La Plata Electric Association Inc.’s (LPEA) wholesale electricity provider, Tri-State Generation & Transmission Association Inc., announced on June 16, 2023, that it had submitted a new formula rate filing to the Federal Energy Regulatory Commission (FERC).
The new rate, if approved by FERC, would increase the rates for LPEA by 6.2%.
Tri-State must obtain rate approvals from FERC rather than through its local Board of Directors. If approved by FERC, the new rates will take effect on January 1, 2024.
Following a seven-year period with stable and then lower wholesale rates for its members, the board of directors of Tri-State Generation and Transmission Association has approved the power supply cooperative’s 2024 operating budget with a 6.36% increase in the average Class A wholesale rate intended to go into effect January 1, 2024.
Tri-State has not increased its wholesale rate for its members in seven years, with the wholesale rate flat from 2017 into 2021, and then reduced a total of 4% in March of 2021 and 2022, remaining lower in 2023.
The new rate reflects a net increase of 1.4% from the actual average Class A wholesale rate paid by members in 2017 to the 2024 budgeted average Class A wholesale rate, which is approximately 0.2% annualized. The wholesale rate increase is significantly below the rate of inflation over the seven-year period.
“Tri-State has bucked electric utility industry trends for large rate increases for seven years, while actually lowering our members’ wholesale rates,” said Duane Highley, Tri-State CEO. “Through record inflation, higher fuel and energy prices, and supply chain pressures, we’ve maintained increasingly competitive wholesale rates and kept our first rate increase since 2017 well below the rate of inflation.”
Tri-State’s board also approved a new wholesale rate design for filing with the Federal Energy Regulatory Commission. As a cooperative, Tri-State’s members design their own wholesale rates, which are approved by the board of directors, including a representative from each utility member. Wholesale rates are set as low as is possible, with excess revenues allocated and eventually returned to members.
Tri-State is expecting to receive a response from FERC within 60 days on whether the proposed rate increase is accepted. Once FERC accepts the rate, Tri-State will raise its rates to its members.
“LPEA will continue to closely monitor the decision from FERC and the impact this rate increase from Tri-State will have on our members,” said Jessica Matlock, LPEA CEO.