New twist to Tri-State/United tango

Colorado’s second largest electrical cooperative hires WAPA chief executive

by Allen Best

Well, this adds a new and perplexing dimension to the dispute between United Power, Colorado’s second largest electrical cooperative, and its wholesale power supplier, Tri-State Generation and Transmission.

United Power has hired Mark Gabriel as its chief executive. Gabriel has spent the past eight years as chief executive of the Western Area Power Administration. WAPA delivers electricity generated at the federal dams in Colorado and beyond to municipal utilities and cooperatives and the G&Ts that supply many of the cooperatives.

Mark Gabriel

Just two weeks ago, Gabriel was on a press conference with Duane Highley, chief executive of Tri-State, to announce the launch of an energy imbalance market. Tri-State and WAPA, both based in metropolitan Denver, have a close relationship.

United Power, meanwhile, has been trying to get out of its contract with Tri-State. The contract expires in 2050. United Power had sought to follow in the steps of Taos, N.M.-based Kit Carson Electrical Cooperative , which left Tri-State in 2016, and Montrose, Colo.,-based Delta-Montrose Electric, which left in2 020. Both paid exit fees, in the case of Delta-Montrose after a protracted dispute about what constituted a fair and reasonable fee for breaking the contract.

Based in Brighton, on Denver’s northern side, United Power is the largest of Tri-State’s 42 remaining electrical cooperative members, with roughly 97,000 meters. It has service territory from exurban homes in the foothills around Rollinsville sweeping eastward onto the Great Plains, including a substantial portion of the Wattenberg oil-producing field.

United believes it can get better deals for its wholesale power independent of Tri-State. It has rejected Tri-State’s exit fee, which has not been disclosed publicly but which has been said to be in excess of $1 billion. United and Durango-based La Plata Electric Association appealed to the Colorado Public Utilities Commission to adjudicate, and a week of hearings were held last summer before an administrative law judge. The judge recommended exist fees in line with what the cooperatives had been thinking. However, the PUC commissioners later said they could not accept the case—at least not now, pending resolution of whether they have jurisdiction.

This is where it gets really interesting. Under Highley, who arrived as chief executive in April 2019, Tri-State has sought to get review by the Federal Energy Regulatory Commission, bypassing the PUC on the matter of rates—and hence also the matter of exit fees. FERC has partly accepted Tri-State’s filing, but the devilishly details are yet to come.

United Power, in the meantime, last year filed a lawsuit in Adams County District Court, the jurisdiction in which the headquarters of both Tri-State and United are located. The lawsuit alleges that Tri-State violated state law in the mechanism it used to get FERC jurisdiction. It added several non-utility members, including a greenhouse in Fort Lupton and a ranch near Craig, to qualify.

Durango-based La Plata Electric, which also has an interest in exploring its options, recently joined the lawsuit, but under the terms that it is not responsible for legal costs.

Highley is not shy about public appearances. “Watch our feet,” he told the Colorado PUC shortly after he arrived as CEO, promising the utility would decarbonize. If details remain to be worked out, he has launched Tri-State on a big pivot. Speaking recently by video-conference with about 160 Sierra Club members and others, he sketched a powerful case for seeing Tri-State as a utility on the move. He also took on many hard questions, including one about the route to Washington D.C. offices through the greenhouse in Fort Lupton.

Now, Highley will be seeing his former partner in creating the imbalance market in the courtroom. Or perhaps Gabriel will help Highley figure out a way for Tri-State to remain relevant in the fast-shifting energy world of the 21st century.

In 2008, Gabriel completed a book, “Visions for a Sustainable Energy Future,” which won the Indie Award for Environmental Writing.

That was before the disruptions in the old business models were only being talked about. Now, they’re occurring. Far beyond Colorado and the Rocky Mountains, electrical co-operatives are trying to break free from their wholesale suppliers to find better deals for electricity.

Some see the G&TS and other more traditional utilities to the Baby Bell monopolies of the 20th century. Time will, as they say, say.

Gabriel brings 25 years of industry experience, including more than eight years as a management consultant and acting president at the Electric Power Research Institute where he led the nationwide effort known as the Electricity Sector Framework for the Future.

When he was much younger, though, Gabriel was a ski writer, covering the racing circuit.

You can see more about his views on this video from October 2020 sponsored by the Smart Electric Power Alliance.

For more on Tri-State and its disputes with members, see:

Two small victories for Tri-State from Dec. 18, 2020

Tri-State’s big win at PUC from Oct. 24, 2020

The cost of leaving Tri-State G&T from July 11, 2020

United Power alleges Tri-State crossed legal line from May 5, 2020

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