The parent group of several rural electricity cooperatives operating in Wyoming has reached a major milestone in a complex energy transition plan that it hopes will hold the line on wholesale power rates with a boost coming from a growing supply of green power.

Colorado-based Tri-State Generation and Transmission Association, a supplier of electricity to cooperatives across the Western United States that was founded more than 75 years ago, has launched a new power buying program to help keep the lid on rates. That’s after its largest member in Colorado paid $627 million to leave Tri-State with the hope of finding cheaper power supply deals elsewhere.

Following the move, a major credit rating agency upgraded the association’s billions of dollars in debt July 31, a move that will improve the organization’s future borrowing costs needed to implement a future green power spending plan.

Tri-State is focused on buying electricity wholesale from suppliers for either their own use, or because they are a supplier to retail or industrial consumers.

Tri-State is optimistic that its new power buying program that relies on green power delivered over hundreds of miles of high-voltage transmission lines in Wyoming and other adjoining states will keep wholesale rates in check.

The new power buying opportunity for rural Wyoming electricity cooperatives is the result of a federal regulatory agency decision made earlier this month.

The agency, called the Federal Regulatory Energy Commission (FERC) regulates high-voltage power lines in the United States, including transmission delivery rates.

This month, FERC approved a plan submitted by Tri-State, the parent of Wyoming’s electric cooperatives, that effectively gives them the flexibility to draw up to 40% of their power needs through a new program designed to move green power over the high-voltage grid, called Bring Your Own Resource (BYOR).

There are eight rural electric cooperatives in Wyoming that are members of Tri-State.

More Renewable Power

The BYOR program is the result of significant guidance and input from Tri-State’s member electric cooperatives and public power districts, which now have increased flexibility to own or contract for their own energy projects.

The electricity is expected to come largely from renewable energy projects, like wind turbines or solar panels.

Tri-State is a nonprofit cooperative with 44 members, including 41 electric distribution cooperatives and public power districts in four states that provide electricity to more than 1 million consumers across nearly 200,000 square miles in Colorado, Nebraska, New Mexico and Wyoming.

In Wyoming, Tri-State’s distribution cooperatives include Big Horn Rural Electric Co. in Basin; Carbon Power & Light Inc. in Saratoga; Garland Light & Power Co. in Powell; High Plains Power Inc. in Riverton; High West Energy Inc. in Pine Bluffs; Niobrara Electric Association Inc. in Lusk; Wheatland Rural Electric Association in Wheatland; and Wyrulec Co. in Torrington.

The general managers of seven of the cooperatives in Wyoming were not immediately available to comment on the benefits of the new green-energy buying opportunity.

Jeff Umphlett, the general manager of Big Horn Rural Electric, declined to comment on the BYOB program until “issues are settled.”

Improved Credit

The BYOB comes on the heels of a major credit rating upgrade by S&P Global Ratings, a New York City-based credit rating agency that has influence over the interest rates companies like Tri-State pay to borrow money.

S&P revised its outlook to stable from negative on a few billions of dollars in debt held by Tri-State.

The outlook revision reflects the withdrawal of United Power Inc., Tri-State’s largest member, from the association on May 1.

The exit was seen as removing an impediment to Tri-State’s energy transition plan.

According to S&P, Tri-State received a $627 million contract termination payment from Brighton, Colorado-based United Power, that was used to pay down debt.

“We view the contract termination payments established by the Federal Energy Regulatory Commission as a potential disincentive for additional member distribution cooperatives to sever their ties with Tri-State,” said S&P credit analyst David Bodek in a July 31 statement.

Tri-State management has stated that it will apply the proceeds of the exit fee to offset portions of its $2.6 billion, five-year capital improvement plan and to reduce its $3.4 billion in existing debt by about 13%, according to Bodek.

Tri-State spokesman Lee Boughey said that the Bring Your Own Resource plan gives member cooperatives in its network the leeway to draw power resources from local power plants.

The member organizations had been restricted to 5% supplies locally, but now can bring in up to 40%, Boughey said.

“It doesn’t necessarily have to be all green power, but they can self supply their own power.”

Tri-State is clearly taking steps to exit coal-fired power plants over the next few years.

The 1,427-megawatt Craig Station in northwestern Colorado should be fully retired by the beginning of 2028, Boughey said.

Tri-State owns Craig’s Unit 3, and operates Units 1 and 2 with other utility interests involved. The latter two units will be retired in 2025 and 2028, respectively.

Other Tri-State-owned coal-fired plants have been retired in recent years, including the 100-megawatt Nucla Station in 2019 and Escalante Station in northern New Mexico the following year. It plans to close

Tri-State said that there are no plans to retire the 1,710-megawatt coal-fired Laramie River Station in Wheatland, Wyoming, but will close Arizona’s Springerville Station 458-MW Unit 3 in 2031.

The Springerville power plant is a 1,765-megawatt, four-unit generating facility in eastern Arizona near the New Mexico border.

“Our resource plans remain on track and by the end of next year, 50% of the energy our members use will come from clean energy, rising to 70% in 2030, with significant greenhouse gas reductions,” said Tri-State CEO Duane Highley, in a statement in May after United exited from his association.

“Our resource planning establishes a high standard for reliability, even in extreme weather events, and our wholesale rates will remain competitive for our members,” Highley said.

Good Luck

“We wish United Power and its consumer-members well as they go off on their own,” he said.

United Power President and CEO Mark Gabriel was not immediately available for comment.

United Power, which is now Colorado’s third largest utility, served notice to Tri-State in 2022 that it was leaving the cooperative because of Tri-State’s failure to control power costs and invest in more “local generation.”

Tri-State’s 5,800-mile transmission network relies on more than 30 power generation resources and in 2031, members will share more than 50 resources, including more than 2,200-megawatts of wind and solar resources.

Looking ahead, Tri-State is rapidly looking to rely more on alternative sources of power production.

In 2024 and 2025, Tri-State will add 595 megawatts of new solar, according to a Tri-State statement.

This additional power generation will help with iTri-State’s electric resource plan filed with regulators. That plan calls for Tri-State to meet an 89% greenhouse gas emissions reduction goal in Colorado in 2030, the retirement of four coal-fired generation units between 2025 and 2031, and the addition of 1,250-megawatts of additional renewable energy resources and energy storage between 2026 and 2031.

Tri-State managed to hold its rates stable for seven years through 2023 before increasing them about 6.3% for 2024 to $77.91 a delivered megawatt-hour of electricity.

United’s Gabriel has previously stated that he could buy power on the open market at a $60 to $65 price.

The main complaints that co-ops have voiced about Tri-State are that the association’s rates are high, its 50-year contracts are too long and require the

cooperatives to buy 95% of their electricity from the association, thwarting efforts to develop local projects.

Pat Maio can be reached at pat@cowboystatedaily.com.