Dynamic Calculators Included in Recent FERC Exceptions Filing

Brighton, CO - United Power has filed two exit fee calculators in conjunction with its response to the Federal Energy Regulatory Commission (FERC) initial decision by Administrative Law Judge Renee Terry. These calculators may be used to assist FERC and others as they evaluate the impact of (1) United Power’s proposed balance sheet approach (BSA) incorporating the most recent available data and (2) certain modifications to the BSA proposed by FERC trial staff and adopted by the initial decision. 

The tools allow all 42 utility members to assess their exit fees from Tri-State Generation and Transmission Association (Tri-State) under (1) United Power’s as-filed BSA (“Appendix A”) and (2) the BSA implementing certain adjustments adopted in the initial decision (“Appendix B”). Working copies of the calculator tools, definitions, and descriptions can be found at www.unitedpower.com/powersupply.

The Appendix B fees are modeled based on FERC staff’s exemplary calculations previewed during the hearing process that were adopted in the initial decision, as well as publicly available data, such as Tri-State’s annual financial reports. Each of the 42 utility members can enter a desired departure date and select variables implementing the exit options available under the initial decision. The Appendix B model also calculates alternatives proposed by United Power in its concurrently filed exceptions brief (e.g., a principled 10-year revenue averaging option and transmission revenue adjustment that United Power describes in the brief). These alternatives improve upon the calculations reflecting the initial decision’s overarching principle that the exit fees should be based on the net costs Tri-State incurred to serve the exiting member.     

“We appreciate the hard work by FERC staff in proposing solutions for departure from our power supplier that are in most respects aligned with what United Power has consistently advocated as a fair outcome,” said Mark A. Gabriel, President and CEO of United Power. “By following United Power’s balance sheet approach, everyone can calculate their actual cost to depart. This is critical for future planning for our current power supplier and its utility members. Though the initial decision modifications present implementation questions and other obstacles that we challenge in our exceptions brief, we believe the decision’s principles chart a course toward members’ fair transition to competitive supply and open access.”

United Power has formally indicated its departure from Tri-State, effective May 1, 2024. Learn more about United Power’s departure plan at www.unitedpower.com/powersupply.

About United Power

United Power is a member-owned, not-for-profit electric cooperative, delivering electricity to homes, farms, and businesses throughout Colorado’s northern front range. The cooperative is one of the fastest-growing electric co-ops in the nation, and in June 2021 joined the elite ranks of cooperatives serving more than 100,000 meters. The 900-square mile service territory extends from the mountains of Coal Creek and Golden Gate Canyon, along the I-25 corridor and Carbon Valley region, to the farmlands of Brighton, Hudson, and Keenesburg. United Power is also a founding member of the NextGen Cooperative Alliance, which is dedicated to expanding the power supply and procurement options available to distribution co-ops and reforming the traditional generation and transmission business model. For more information about United Power, visit www.unitedpower.com or follow them on Facebook, Twitter, LinkedIn, YouTube, and Instagram.

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It has been an eventful and exciting late summer and early fall. United Power was able to mitigate the financial impact of record peaks with the help of demand response and load control tools, such as our Smart Rewards thermostat program and our managed electric vehicle charging program, United EV.

At a time of the year when weather can create challenging situations for electric grids, our system held up well. The investments we made in our distribution network on our members’ behalf, combined with our active wildfire mitigation programs, resulted in few operating issues. We run one of the best networks in Colorado – and probably the country – thanks to the great staff and alignment with Our Cooperative Roadmap (Roadmap), which emphasizes a continual optimization of our distribution system.

Another key pillar in our Roadmap is providing flexible, affordable, and sustainable power. United Power is one step closer to obtaining lower cost, cleaner power for our members thanks to a recent ruling from an administrative law judge at the Federal Energy Regulatory Commission (FERC) regarding the cooperative’s exit fee from our current wholesale power supply contract. While this is just part of the process, it is a major step in the right direction.

