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Colorado considers more oversight of 4-state generator

Judith Kohler
The Associated Press
Aspen, CO Colorado

DENVER ” A power struggle is brewing as state regulators consider increasing oversight of Colorado’s second-largest electricity provider to help the state move toward a clean-energy future.

Regulators are taking comments on proposals that range from continuing their hands-off approach to Tri-State Generation and Transmission Association to full oversight of the nonprofit’s planning. After going through the comments, the Colorado Public Utilities Commission will decide what’s next.

Driving the PUC’s look at Tri-State are concerns about climate change, uncertainty about future development costs and state mandates for more renewable energy. All that warrants a comprehensive look at statewide energy use, the commission says.



But Tri-State questions the commission’s legal authority to oversee its plans. The wholesale electric supplier, based in the Denver suburb of Westminster, stresses that it’s governed by federal agencies and elected boards of the 44 cooperatives it serves in Colorado, Nebraska, New Mexico and Wyoming.

“We are regulated by our consumers,” Tri-State spokesman Lee Boughey said. “We think further regulation over our actual resource planning is unwarranted.”




Boughey points to Tri-State’s recent announcements that it’s building a large solar plant in New Mexico and looking at focusing less on coal as evidence that it doesn’t need prodding from state regulators to join in Gov. Bill Ritter’s “new energy economy.”

Ritter, who appointed all three members of the current PUC, praised Tri-State as a leader in the effort while speaking at the association’s annual meeting in April.

Tri-State’s critics say the association has taken some good first steps but lags far behind in renewable energy and energy efficiency. It gets 72 percent of its power from coal and roughly 1 percent from wind and solar.

By contrast, Minneapolis-based Xcel Energy, Colorado’s largest electric utility with 1.4 million customers in the state, gets 10 percent of its power from renewable energy sources. State law will require Xcel to raise that to 20 percent by 2020.

Proponents of stronger oversight of Tri-State say an about-face by the state of Kansas to allow a proposed coal-fired plant bolsters their arguments. Tri-State, a partner in the once-scuttled venture, on May 4 hailed an agreement between Kansas Gov. Mark Parkinson and Sunflower Electric Power Corp. to go ahead with an 895-megawatt power plant in southwest Kansas.

“Tri-State immediately put out a press releasing saying they’re excited about the agreement,” said Pam Kiely of Environment Colorado. “That only serves to underscore how a body like the PUC should be engaged with Tri-State.”

Tri-State needs state approval for transmission lines, power plants and other facilities. Unlike Xcel Energy, an investor-owned utility, it doesn’t need state approval of its resource plan. The plan includes projected demands for electric power, and the source and type of power the utility expects to use.

Every four years, Tri-State shares its plans with the PUC and each year provides an update. But the association refused last year to provide more information, saying the commission didn’t have jurisdiction. Rules passed by the PUC in 2002 said Tri-State’s plan doesn’t need state approval.

But “the energy world has changed since 2002,” the PUC said in its Jan. 28 notice that it is investigating whether to change how it deals with Tri-State. “The technical, environmental and political landscape facing utilities, their customers and their regulators has been made-over since that time,” the commission said.

The PUC says it has clear legal authority to consider Tri-State’s power generation and transmission facilities. It makes sense, then, to explore whether state rules on utilities’ plans mesh with its duty to asses the need for new facilities, the commission said.

“I think what the commission is trying to do is ensure the resource choices Tri-State is making are in the public interest, consistent with state energy policy,” said John Nielsen of Western Resource Advocates, a Boulder-based environmental law and policy group.

Tri-State insists that the PUC doesn’t have the authority to weigh in on its resource plan. It contends that more state oversight would increase its costs and could boost electric rates.

More state involvement would also duplicate regulation by the federal government, the Western Area Power Administration and the electric co-ops that own it, the association says. Tri-State spokesman Boughey said Tri-State is different from investor-owned utilities, which regulators oversee to balance the interests of rate payers and shareholders.

“Our rate payers are the shareholders,” Boughey said.

Colorado law will require electric co-ops to get 10 percent of their energy from renewable sources by 2020. Tri-State, as the co-ops’ supplier, intends to diversify its energy mix, and the possibility of the new coal plant being built in southwest Kansas won’t sidetrack that, Boughey said.

Steve Szabo of Longmont, a Poudre Valley Rural Electric Association customer, said he would feel more sure of that if the state reviewed Tri-State’s plans. Szabo, who ran unsuccessfully for the co-op board this year, said he’s concerned that the coop’s rates could rise if coal becomes more costly due to federal regulation of greenhouse gases.

“Tri-State is making an effort. How far they’re going to move forward, I don’t know,” Szabo said. “I think if there weren’t environmental groups or grassroots groups to push them forward, they probably wouldn’t have done much.”


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