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LPEA part of formal complaint to the Public Utilities Commission

By Indiana Reed
Special to The SUN

La Plata Electric Association (LPEA) Monday, as part of a coalition of fellow electric cooperatives and certain large industrial customers, has filed a formal complaint with the Colorado Public Utilities Commission (PUC) challenging Tri-State Generation and Transmission Association’s (Tri-State) new rate design as unreasonable, preferential and discriminatory.

“We believe that Tri-State’s new rate design creates an unfair economic burden on many of our member-customers including energy-conscious residents and businesses that have participated in our Time-of-Use program, as well as our high-load factor industrial customers,” said Greg Munro, LPEA CEO. “The new rate design assesses charges based exclusively on calculated average demands rather than taking into account peak demands.”

According to LPEA, the previous rate managed electricity load by encouraging use in off-peak periods, which helped even out energy demand and ostensibly helped Tri-State control generation and lessen the need for construction of additional generation and transmission facilities. LPEA opposes altering this program that was and is so beneficial to Tri-State and all of its member systems.

The formal complaint to the PUC comes after approximately a year and a half of discussion during Tri-State’s creation of its new rate structure, which went into effect Jan. 1, 2013. LPEA has continued its efforts without satisfaction through meetings, letters, phone calls and resolutions. Filing with the PUC is a last resort for LPEA to help protect its members by asking the PUC to establish a cost allocation and rate structure that does not discriminate against member-customers, while allowing Tri-State to meet its current revenue requirements.

“We remain supportive members of Tri-State, but we’re concerned because the new rate structure significantly increases costs for our high-load industrial customers by an estimated 15-20 percent in 2013 alone,” said Munro.  “Additionally, our Time-of-Use customers, who have worked diligently to be energy conscious, are experiencing a 30-percent increase because of the new rate structure. This has left most Time-of-Use customers with no incentive to manage their energy usage.”

LPEA and fellow cooperatives in the complaint, White River Electric Association (Meeker, Colo.) and Empire Electric Association (Cortez, Colo.), are among the 44 rural electric cooperatives in Colorado, New Mexico, Nebraska and Wyoming that under an all-requirements contract  receive nearly all their wholesale power from Tri-State. The purchased power from Tri-State is more than 70 percent of LPEA’s total cost to service its members’ electric energy needs.

“We understand that Tri-State’s costs for doing business will necessarily increase. Everything is going up, therefore rates will also reasonably increase,” said Munro. “But this new rate design is not the best way to recoup costs and treat everyone fairly. It could be as simple as going back to the former rate structure and incorporating a reasonable rate increase. We hope this will be resolved so that our member-customers are not unduly harmed.”

This story was posted on March 7, 2013.