Tri-State provides update to Colorado PUC
Colorado, August 28, 2008 - Tri-State Generation and Transmission Association, a not-for-profit wholesale power supplier owned by 44 member systems, voluntarily updated the Colorado Public Utilities Commission on August 13 regarding cooperative issues and resource planning. Tri-State’s last update before the commission was in 2006.
As an electric cooperative, Tri-State is not rate-regulated by the commission, but for informational purposes the association files a resource plan with the commission. The association is regulated by its board of directors. Each of Tri-State’s 44 member systems appoints a representative to Tri-State’s board and each board member has an equal voice in governance of Tri-State. The board meets monthly and sets budget and rates annually.
“Tri-State’s board of directors serves as the association’s regulator,” said Ken Reif, the association’s senior vice president and general counsel. “Like other electric cooperatives, Tri-State has no profit incentive or need for bonus structure to do what is right for the member systems and their consumer-owners.”
Public utilities commissions regulate investor-owned utilities to ensure ratepayers’ interests are balanced against those of utility shareholders. In the cooperative system, ratepayers are consumer-owners that own and manage the utility, ensuring that ratepayers’ interests are protected.
Reif noted to the commission that Tri-State is also regulated at the federal level. “Tri-State sets rates and operates under regulations of the federal Rural Utilities Service and operates its transmission system under a Federal Regulatory Energy Commission (FERC) filed Open Access Transmission Tariff.”
Tri-State is subject to reliability standards required by the Western Electricity Coordinating Council (WECC) and the North American Electric Reliability Corporation (NERC). The association is also subject to limited state regulation in areas enumerated in Colorado Public Utilities Commission rules.
Tri-State and its member systems have all-requirements contracts where the association provides for essentially all the electricity requirements of its members. Forty-two of Tri-State’s members have contracts to 2050; two members have contracts to 2040. In addition to power supplied by Tri-State, the association has several policies that support members’ development of their own renewable energy and distributed generation supply.
“Tri-State’s board has adopted policies to ensure that members can develop their own local renewable energy resources,” Reif said. “In addition, the board has introduced a renewable energy incentive program that provides financial support for new renewable energy projects.”
In addition to supporting local renewable energy projects, Tri-State supported a 10 percent Colorado renewable portfolio standard for electric cooperatives and is reviewing several renewable energy projects. With other utilities in New Mexico, Tri-State released a request for proposals to develop a concentrated solar power project. Tri-State is also a founding member of the National Renewables Cooperative Organization, a collaboration of electric co-ops nationwide jointly working to meet their renewable power legal requirements and portfolio goals.
Tri-State also updated the commission on its enhanced energy efficiency and demand-side management programs it coordinates with its member cooperatives.
“Efficiency and load management programs can help consumers better manage energy, save money and reduce the amount of power Tri-State must generate,” Reif said. “We are also working with our largest energy consumers on an Emergency Load Management Program to address reliability and market issues when power is in short supply.”
Tri-State’s member systems’ energy requirements have grown an average of four percent each year over the past 10 years, and this growth is expected to continue. To meet growing loads, Tri-State must develop new generation facilities while continuing to invest in additional demand and supply-side resources.
Tri-State identified a unique challenge to the commission. The association does not have a baseload power plant on the eastern side of its system that can serve around-the-clock power to eastern Colorado and help alleviate constrained transmission paths in other portions of its delivery system.
“Most of the power we deliver to eastern Colorado comes from power plants on the Western Slope and in Wyoming,” said Joel Bladow, Tri-State’s senior vice president of transmission. “As electric demands continue to grow, transmission roadblocks prevent us from moving additional power into eastern Colorado. Developing facilities on the eastern side of our system will allow us to better balance our interconnected system and more reliably serve all of our members,” Bladow said.
Bladow noted that Tri-State is working with Xcel Energy toward developing several transmission projects that would serve both reliability needs and serve the state’s renewable energy zones.
To balance Tri-State’s system, the association is developing a power plant site in southeastern Colorado, north of the Town of Holly in Prowers County. Development activities include obtaining sufficient land and water needed to operate a power plant and collecting environmental data.
“The site could include a number of different generation technologies and fuel sources – including natural gas, coal and nuclear – to serve our members’ electricity requirements,” said Mac McLennan, Tri-State’s senior vice president of external relations. “We are thoroughly evaluating all options.”
The commission was updated on Tri-State’s evaluation of generation technologies, including the development of low-emissions technologies that can reduce greenhouse gas emissions.
“Tri-State is investing in research, development and demonstration projects aimed at meeting both energy and environmental goals,” McLennan said. “We are also looking at public and private partnerships that can advance new technologies while protecting the rates of our consumers.”
Tri-State executives also discussed with the commission the association’s participation in a dialogue with the Ritter Administration regarding the Governor’s Climate Action Plan.
“The (Colorado) Governor’s Climate Action Plan recognizes the differences between urban, investor-owned utilities and the electric cooperatives that primarily serve rural areas,” Reif said. “Tri-State will have a dialogue on these issues with the Administration and we will work to ensure any climate strategies support reliable, low-cost electric service without adversely affecting rural economies.”
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