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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