This blog series covers the monthly La Plata Electric Association (LPEA)* Board of Directors meetings. We’re tracking the board for transparency and accountability, as well as to stay current on their renewable energy initiatives. Find past and future spotlights here.
Tri-State is facing an existential crisis.
Their reliance on coal has led to large debt, depreciating assets, and a slew of co-ops threatening to find more affordable power elsewhere.
In the past few weeks, the unrest bubbled over. No less than four rural electric cooperatives are pushing back and seeking alternative paths forward for sourcing their power.
- Tri-State’s largest member, United Power, sent out a letter to the other 42 member co-ops voicing “grave concerns” about Tri-State’s high prices and lack of renewable energy. United is in real danger of losing its big industrial customers to other suppliers, mainly Xcel who offers 28% lower rates. To solve this, the letter suggests amending Tri-State’s bylaws to allow for partial requirements contracts.
- To top it all off, Delta Montrose Electric Association (DMEA) is actively seeking to exit their contract with Tri-State. After years of negotiations, Tri-State is still setting a “discriminatory and unfair” exit fee, said CEO Jason Bronec. Fed up, DMEA filed a formal complaint and asked the Colorado Public Utilities Commission (PUC) to step in. The PUC ruled that Tri-State has 20 days to satisfy or answer the complaint, and a tentative hearing process has been proposed.
In short, it’s looking bleak for Tri-State.
Backed into a corner, Tri-State is making the rounds in Colorado, visiting electric co-ops in an attempt soothe the growing discontent. They visited LPEA’s recent board meeting to quell growing concerns about Tri-State’s mounting debts and unwise investments.
Unfortunately, the meeting did anything but that.
Tri-State’s debt totals over $3.3 billion dollars and it’s projected to just keep growing. Right now, Tri-State is making interest-only payments on the majority of the long-term notes instead of actually paying the debt down. They have balloon payments of more than a billion dollars due in the next fifteen years.
They don’t anticipate having enough money to pay it all off.
The only way Tri-State will be able to pay the debts off without raising rates is if member co-ops extend their contracts past 2050. Given the turbulence in the co-op world right now, more than 30 years before contracts get extended, that hardly seems like a reliable scenario.
If co-ops don’t extend their contracts, rates will have to go up. If rates continue to rise, Tri-State may continue to lose more customers, perpetuating their fiscal problems.
And that’s not even the end of Tri-State’s financial woes.
An Increasingly Uncertain Future
Tri-State’s most important coal-fired plant, the Craig power plant, is on the brink of financial ruin. Tri-State is the primary owner of the plant, but two of the other owners, Xcel and Platte River Authority, have vowed to be 100% carbon free in the next few decades.
The only way Xcel and Platte River Authority will be able to reach those goals is by selling their coal assets and abandoning the Craig power plant, leaving it in Tri-State’s hands.
Another owner, Pacificorp, recently released a report finding the Craig plant uneconomical- it costs more to operate than it would to invest in renewables. Pacificorp hasn’t announced any official decisions about the Craig plant, but the implications are clear: Pacificorp is moving towards selling their shares and retiring the plant.
This means Tri-State could soon be left as the sole owner of an old, failing coal-fired power plant. They will either have to shut down one of their biggest assets or take on the additional costs of running the plant by themselves.
Either way, Tri-State is barreling towards extensive costs and intensifying financial risks. Which means as member-owners, so are we.
The Craig generating station.
Tri-State is at a turning point.
They can keep their dirty and expensive power, lose customers, and ultimately spiral into bankruptcy.
Or, they can shutter their coal plants, invest heavily in renewables and the future energy economy, allow for local development, and keep supplying power to rural co-ops.
Remember, the future of LPEA is still entwined with Tri-State, so what happens to them affects us. The electric grid is evolving rapidly and we must remain vigilant to make sure LPEA doesn’t get left behind. As a member-owner of LPEA, the future of our co-op rests in your hands! It is imperative that your voices are heard!
Call your directors and show up to LPEA meetings if you can. Voice your opinions, ask questions, and say thank you for all the progress that’s been made so far. We still have a long way to go, but if we all work together we can ensure a brighter energy future for Southwest Colorado.
Next LPEA Meeting:
Wednesday, January 16th at 9am at the LPEA Headquarters. Public comment is at 9am.
Next Power Supply Committee Meetings:
Thursday January 3rd, 9am-12pm, LPEA Headquarters.
Thursday, January 17th, 1-4pm, LPEA Headquarters.
Call or email your LPEA Board Directors.
(Hover over your neighborhood for contact information!)