Brighton, CO – On March 24, the United States Court of Appeals for the Tenth Circuit (Tenth Circuit) issued an opinion upholding multiple Federal Energy Regulatory Commission (FERC) orders dating back to December 2023 that adopted an exit-fee methodology for distribution cooperative members wishing to exit their all-requirements power supply contracts with Tri-State Generation & Transmission (Tri-State).
Litigation over the exit process and the fee under Tri-State’s Rate Schedule No. 281 has taken United Power and several other former Tri-State members on an odyssey to the Colorado Public Utilities Commission, Colorado state court, more than six years of proceedings at FERC, a review in the United States Court of Appeals for the District of Columbia Circuit, and finally the Tenth Circuit where the judges heard four separate appeals of FERC’s orders.
In denying Tri-State’s multiple petitions, the Tenth Circuit held “we have no doubt that FERC sufficiently weighed competing views on the best approach to the exit-fee methodology. In a 200-plus page order, FERC assiduously weighed the proposed exit-fee methodologies and the parties’ competing views. It then reweighed the methodologies and competing views on rehearing.” Moreover, the Tenth Circuit noted that “it would be inappropriate for the [exit-fee] payment to shield Tri-State from its other business risks.”
United Power has always recognized that it would have to pay an exit fee, but it has sought a fair, transparent process, and a just and reasonable methodology for establishing the amount. The cooperative’s Chief Legal Officer Robin Meidhof notes that “Tri-State’s insistence that United Power pay $1.6 billion was never reasonable and the Tenth Circuit opinion affirmed that ‘record evidence supported a balance sheet approach’ adopted by FERC.” Pursuant to FERC’s orders, Tri-State ultimately received $627.2 million from United Power, but $296.3 million of that amount was a credit for transmission service for the next 40 years.
The Tenth Circuit opinion explained that due to the technical understanding and policy judgment required to determine the exit-fee methodology, “FERC, not this or any other court, regulates electricity rates.” Meidhof shared, “We hope this decision brings closure for Tri-State and the guidance that all its members have been seeking for far too many years. At a time when all utilities are working to address challenges and increasing costs to provide safe, reliable, and affordable electricity to their members/customers, we want to be collaborating with Tri-State, not continuing to litigate a matter that should have been resolved years ago.”
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, serving more than 117,000 meters. Its 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. For more information about United Power, visit www.unitedpower.com or follow the cooperative on Facebook, X, LinkedIn, YouTube, and Instagram.
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