FERC last week rejected Tri-State Generation and Transmission Association’s proposed procedural requirements for members seeking to withdraw from the cooperative and cancel their wholesale electric service contracts (ER21-1449).

The commission found that Tri-State’s proposal imposes “excessive and unjustified barriers” to members seeking information on whether to terminate their wholesale contracts with Tri-State. It said the cooperative did not justify a requirement allowing it to unilaterally prevent a membership termination after the member committed to make a contract termination payment (CTP), which Tri-State said would leave the remaining members “financially unaffected.”

The May 14 order was issued without prejudice, giving the cooperative an opportunity to refile.

Tri-State filed its proposal in March, laying out requirements for the CTP’s calculation fee, the withdrawal notice period and the Board of Directors’ approval criteria for a member’s withdrawal request. Members seeking a CTP calculation would have to make an initial $75,000 deposit, with any refunds of that balance and subsequent deposits made following deductions for costs and labor. Tri-State estimated that fee could yield a minimum cost of $79,000, depending on the calculation’s complexity, and would be capped at $200,000.

FERC said Tri-State’s proposed limit of three CTP calculations per year effectively prevents its members from obtaining the necessary information to assess their potential membership departure, saying the CTP requests represent “an unjustified limitation.”

While four Tri-State members supported the filing, eight others filed protests. The commission said it shared protestors’ concerns that the proposed CTP procedures “provide Tri-State with unfettered discretion on how long it will take to calculate the CTP.”

FERC last year accepted Tri-State’s CTP methodology for filing, but established hearing and settlement judge procedures that are still ongoing (ER20-1559). (See FERC Sets Tri-State’s Exit-fee Rules for Hearing.)