Tri-State Generation and Transmission Association said Monday it has entered into a withdrawal agreement with Delta-Montrose Electric Association (DMEA), sticking to the terms of a 2019 settlement.
Westminster, Colo.-based Tri-State said DMEA will pay $88.5 million, including $26 million to purchase facilities, and forfeit another $48 million in patronage capital to leave the cooperative, effective June 30. The agreement is subject to certain conditions and approvals, including FERC’s.
DMEA is a rural electric distribution cooperative that serves about 28,000 member-owners in western Colorado. The co-op sought to sever ties with Tri-State after determining it could obtain cheaper and environmentally cleaner energy supplies from other sources.
Tri-State and DMEA last year agreed to part ways in a settlement agreement that allows for DMEA’s purchase of certain assets and facilities, the termination of certain existing contracts between the two entities, and assignment by Tri-State of its wholesale electric service contract to a third-party provider.
Tri-State and DMEA will also enter into new contracts for the continued operation of transmission and telecommunications systems.
“The withdrawal agreement aligns with our settlement,” Tri-State CEO Duane Highley said.
DMEA’s forfeiture of the current balance of its patronage capital is not included in the payment. All Tri-State members have a patronage capital account, which represents each member’s ownership in the co-op.
Tri-State, a member of SPP’s Western Interconnection Energy Imbalance Service set to go live in February, has 46 members, including DMEA.
Kit Carson Electric Cooperative left Tri-State in 2016. Two other Tri-State cooperatives, United Power and La Plata Electric Association, are seeking termination-fee information through proceedings at the Colorado Public Utilities Commission.
The Tri-State board of directors on Friday approved a formula for standardizing the fee charged to members if they break their power-supply contract and leave the organization.
