DMEA Files with PUC Seeking Just and Reasonable Exit Charge from Tri-State
December 6, 2018 - Montrose, CO — Delta-Montrose Electric Association (DMEA), a member-owned and locally controlled rural electric cooperative in Montrose, Colo., today strongly reaffirmed its intent to exit membership in Tri-State Generation and Transmission Association (Tri-State), and has asked the Colorado Public Utilities Commission (PUC) to exercise its statutory authority over Tri-State as a public utility and adjudicate a just, reasonable and nondiscriminatory exit charge.
“DMEA and our Board of Directors have a fiduciary responsibility to serve the best interests of our members to remain a competitive, reliable and cost-effective co-op,” said DMEA Chief Executive Officer Jasen Bronec. “DMEA’s wholesale power costs from Tri-State have been escalating at an unsustainable rate. Tri-State's annual reports show that average member rates have increased 56 percent since 2005, which is more than double the increase in the Consumer Price Index over the same time period. This stands in stark contrast to the overall energy market in which prices have decreased significantly over the same period."
Today’s announcement culminates over a decade of negotiations between DMEA and Tri-State to stabilize rates and lift restrictions on DMEA’s pursuit of more local renewable energy generation.
Tri-State restricts rural cooperatives to a 5 percent limit for the amount of energy that they can produce on their own, which DMEA met two years ago. Since then, DMEA has been limited in its ability to capitalize on its energy-rich territory, despite the low cost and numerous benefits to the community.
In recent years, DMEA has tried to exercise its right to exit Tri-State consistent with Tri-State’s “core principle” of voluntary and open membership.Despite DMEA’s efforts, Tri-State has refused to provide a just, reasonable and nondiscriminatory exit charge. Under Colorado public utilities law, the PUC has legal responsibility to ensure that public utility rates and charges are just, reasonable and nondiscriminatory.
“While the decision to separate from Tri-State allows for significant economic benefit for our members - including stabilized rates, development of diverse and low-cost local energy, and the creation of new local jobs - we are seeking fair exit terms that will protect both Tri-State’s remaining members and the interests of DMEA’s members,” said Bronec. “Our filing asks the PUC to ensure that we pay our fair share, but only our fair share, in exiting Tri-State.”
Following Kit Carson Electric Cooperative’s securing a buyout from Tri-State for $37 million in 2016, DMEA has validated options that could provide wholesale rate relief if the PUC sets a just and reasonable exit charge for DMEA that would allow DMEA to withdraw from Tri-State on reasonable economic terms. Like Kit Carson, DMEA will partner with Guzman Energy, a Colorado wholesale power provider, upon withdrawing from Tri-State.