Our decision to depart from our current supplier is based in economics. United Power members pay over market price for their power and transmission while living with a choke collar that caps our ability to generate local power at 5%. We are penalized for being more efficient and deploying innovative energy solutions, like battery storage. We are even prevented from adding resources within our footprint, meaning our communities do not receive the financial benefit of companies wanting to invest in renewables close to home.

It is important to remember the decision to seek FERC oversight was our power supplier’s alone. United Power did not support the decision for a number of critical reasons, chief among them the loss of local control to set rates, combine cooperative needs, and jointly manage costs. 

In contrast, one of the greatest strengths we have as a cooperative is local control through your elected Board of Directors. This ties to another critical pillar in our Roadmap – empowering and engaging our members and communities. Your Board members come from your towns and understand the values and concerns of each community’s residents. They provide direct oversight of the cooperative and hold the power to establish rates, but they ultimately answer to members as representatives of their communities.

I have recently been honored to present on the topic of changes within the electric industry at local chambers of commerce and regional energy conferences. I would be pleased to address any similar organizations about the future of the industry and anticipated changes to it. If you are involved in a local organization wishing to hear about our initiatives, just send an email and someone will reach out to set up a presentation.

Finally, October was Cybersecurity Awareness Month. United Power remains vigilant to threats our system faces as we strive to achieve and maintain business agility and resiliency through information and operational technology, which is our fourth and final Roadmap pillar.  We cannot let our guard down, given there are those who wish to do harm to the electric grid. 

As always, please feel free to reach out to me with your questions and concerns. It is an honor and privilege to serve you and the great staff at United Power.

Brighton, CO - After years of legal battles, United Power is one step closer on its path forward to buy out of its existing wholesale power contract with Tri-State Generation and Transmission (Tri-State). The methodology, defined by the Federal Energy Regulatory Commission’s (FERC) Administrative Law Judge (ALJ) Renee Terry, provides a way for all generation and transmission members to determine their cost to exit and will give United Power flexibility to move forward with its plan to leave the power supplier. The ALJ’s initial decision orders an exit fee based upon United Power’s proposed framework, and wholesale rejects Tri-State’s proposed $1.6 billion fee for United Power as excessive and unsupported. While the ALJ directed limited modifications to United Power’s proposal, the decision reaffirms United Power’s longstanding position that it should be able to leave by paying a reasonable exit fee. United Power is currently evaluating the exit options presented in the Judge’s initial decision, which is subject to further briefing and Commission review before it becomes effective.    

“I must first acknowledge the FERC Administrative Law Judge for her thorough and thoughtful assessment of the voluminous amount of material as well as the various statements and arguments she reviewed to reach her decision,” said Mark A. Gabriel, President and CEO of United Power. “We are pleased to finally have a course for the future in our quest to lower our power costs for our members and have more control over how the power we purchase is generated.”

United Power has been battling its power generation supplier since 2019 when the cooperative asked the Colorado Public Utilities Commission (PUC) to intervene in the dispute and help determine a fair and equitable buyout cost. As the case wound through the PUC process, Tri-State admitted additional non-utility members, triggering the generation cooperative to fall under FERC jurisdiction. While the PUC affirmed United Power’s buyout methodology, they deferred to FERC to determine the final opinion. 

“When we first began negotiating with our power supplier for an exit cost, they had already released two other members from their contracts, using methodologies that were far different than what they had proposed for United Power,” said Gabriel. “We have been willing to pay a reasonable exit fee, but our power producer never offered a methodology that we considered to be fair or equitable.”

The power market is in a unique period of growth and change, and United Power wants to take advantage of the opportunity to diversify its generation mix where possible. A leader in renewable energy, the cooperative added Colorado’s first community solar farm in 2009 and has since added solar and methane gas generation as well as batteries to provide more than 84 megawatts of electricity to the local electric grid. The current wholesale power contract limits the cooperative to purchasing only 5% of their power through sources of this type.

