Colorado’s Delta-Montrose Electric Association is bailing out of the Tri-State Generation and Transmission group but it will have to fork over about $86 million to do it.
Reports indicate the arrangement still needs approval by the Federal Energy Regulatory Commission and the settlement means Delta-Montrose will pay $26 million for the purchase of facilities and forfeit $48 million in patronage capital.
DMEA’s exit follows a 2019 settlement agreement between Tri-State and the utility, and doesn’t mean other electric providers are closer to exiting the G&T provider’s service. But the dollar amounts involved do provide a useful data point, officials said.
“The exit charge provided to DMEA gives us one more piece of information to help determine the feasibility of doing something similar at LPEA,” La Plata CEO Jessica Matlock said in a statement to Utility Dive.
Tri-State member cooperatives have been critical of the utility’s coal-heavy generation mix and agreements requiring them to purchase 95% of their power from Tri-State through 2050. Colorado regulators are preparing to determine the appropriate cost for LPEA and United to leave Tri-State’s service.
Exiting Tri-State will allow LPEA to provide its customers with lower power costs, a cleaner energy portfolio, increased energy resilience, and local-homegrown energy, said Matlock. The Tri-State board has approved a contract termination methodology with a standard approach applicable to any utility, to withdraw early from Tri-State.
But LPEA is not satisfied with that approach.
“We are concerned that the new methodology approved by the Board will result in a bloated exit charge for us, so we will continue our case at the Colorado PUC to get an exit charge that is consistent with Colorado law and the best deal for our members,” Matlock said.
Source: Utility Dive