input from a collaboration with an external advisory group – convened and facilitated by Colorado Gov. Bill Ritter, Jr. and the Center for the New Energy Economy – composed of stakeholders gathered from across the region and across interests.

“Tri-State’s announcements today show they are meeting the commitments they laid out in January in their Responsible Energy Plan,” Ritter said. “We appreciate the opportunity to work with Tri-State and various stakeholders to reach this point, and look forward to continuing to work with Tri-State on its transition.”

Responsible Energy Plan commitments being met

Tri-State announced its Responsible Energy Plan in January 2020 and is leading a clean energy transition for the generation and transmission cooperative industry in Colorado and nationwide.

Major components of the plan include adding renewable generation, resulting in 50% renewable energy consumption by 2024; reducing emissions, including the closure of its coal-fired power plants in Colorado and New Mexico by 2030; support of local communities and employees during this transition ; advocating for a regional transmission organization to lower costs and increase renewable energy integration; expanding electric vehicle infrastructure and beneficial electrification to further reduce emissions; providing its membership with more self-supply and local renewable energy flexibility; and lowering its wholesale rates.

Tri-State retired its generation capacity at San Juan Generation Station in 2017, and in August 2020, electricity production ended at Escalante Station in New Mexico, and Tri-State no longer produces power from coal in New Mexico. Tri-State retired its Nucla Station coal-fired power plant in western Colorado in 2019. By 2030, when Tri-State retires its last generation unit at Craig Station, it will no longer produce electricity from coal in Colorado.

In addition, construction is already proceeding in Colorado on the first of its new renewable energy projects as part of the Responsible Energy Plan, and will continue to add renewables to help meet its members’ energy needs. The 104-megawatt Crossing Trails Wind Farm, to be owned and operated by EDP Renewables, is under construction near Siebert, Colo., in eastern Colorado.

About Tri-State

Tri-State is a not-for-profit cooperative of 45 members, including 42 utility electric distribution cooperative and public power district members in four states, that together deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. For more information about Tri-State an, visit www.tristate.coop.

By Brian Allmer - The BARN

Brian Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.