“Exercising control over the cost and make up of our power generation is the future of the electric industry,” said Gabriel. “We know we can lower costs for our members and take advantage of many of the new opportunities that exist to purchase locally produced renewable resources. The electric cooperative of the future can no longer be restrained by old paradigms that only produce power from centrally located sources far from where it is consumed.”

Earlier this month, the DC Circuit ruled that FERC had final jurisdiction over setting the methodology that would be used to arrive at the final exit cost for the Brighton, Colorado based electric cooperative.

United Power is a member-owned, not-for-profit electric cooperative, delivering electricity to homes, farms and businesses throughout Colorado’s northern front range. The cooperative is one of the fastest-growing electric cooperatives in the nation, and in June 2021 joined the elite ranks of cooperatives serving more than 100,000 meters. The 900-square mile service territory extends from the mountains of Coal Creek and Golden Gate Canyon, along the I-25 corridor and Carbon Valley region, to the farmlands of Brighton, Hudson, and Keenesburg. United Power is also a founding member of the NextGen Cooperative Alliance, dedicated to expanding the power supply and procurement options and reforming the traditional generation and transmission business model. For more information about the cooperative, visit www.unitedpower.com or follow them on social media Facebook, Twitter, LinkedIn, YouTube and Instagram.

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Historic Hotline School Faces Relocation Due to Commercial Development

Brighton, CO – United Power’s Board of Directors approved a $20,000 contribution to the Mesa Hotline School’s relocation fund at its regular meeting in August. Mesa Hotline School provides training and education to lineworkers at cooperatives, municipal electric utilities, and even investor-owned utilities like Xcel Energy. The school learned it must find a new site for its campus due to commercial development at its existing location. The cooperative’s contribution will help the school meet approximately 20% of its relocation costs. 

The Mesa Hotline School was formed in the 1960s at Mesa College following an inquiry from two cooperatives located on Colorado’s Western Slope, Empire Electric and Yampa Valley. Fast-growing local cooperatives needed a state-of-the-art facility that could provide the right kind of training and education for their lineworkers. The school enrolled its first class of 59 students in 1966. In the half century since, membership has grown from 15 members to nearly 80, representing electric utilities of all sizes throughout the country. In 2022, more than 100 instructors and volunteers helped provide training to approximately 600 lineworkers enrolled in the school’s various programs. 

“The Mesa Hotline School has had a mutually beneficial relationship with United Power for many years,” said Brent Sydow, United Power’s Vice President of Operations. “Working foremen from United Power have invested hundreds of hours at the school teaching courses to both young and experienced lineworkers, and our lineworkers and apprentices have received the highest level of training through the school’s programs and course selections.”

Courses include underground and overhead equipment training, high tension stringing, and simulated high voltage training. Industry vendors also conduct training classes to showcase the latest tools and technology. Additionally, United Power utilizes the school’s educational materials to help progress its apprentice lineworkers toward qualification for the journeyman certification. 

When the school received its notice about finding a new location, it began soliciting members for assistance. The relocation costs include site development, facility materials, training equipment, and more. The Mesa Hotline School launched a fundraising campaign this summer with the goal of raising $100,000 in preparation for its next class in May 2023. For more information about the hotline school, go to www.mesahotlineschool.com. 

United Power is a member-owned, not-for-profit electric cooperative, delivering electricity to homes, farms and businesses throughout Colorado’s northern front range. The cooperative is one of the fastest-growing electric cooperatives in the nation, and in June 2021 joined the elite ranks of cooperatives serving more than 100,000 meters. The 900-square mile service territory extends from the mountains of Coal Creek and Golden Gate Canyon, along the I-25 corridor and Carbon Valley region, to the farmlands of Brighton, Hudson, and Keenesburg. United Power is also a founding member of the NextGen Cooperative Alliance, which is dedicated to expanding the power supply and procurement options available to distribution co-ops and reforming the traditional generation and transmission business model. For more information about United Power, visit www.unitedpower.com or follow the cooperative on Facebook, Twitter, LinkedIn, YouTube, and Instagram.

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