FERC on Thursday opened a Section 206 proceeding against Tri-State Generation and Transmission Association following member utilities’ complaints that the proposed procedural requirements for leaving the cooperative’s membership continue to be unjust and unreasonable (EL21-75).

The commission gave Tri-State 30 days to show cause as to why its tariff remains just and reasonable or to explain what revisions it could make to address the identified concerns.

At issue is Tri-State’s proposed contract termination payment (CTP) methodology for calculating a member’s exit fee. FERC said several members have requested CTP calculations since November, but the cooperative has “so far refused” to provide the calculations.

Seven utility members filed a complaint over the lack of calculations in February. In a docket that is still pending before the commission, Tri-State responded by saying that utility members are entitled to a CTP calculation only upon actually leaving the cooperative (EL21-53).

FERC said Tri-State’s tariff does not provide “clear and transparent procedures” for members considering termination to obtain CTP calculations or for the cooperative to perform the calculations before the members made their decisions.

“Such a position, which would appear to be unjust and unreasonable, illustrates utility members’ inability to receive a CTP calculation pursuant to [required] ‘equitable’ termination procedures,” the commission said.

As part of a 2020 declaratory order that put Tri-State under FERC’s jurisdiction, the commission accepted bylaw changes that gave the cooperative’s board of directors authority “to prescribe equitable terms and conditions to be applied when a member withdraws from membership.” (See “Ruling Permits Tri-State to Become FERC Jurisdictional,” SPP FERC Briefs: Week of March 16, 2020.)

“However, the terms and conditions under which utility members may exit Tri-State have been a significant and contentious issue” before the association became subject to its jurisdiction, the commission said. It said the cooperative has had more than a year to file just and reasonable procedures governing the exit charges’ calculation, but it has failed to do so.

FERC also said the CTP methodology fails to provide for pre-termination calculations or any rules governing how such calculations are to be performed. It said it was concerned that a tariff rate schedule “may be impermissibly vague” because it lacks detailed procedures governing when and how a utility member may obtain a CTP methodology calculation.

“To date, the tariff has no provisions that explicitly provide for when and how pre-termination calculations should be carried out or any provisions detailing the process for requesting CTP calculations,” the commission said.

Tri-State, an SPP member based in Westminster, Colo., provides wholesale power and transmission services to 42 utility member-owners in Colorado, Nebraska, New Mexico and Wyoming.