Electrical cooperative will pay about $331 million to leave
by Allen Best
Since 2016, Tri-State Generation and Transmission has been shedding members. First among its then 44 members to go was Kit Carson Electric in Taos. Then came Delta-Montrose Electric.
By 2019, other members had been eyeing the door, most significantly United Power, the Brighton-based electrical cooperative that alone was responsible for 18% of total electrical sales by Tri-State to its member cooperatives.
But what would it cost United to leave its all-requirements contract? There was never a dispute that United and other departing members needed to pay exit fees to leave remaining members “whole.” The contract had required United to get its power from Tri-State until 2050. Tri-State had significant investments in generating capacity as well as transmission.
Now, there appears to be a definitive answer. The 10th Circuit Court of Appeals in Denver. on Tuesday issued a decision that sides with the Federal Energy Regulatory Commission. FERC’s numbers favor United. As such, United must pay about $331 million (and it already has).
That’s somewhat north of the $235 million that an administrative law judge in Colorado had recommended in 2020. It is far less than the figures of $1.3 billion and more that Tri-State early in the negotiations had said would be fair.
With the final price tag still in dispute, United left Tri-State in April 2024 and has never looked back. It now has its own natural gas plant, a lot of solar plus batteries, and access to other resources, too.
Other electrical cooperatives have or will soon leave Tri-State. Granby-based Mountain Parks Electric is gone, and Durango-based La Plata Electric will be on its own as of Wednesday, April 1. It will, however, continue to buy some power from Tri-State.
Three public power districts in Nebraska in November also gave their two-year notice of plans to leave. Last week, Jemez Electric of Espanola, N.M., also announced its plans to leave within two years. In 2028, Tri-State will be down to 34 members compared to 44 a decade ago.
La Plata Electric called the decision a “meaningful milestone for cooperatives pursuing greater flexibility and local control while providing added clarity and certainty for those navigating the exit process.”
“This decision reinforces the importance of a fair and transparent exit framework,” said Chris Hansen, La Plata’s CEO. “As we approach April 1, it provides additional confidence in a process that supports reliable, affordable power and a more locally controlled energy future for our members.”
The dispute goes back to about 2019. At the time, the case was before the Colorado Public Utilities Commission. In summer of 2020, a hearing was held before a PUC administrative law judge. But Tri-State was already playing a big card. By gaining three non-utility members — a greenhouse east of Fort Lupton, a wildlife guide from Craig and one other — it qualified for review by the Federal Energy Regulatory Commission. Instead of Denver, the decision about United’s exit fee would be made in Washington D.C.
What effect has this move by Tri-State had? It prolonged the decision-making for several years. Tri-State proposed its methodology for determining what constitutes a just and reasonable just exit fee. United Power came up with its proposal. The FERC staff came up with something between the two, although somewhat more in line with what United had proposed.
This was the question before the federal court: Had FERC errored in adopting its staff recommendation?
“Tri-State thinks the methodology shifts costs to its remaining members and gives departing members a windfall,” the court summarized.
The answer of two judges was, in every instance, no. FERC had been fair. The third judge on the court went along with the majority in part but dissented in part.
Asked for comment, Tri-State communications officer Amy Robertson said the wholesale cooperative “is evaluating its legal options arising from today’s opinion and will always strive to protect our members’ interests.”
United Power had more to say. “Tri-State’s insistence that United Power pay $1.6 billion was never reasonable, and the 10th Circuit opinion affirmed that ‘record evidence supported a balance sheet approach’ adopted by FERC,” said Robin Meidhof, United’s chief legal officer.
Pursuant to FERC’s orders, she said, Tri-State has received $627.2 million from United Power, although $296.3 million of that amount was a credit for transmission service for the next 40 years.”
Meidhof also shared exasperation with Tri-State’s decision to appeal the FERC decision to the federal judiciary.
“We hope this decision brings closure for Tri-State and the guidance that all its members have bene seeking for far too many years,” she said. “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.”
The 10th Circuit judges also noted that Tri-State had high-balled the exit fees with its methodology. The FERC administration law judge had noted that if every Tri-State member terminated its Service Contract, Tri- State would receive $9.1 billion in exit payments — almost double its total liabilities and triple its debt.
As for how much United and other cooperatives and Tri-State spent in this sparing in the District of Columbia, I have no guess. Some filings in 2023 gave a glimpse, though. One consultant alone billed United $200,000.
See “Staggering sums,” March 2023 story in Big Pivots.
- Between chicken sandwiches and coffee mugs came big news - April 17, 2026
- Have the stars finally aligned for Front Range passenger rail? - April 14, 2026
- Too much Magic Marker? - April 10, 2026
Hi Allen,
In a weird way, this reminds me of the demise of Colorado-Ute. Will a large energy company pick up Tri-State for pennies on the dollar? Hum… Here is a little step back in time for your enjoyment. https://www.latimes.com/archives/la-xpm-1991-03-03-mn-302-story.html