Lawsuit Alleges Tri-State Generation and Transmission Conspired to Mislead Cooperative Members
United Power Lawsuit Outlines Impact of Fraudulent Actions of Power Supplier
Brighton, CO – United Power today filed a lawsuit in Adams County District Court alleging that their power supplier, Tri-State Generation and Transmission recruited three non-utility entities as part of a conspiracy to defraud United Power and try to hold it (and possibly other cooperative members) captive in expensive and restrictive power contracts. Court documents outline how the years-long scheme intentionally misled members and ultimately caused financial harm to United Power and the almost 95,000 meters it serves. Named along with Tri-State in the lawsuit are three non-utility entities – MIECO, Inc., Olson’s Greenhouses of Colorado, LLC, and Ellgen Ranch Company - whom Tri-State convinced to orchestrate the scheme designed to prevent the Colorado PUC from deciding a fair exit charge for United Power.
“We have only recently been made aware of these unacceptable transgressions at Tri-State. On behalf of the board and staff of United Power, I can only say that I am dismayed and disappointed by the actions of Tri-State’s staff and these non-utility entities who worked together to intentionally mislead United Power and any other members who were acting in good faith during this time,” stated Bryant Robbins, Acting CEO. “We have been transparent and ethical in our dealings, and we think it’s important that Tri-State and these other entities answer for their unethical behavior.”
Documents filed in District Court outline the years-long scheme to fraudulently direct the actions of United Power and other members to accept certain bylaw changes with the hidden agenda of allowing the admission of the three non-utility entities, in direct conflict with both State law and Tri-State’s own bylaws. United Power supported these bylaw changes with the belief that such changes would allow it to pursue a more flexible power supply arrangement with Tri-State. However, Tri-State suspended the use of the newly created class of membership immediately after utilizing the amended bylaw to allow these non-utility entities to join the membership under false pretenses. The suit contends that Tri-State directed the scheme that used the non-utility entities in an effort to secure FERC oversight and effectively eliminate the ability of the Colorado PUC to resolve matters such as exit fees and other potential disputes.
“United Power worked within the framework of the cooperative business model, intent on securing a solution that would support our sister cooperatives and provide some financial relief for our members while allowing us to stay within the Tri-State family,” stated Robbins. “Unfortunately, Tri-State was working behind the scenes with ulterior motives taking measures that would essentially handcuff United Power to the current restrictive contract.”
Two cooperatives have already left or are in the process of leaving the Westminster-based generation cooperative – New Mexico-based Kit Carson in 2016 and Delta-Montrose Electric Association pending final approval to leave in 2020 – both cited similar concerns with power supply flexibility and pricing in their exits. United Power had been working to secure a fair and just exit charge from Tri-State, but ultimately filed a case with the Colorado Public Utilities Commission when they were unable to make progress in negotiations with Tri-State. Since that time, Tri-State has continued to resist negotiations, all the while working behind the scenes to defraud the membership through a secret initiative intended to eventually prevent United Power from exiting Tri-State.
“We strongly believe the evidence supports why it has become very difficult to trust the intentions of our power supplier,” stated Robbins. “In filing this case, we hope that Tri-State and the three non-utility entities will have to answer for their ongoing deception.”
United Power is a member-owned, not-for-profit electric cooperative delivering electricity to nearly 95,000 meters at homes, business, and farms in Colorado's north central front range. For more information about the cooperative, visit www.unitedpower.com or follow them on social media at facebook.com/unitedpower or twitter.com/unitedpowercoop.
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