FERC last week accepted Tri-State Generation and Transmission Association’s petition for a declaratory order that recognizes the cooperative as jurisdictional to the commission when it added its first non-utility member last year (EL20-16).

The commission agreed with Tri-State’s contention that the admission last September of Mieco, a wholesale energy services company that provides natural gas to Tri-State and other purchasers, made the cooperative a non-exempt jurisdictional public utility for purposes under the Federal Power Act (FPA).

FERC found that since Sept. 3, Mieco has “continuously been earning patronage capital through its sales of natural gas below index prices” and that Mieco and Tri-State have engaged in transactions that generated patronage capital — or the difference between a cooperative’s yearly operating income and expenses. It said Mieco has a vote in Tri-State’s operations “tailored to its status as a non-utility member,” noting that although the natural gas marketer holds voting rights different from those held by utility members, the commission has not found that the FPA “requires that owners have equal levels of control to demonstrate ownership.”

It said because no party provided evidence countering Tri-State’s claim that Mieco is not an exempt entity under the FPA, Tri-State “has demonstrated that Mieco’s rights are sufficient … to establish that Tri-State has not been wholly owned by entities exempt under [the FPA] since Sept. 3.

“Tri-State is grateful to FERC for its actions today and looks forward to working with FERC in a constructive manner for the benefit of Tri-State’s members,” Tri-State CEO Duane Highley said in a statement.

The company noted that it advances member flexibility for more self-supply and local renewable energy development. As part of Tri-State’s Responsible Energy Plan, members have additional flexibility for the self-supply of power and more local renewable energy development.

Partial requirements contracts address the concerns of some members that desire self-supply above the 5% provisions in their current contracts.

Tri-State also requested relief to terminate controversy and remove uncertainty due to pending complaints filed in November before the Colorado Public Utilities Commission by members La Plata Electric Association and United Power. The cooperative said the utilities asked the PUC to “establish an exit charge [for the Member to be relieved of its obligations under its Wholesale Service Contract and exit Tri-State] that is just, reasonable, and nondiscriminatory.”

FERC said that while it had jurisdiction over Tri-State’s exit charges, it declined to rule that the jurisdiction is exclusive, recognizing that no federal court has found the commission has exclusive jurisdiction over “rules or practices that directly affect a jurisdictional rate.

“We find that the Colorado PUC’s jurisdiction over complaints before it regarding Tri-State’s exit charges is not currently preempted,” FERC wrote. “A ruling by the Colorado PUC on those complaints would not be preempted unless and until such ruling conflicts with a commission-approved Tariff or agreement that establishes how Tri-State’s exit charges will be calculated.”

Tri-State is a generation and transmission cooperative that provides wholesale electricity to 43 member electric distribution cooperatives and public power districts in Colorado, Nebraska, New Mexico and Wyoming.

Other Tri-State Requests Accepted

The commission also issued four other orders related to Tri-State’s request for FERC jurisdiction that the cooperative said ensure “consistent wholesale rate regulation” for its member distribution utilities. Those orders:

• Granted Tri-State’s and Thermo Cogeneration Partnership’s request for market-based rate authorization. FERC denied Tri-State’s request for certain waivers and blanket authorization and granted Thermo Cogen’s request for waivers commonly granted to market-based rate sellers (ER20-681).
• Found that Tri-State and Thermo Cogen had rebutted the presumption of market power in the Western Area Power Administration’s Colorado-Missouri balancing authority area and that they met the criteria for Category 2 sellers in the Northwest, Southwest and SPP regions and Category 1 sellers in the Southeast, Northeast and Central regions.
• Denied Tri-State’s request for regulatory waivers and blanket authorizations, saying it does not typically grant waivers where the seller makes sales at cost-based rates.
• Accepted Tri-State’s stated rate Tariff and wholesale electric service contracts and instituted a Section 206 proceeding under the FPA to determine whether the cooperative’s Tariff and electric service contracts are just and reasonable. The order establishes a refund effective date, as well as hearing and settlement judge procedures (20–676).
• Found that Tri-State’s filings raised issues of material fact that could not be resolved based on the record before it, saying they would be more appropriately addressed through hearings. It accepted the cooperative’s state rate Tariff and wholesale contracts to be effective Feb. 22 and Feb. 25.
• Accepted Tri-State’s Tariff and instituted a Section 206 proceeding and hearing and settlement judge proceedings (ER20-686).

FERC’s 206 investigation will determine whether Tri-State’s proposed formula rate, base return on equity (ROE), formula rate implementation protocols, reactive supply and voltage control service rates and real power loss factor are just and reasonable.

The commission also accepted Tri-State’s proposed service agreements and a notice of cancellation for filing. It held two contested cancellation notices in abeyance. It rejected without prejudice a board policy that describes members’ option to use self-owned or -controlled distributed or renewable generation resources to serve up to 5% of that members’ requirement (ER20–689).

FERC also found the cooperative’s board policy and generation contracts are deficient without another board policy on file that comprises specific rate mechanisms, terms and conditions that significantly affect the rates utility members must pay if they produce energy in excess of the 5% allowance. It directed Tri-State to refile the rate schedules. The commission did accept the cooperative’s bylaws and other rate schedules for filing.

Commission Partially Accepts GridLiance Filing

The commission found that GridLiance High Plains’ amendments to FERC’s pro forma large generator interconnection agreement (LGIA) and pro forma large generator interconnection procedures partially comply with requirements of orders 845 and 845-A, requiring a further compliance filing within 120 days (ER19–1961).

The commissioners said GridLiance’s proposed revisions regarding the option to build transmission partially comply with the orders’ requirements because they incorporate most of their language without modification. However, FERC found that GridLiance had not justified its proposal to retain language of its pro forma LGIA that the commission removed from FERC’s pro forma LGIA in the revisions set forth in the orders.

The language at issue provides that the “interconnection customer shall so notify transmission provider within 30 calendar days” as required by orders 845 and 845-A.

FERC issued orders 845 and 845-A in 2018 and 2019, respectively, to increase the transparency and speed of generator interconnection processes. (See FERC Order Seeks to Reduce Time, Uncertainty on Interconnections and ‘Boring Good’ Rulemaking Seeks to Clean up Order 845.)

— Tom Kleckner