Tri-State files major FERC settlement on its Open Access Transmission Tariff
- OATT settlement filing follows FERC approval of wholesale rate settlement.
- Settlement reduces OATT customer transmission rates and increases transparency.
- Tri-State remains focused on participating in western regional transmission organization.
(October 22, 2021 – Westminster, Colo.) Today, wholesale power supply cooperative Tri-State Generation and Transmission Association filed an uncontested, comprehensive settlement on the Open Access Transmission Tariff (OATT) it filed in 2019, after becoming subject to regulation by the Federal Energy Regulatory Commission (FERC).
Upon approval by FERC, the settlement will resolve all issues set for settlement and hearing procedures before a FERC administrative law judge in March 2020. The case involved numerous parties, including Tri-State’s transmission service customers, distribution utility members and a variety of other participants, as well as FERC staff.
The settlement filing is another significant step forward for Tri-State, which became subject to FERC ratemaking jurisdiction as of Sept. 3, 2019. Earlier this year, FERC approved a settlement of Tri-State’s first major rate case, which resolved key issues regarding the rates and terms for wholesale power service to its 42 distribution utility members in Colorado, Nebraska, New Mexico and Wyoming.
“We are delighted to have achieved another major FERC settlement, one that will provide benefits to Tri-State and our OATT transmission customers,” said Duane Highley, chief executive officer of Tri-State. “This is another critical milestone in Tri-State’s transition to full FERC regulation as a public utility. We appreciate the hard work by all involved, the engagement of the FERC staff and the many participants, and the guidance of the settlement judge in helping us bring this complicated case to a satisfactory resolution.”
The settlement provides several benefits to Tri-State’s OATT customers, including reduced rates and the provision of more information and transparency going forward. Among other things, Tri-State will make certain adjustments to load calculations, inputs and expenses in its Formula Rate Template for the 2019 Rate Year, the 2020 Rate Year, and prospectively, starting with the 2021 Rate Year. As a result, Tri-State’s Annual Transmission Revenue Requirement (ATRR) will be reduced, and eligible OATT transmission customers will receive refunds effective from March 26, 2020.
The settlement also reflects an agreed cost of capital, including a fixed return on equity and an assumed capital structure, consistent with the current treatment of Tri-State’s OATT-eligible facilities in the eastern portion of its transmission system now within the Southwest Power Pool (SPP). It establishes a moratorium on certain elements, including the cost of capital, and contains sunset provisions, under which Tri-State will be required to re-file its Formula Rate Template by 2026, or earlier if and when any eligible Tri-State facilities in the western portion of its transmission system are placed under the functional control of a regional transmission organization (RTO).
Concurrently, Tri-State filed a motion seeking to implement the settlement rates, on an interim basis, to enable its OATT transmission customers to realize the benefit, without delay, of reduced OATT rates. Tri-State intends to reflect these changes in its October transmission billings, which represent the start of the 2021 Rate Year.
Tri-State is rapidly moving through a clean energy transformation with its Responsible Energy Plan, which recognized the importance of organized markets to achieve renewable energy and emissions reduction goals. Today, 80% of Tri-State’s load is within an organized market. Eligible facilities in the eastern portion of Tri-State’s transmission system are already under the functional control of the Southwest Power Pool (SPP) RTO. Recently, Tri-State joined two energy imbalance markets – SPP’s Western Energy Imbalance Service and the California Independent System Operator’s Western Energy Imbalance Market – to centrally dispatch participants’ energy throughout the region, enhancing electricity reliability and affordability. Tri-State and other regional utilities and transmission providers are evaluating the western expansion of the SPP RTO, which approved terms and conditions for a western RTO expansion in July 2021.
Tri-State is a power supply cooperative of 45 members, operating on a not-for-profit basis, including 42 utility electric distribution cooperative and public power district members in four states that together deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. For more information about Tri-State, visit www.tristate.coop.
Certain information contained in this press statement are forward-looking statements including statements concerning Tri-State’s plans, future events, and other information that is not historical information. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described from time to time in Tri-State’s filings with the Securities and Exchange Commission. Tri-State’s expectations and beliefs are expressed in good faith, and Tri-State believes there is a reasonable basis for them. However, Tri-State cannot assure you that management’s expectations and beliefs will be achieved. There are a number of risks, uncertainties and other important factors that could cause actual results to differ materially from the forward-looking statements contained herein.