By Alex Benzegala
Panhandle Post
The Federal Energy Regulatory Commission (FERC or Commission) has issued a ruling in a proposed Contract Termination Payment (CTP) submitted by Tri-State Generation and Transmission, Inc. (Tri State) of which Northwest Rural Public Power District (NRPPD) has protested.
The Commission sided with NRPPD finding that the CTP proposed by Tri-State was unjust and unreasonable. NRPPD currently has an electric wholesale power supply contract with Tri-State, based out of Westminster, Colorado. NRPPD has given notice to terminate that contract effective May 1, 2024.
NRPPD is situated in the Eastern Interconnection (Nebraska) as opposed to the majority of Tri-State’s service territory in the Western Interconnection (Colorado, New Mexico and Wyoming). NRPPD protested Tri-State’s calculation of the amount due under Tri-State’s proposed CTP, more than $43M, which attempted to recover funds through a Lost Revenue Approach. NRPPD claimed no amount should be paid to Tri-State to cover stranded assets as Tri-State has no generating assets in the Eastern Interconnection serving NRPPD.
The Commission upheld NRPPD’s protest and determined, “Under the Adopted Balance Sheet Approach, withdrawing members must pay their pro rata share of generation-related assets, debt and other obligations.” The Commission further concluded, “Based on cost causation principles, this pro rata share will be among Tri-State members in the Western Interconnection.” And that, “…Northwest Rural, as an Eastern Interconnection member, would pay its proportion of Purchase Power Agreements that are used to serve its load…”
Tri-State currently serves NRPPD through Purchase Power Agreements between Tri-State and Basin Electric Power Cooperative, based in Bismarck, ND and from federal hydro-power contracts with the Western Area Power Administration, based in Lakewood, CO.
General Manager of NRPPD, Chance Briscoe, says, “We appreciate the Commission’s clear recognition that NRPPD and other Eastern Interconnection members receive no benefit from assets owned by Trii State serving those members in the Western Interconnection and that NRPPD is not responsible to cover the stranded cost of those assets.” Briscoe continued, “While this isn’t the final step in securing NRPPD’s alternate future power supplier and left a few questions to be answered, the Commission provided a stark rebuke of Tri-State’s position that NRPPD owed Tri-State in excess of $43M to exit and helped to clear the way for our transition.”
Additionally, the Commission determined, “We uphold the Modified Balance Sheet Approach’s treatment of patronage capital…” This treatment will allow NRPPD to choose between the normal retirement schedule of patronage capital or a lump sum withdrawal upon exit at net present value. Briscoe says, “NRPPD currently has over $6M of patronage capital in Tri-State and this order will provide the option to receive approximately $4M immediately, rather than waiting 50 or 60 years to receive those funds for the benefit of our customers in the rural Panhandle of Nebraska.”
The Federal Energy Regulatory Commission (FERC or Commission) has issued a ruling in a proposed Contract Termination Payment (CTP) submitted by Tri-State Generation and Transmission, Inc. (Tristate) of which Northwest Rural Public Power District (NRPPD) has protested. The Commission sided with NRPPD finding that the CTP proposed by Tri-State was unjust and unreasonable. NRPPD currently has an electric wholesale power supply contract with Tri-State, based out of Westminster, Colorado.