La Plata Electric Association’s effort to get a buyout figure as it seeks to free itself from a 30-year contract with Tri-State Generation and Transmission has been delayed before the Colorado Public Utilities Commission through Nov. 5.
Matthew Larson, a lawyer with Wilkinson, Barker, Knauer LLP, said the state’s PUC has extended a deadline to review exceptions, essentially appeals, of a recommended decision by one of the agency’s administrative law judges that favored LPEA.
PUC Administrative Law Judge Robert Garvey has ruled Tri-State’s refusal to provide a fair exit charge is unjust, unreasonable and discriminatory. LPEA has a contract with Tri-State that runs through 2050. The contract stipulates that Tri-State supply LPEA with 95% of the electric co-op’s power.
Since the recommended decision, Tri-State, LPEA and United Power, an electric utility in Brighton also seeking a divorce from Tri-State, have all filed exceptions objecting to some part of Garvey’s recommended decision.
In addition, Larson said a number of other cooperative electric utilities have filed exceptions to the recommended decision, but Larson said those filings are invalid because the other parties are not party to the filing before the state’s PUC.
Larson said the stay in proceedings “sounds more ominous” than it is. The stay in proceedings was expected and normal to give the Colorado PUC more time to study the exceptions, he said.
The matter of LPEA’s request for a buyout figure for its contract is also before the Federal Energy Regulatory Commission in Washington, and Larson reported one settlement conference on the filing has been held and a second one is scheduled for Nov. 7, two days after the PUC resumes its adjudication of the same matter.
It’s unclear which body will have final authority to determine which methodology will be used to determine a buyout figure for LPEA.
But Larson said he expects the state PUC, the preferred body for a ruling by LPEA, would move quickly after it resumes proceedings Nov. 5.
When the PUC resumes hearing the case, Larson expected it would schedule a deliberation meeting that would go through points made in the exceptions one by one and eventually come up with a final order.
Larson said FERC has said both the Colorado PUC and it have concurrent regulatory authority over the matter, until an exit fee methodology has been determined by FERC.
The whole matter also could end up in court.
Larson said he expected FERC proceedings to go on through the remainder of the year.
LPEA says a buyout would allow it to purchase electricity at a lower rate while at the same time getting more electricity from renewable sources – especially renewable power generated locally.
LPEA and United Power of Brighton signed long-term power contracts with Tri-State in 2007, and both now are seeking buyouts, saying the contracts limit the amount of renewable energy they can generate on their own and that they can find electricity cheaper than Tri-State’s rates on the open market.
LPEA is exploring not only a full buyout of its contract, but also a partial buyout or a new arrangement with Tri-State that would give it greater flexibility, especially in contracting for local renewable power.
Tri-State has said it already has loosened caps it had on renewable power generation and a buyout by LPEA and United would harm other smaller electric cooperatives that all have agreed to share costs of power generation and transmission under Tri-State’s generation and transmission umbrella.
In its exceptions, Tri-State says the recommended decision ignored due process requirements.
In addition, Tri-State says the recommended decision was insufficient and prejudicial because it relied on two complaining members while denying 29 other Tri-State members in Colorado, New Mexico, Wyoming and Nebraska the ability to participate despite their “substantial interests” in the matter.
When filing its exceptions, Tri-State CEO Duane Highley said, “If this recommended decision is allowed to stand, more than $1 billion in costs will be unjustly added to our remaining members’ electricity bills.”