Dive Brief:

• Tri-State Generation and Transmission Association on Wednesday announced a plan to allow cooperative members to generate more of their own power and a goal to reduce wholesale rates 8% by 2023.
• Tri-State said its board of directors approved the launch of partial requirements contracts starting with an open season in early 2021. There will be 300 MW available for members to self-supply, which represents 10% of Tri-State's system peak demand.
• The T&D utility has been criticized for its high rates and coal-heavy fuel mix, and several members have left or are seeking to leave its service. "We are going to need to much more than the proposed 8% reduction in wholesale power to be competitive," Bryant Robbins, United Power's acting CEO and Chief Operating Officer, said in an email. United is seeking to leave Tri-State's service.

Dive Insight:

Since January, Tri-State has been pushing to add renewables and reduce coal usage while also working to keep members from leaving.  

The new partial requirements contracts "will allow members to supply more power locally," the utility said in a statement. Under the new contracts, Tri-State members can self-supply up to 50% of their load requirements, subject to availability in the open season.

New self-supply contracts would be in addition to the current 5% self-supply provisions and a new community solar provision, the utility said. And Tri-State's "Responsible Energy Plan," announced in January, includes a strategy to eliminate coal in New Mexico and Colorado by 2030 and supply 50% renewable energy to its members by 2024.

As to its goal of lowering rates, Tri-State said its board of directors "recognizes the need to further support members facing economic challenges brought on in part by the coronavirus pandemic." It said the announcement was part of a 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,” Rick Gordon, chairman of the Tri-State board and director of the Mountain View Electric Association in Limon, Colorado, said in a statement.

But the T&D provider's efforts may not be enough for members looking to exit its service. United Power and Tri-State have been at odds over whether state or federal regulators have oversight of exit fees that would be required to terminate their supply arrangement. La Plata Electric Association is also seeking an exit charge.

United's Robbins said the utility is "very supportive" of Tri-State's efforts to lower rates but that it won't be enough to prompt a change of course.

"Unfortunately for United Power, we serve an area in which our competitors' rates are as much 25% to 35% less than ours. We are going to need much more than the proposed 8% reduction in wholesale power to be competitive," Robbins said.

He added that "based upon our preliminary analysis, we don't think the Partial Requirements/added flexibility has a positive impact on our needs. The approved plan is not what we proposed a couple of years ago and just doesn't appear viable to United Power and its membership. However, we hope it does meet the needs of the other Cooperatives."

United Power plans to "continue to pursue a just, reasonable and non-discriminatory exit charge," Robbins said.