Today the Colorado Public Utilities Commission (PUC) heard public comments on resource planning rules for Tri-State Generation and Transmission. This is an important process which will create the guidelines for how Tri-State’s next Electric Resource Plan is implemented. TWW called on the PUC to ensure that the final ERP rules are fully transparent and ensure competitive all source bidding to make sure that Tri-State’s local cooperative members and ratepayers receive benefits from the lowest cost resources.
More specifically with regard to transparency, TWW noted:
TWW believes that a full transparency is required for a successful ERP process. Tri-State recently announced its “Responsible Energy Plan” but it is unclear how this facilitated stakeholder process will be incorporated with current and past ERP stakeholder requests. TWW trusts that the “Responsible Energy Plan” will follow the traditional ERP stakeholder process and will adhere to the PUC’s new ERP rules formed in this proceeding, as well as providing opportunities for local cooperative members to weigh-in on the plan.
Full transparency is also needed with regard to the data and information that Tri-State will be submitting to the PUC for its ERP to fully understand the complicated demands and needs of the Tri-State system. TWW agrees with United Power, in their comments to this proceeding on September 25, 2019, with respect to the need for disaggregated data and for disclosure of members that have left or will be leaving the system and members that are intending to move to partial contracts. Submitting aggregated data on energy and demand forecasts would be worthless for planning purposes and could lead to significant miscalculations of Tri-State’s complicated and interconnected system. 3605(b) of the proposed Rule would require that Tri-State submit energy and demand forecasts on a disaggregated basis for all of the member cooperatives is key to providing a full understanding of the system needs and requirements during the planning process.
The ERP rules should also require transparency around the debt levels that Tri-State maintains. Moody’s Investor Service recently noted, that the situation with Tri-State and Delta-Montrose “exemplifies a situation where the [rural cooperative’s] interest does not align with the [Tri-State] creditors’ interest.” TWW has noted the connection between Tri-State’s debt service requirements on its $3 billion in debt and the impact on rates paid by local cooperatives. A clearer picture of how the existing debt load impacts future resource decisions and rates would benefit rural cooperative rate payers.
On the issue of all source competitive bidding, TWW noted how some of Tri-State’s past non-competitively bid resource acquisitions have led to large financial write-downs and that the Colorado PUC has had a successful recent experience with Xcel Energy’s Colorado Energy Plan, a competitive bidding plan which led to significant savings for ratepayers. Rural ratepayers in the Tri-State system should be afforded the same cost savings derived from all source competitive bidding.
All source competitive bidding for all new resources should also be a requirement for Tri-State to follow. TWW appreciates Tri-State’s comments to this proceeding from September 25, 2019, which noted that Tri-State has and will continue to conduct competitive bidding for renewable resources. TWW believes that all source competitive bidding is crucial to ensuring that rate payers are protected, and that Tri-State’s write down of $93 million for the non-competitively sourced Holcomb Expansion are avoided in the future. An all source competitive bidding process for all of Tri-State’s future resource acquisitions would ensure that Tri-State receives the most up to date market signals based on price and optimal generation resources.
See Blog Post: In Response to TWW, Tri-State Contradicts Own Testimony on ‘Cheaper Prices’ and ‘Death Spiral’. (2019). Retrieved at: http://www.thewesternway.org/tww-blog/tristateletter