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Complaints Filed Over Tri-State’s Reliance on Costly Coal

Date
September 5, 2018
Contact
Jeremy Nichols, (303) 437-7663, jnichols@wildearthguardians.org
In This Release
Climate + Energy
Denver, CO – WildEarth Guardians today filed complaints with four state utility commissions calling for investigations into Tri-State Generation and Transmission’s costly reliance on coal and the company’s electricity rates.

In conjunction with filing complaints, WildEarth Guardians also greeted Tri-State Generation and Transmission Board of Directors at their annual meeting in Westminster, CO with brick-wall banners reading “Coal Costs” and “Go Renewable.”

“It’s time for Tri-State to read the writing on the wall,” said Jeremy Nichols, Climate and Energy Program Director for WildEarth Guardians. “There’s no denying that coal costs and it’s high time that Tri-State and its Board of Directors start powering the American West with cleaner, more affordable renewable energy.”

Today’s complaints, which were filed with utility commissions in Colorado, Nebraska, New Mexico, and Wyoming, come on the heels of recent reports, including an August 2018 report by the Rocky Mountain Institute, that have found a move away from coal to renewable energy could reduce rates and save Tri-State’s members hundreds of million of dollars.

Tri-State Generation and Transmission Association provides wholesale power and transmission services to 43 member rural electric cooperatives in Colorado, Nebraska, New Mexico, and Wyoming. In total, these members serve nearly a million customers, mainly in rural communities.

More than 40% of the company’s electricity is generated by coal-fired power plants in Colorado, Arizona, New Mexico, and Wyoming. The company also has ownership in five coal mines, including the Colowyo mine in northwest Colorado and the Dry Fork mine in northeast Wyoming.

Reports have found the costs of maintaining Tri-State’s existing coal-fired power plants and mines are more expensive than developing or purchasing new renewable energy.

“If Tri-State retired its coal and instead developed new renewable energy, it would save its members money, protect our clean air and water, and promote more economic development,” said Nichols. “There is a win-win solution at hand, but sadly, Tri-State seems beholden to coal, which is nothing but lose-lose.”

Tri-State has come under fire by several members for its costly reliance on coal. All of the company’s members are locked into long-term contracts that require them to purchase at least 95% of their power from Tri-State, regardless of the cost.

Many members are eyeing local renewable energy development as a means to become more independent and obtain more affordable, cleaner, and economically lucrative electricity, but are constrained by Tri-State’s contracts.

In 2016, former member Kit Carson Electric Cooperative in northern New Mexico bought out its contract with Tri-State. Several remaining members, including the Delta Montrose Electric Association in western Colorado, the La Plata Electric Association in southwest Colorado, and others are considering leaving Tri-State as well.

As Tri-State faces member defection, other members face the prospect of higher rates and higher financial burdens, which could ultimately be a recipe for credit downgrades and potentially bankruptcy.

Today’s complaints are calling on utility commissions to exert their regulatory authority and investigate whether Tri-State’s wholesale rates and other charges are “just and reasonable.”  In Colorado, WildEarth Guardians called on the Public Utilities Commission to begin regulating Tri-State and the company’s rates as required by state law.

“This is about energy justice,” said Nichols.  “Tri-State’s charges to its members are completely out of line with the state of energy economics and it’s high time that utility regulators investigate whether this is reasonable.”

The complaints also call on utility commissions to investigate whether Tri-State’s rates are reasonable in light of the company’s failure to account for coal mine reclamation liabilities, in light of an exorbitant renewable energy ad campaign, and in light of the company’s restrictive contracts with its members.

Although Tri-State has committed to retiring some of its coal-fired power generation over the next several years, the company remains heavily dependent on coal and will be for the foreseeable future.

Today and tomorrow, Tri-State’s Board of Directors are meeting at the company’s headquarters in the Denver metro area.  WildEarth Guardians hope is that the Board begins to make more aggressive moves away from coal and acknowledges the need to save its members money and promote local renewable energy development.

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