Wyoming rural cooperatives to get more green energy…

The parent group of several rural Wyoming power cooperatives has reached a major milestone in a complex energy transition plan that it hopes will help keep wholesale electricity rates in check with the help of a growing supply of green energy.

Colorado-based Tri-State Generation and Transmission Association, a provider of electricity to cooperatives in the western United States that was founded more than 75 years ago, has launched a new power-purchase program to help keep rates low, after its largest member in Colorado paid $627 million to leave Tri-State in hopes of finding cheaper power deals elsewhere.

In connection with the decision, a major rating agency on July 31 raised the association’s billion-dollar debt rating, which will help improve future borrowing costs needed to implement its green energy spending plan.

Tri-State focuses on purchasing electricity wholesale from suppliers for its own use or to supply retail and industrial customers.

Tri-State is optimistic that its new power-purchase program, which relies on green energy delivered over hundreds of miles of high-voltage transmission lines in Wyoming and surrounding states, will help keep wholesale rates under control.

A new electricity purchasing opportunity for rural electric cooperatives in Wyoming follows a decision by a federal regulatory agency earlier this month.

An agency called the Federal Regulatory Energy Commission (FERC) regulates the operation of high-voltage power lines in the United States, including the speed of power transmission.

This month, FERC approved a plan filed by Tri-State, the parent company of Wyoming’s electric cooperatives, that effectively gives them the flexibility to source up to 40% of their electricity through a new program aimed at transmitting green energy 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 energy

The BYOR program follows significant guidance and feedback from Tri-State member electric cooperatives and power districts, which now have greater flexibility to own or contract for their own energy projects.

Electricity is expected to come mainly from renewable energy sources such as wind turbines and solar panels.

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

In Wyoming, Tri-State 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 CEOs of seven Wyoming cooperatives were not initially available to comment on the benefits of the new green energy purchasing option.

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

Improved credit

The introduction of BYOB comes on the heels of a significant credit rating upgrade by S&P Global Ratings, a New York-based ratings agency that influences the interest rates companies like Tri-State pay to borrow money.

S&P lowered the outlook from negative to stable on Tri-State’s multi-billion-dollar debt.

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

Leaving the EU was seen as removing an obstacle to implementing the Tri-State energy transformation plan.

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

“We believe the termination payments set by the Federal Energy Regulatory Commission have the potential to discourage additional distribution cooperatives from severing their ties with Tri-State,” S&P credit analyst David Bodek said in a July 31 statement.

According to Bodek, Tri-State’s board said it will use the proceeds from the exit fee to pay part of a five-year $2.6 billion capital improvement plan and to reduce its existing $3.4 billion in debt by about 13%.

A Tri-State spokesman was not initially available for comment.

“Our resource plans remain on track to have 50 percent of our members’ energy come from renewable sources by the end of next year, rising to 70 percent by 2030, which will translate into significant greenhouse gas reductions,” Tri-State CEO Duane Highley said in a statement in May after United left his association.

“Our resource planning sets high standards for reliability, even in the event of 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 every success in their journey to independence,” he said.

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

United Power, currently the third-largest utility in Colorado, notified Tri-State in 2022 that it was leaving the cooperative because Tri-State had failed to control energy costs and invest in more “local energy sources.”

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

Looking to the future, Tri-State is quickly moving toward relying more on alternative sources of energy production.

The company plans to install 595 megawatts of new solar in 2024 and 2025, according to a statement from Tri-State.

This additional generation will help meet Tri-State’s Electric Resource Plan filed with regulators, which calls for Tri-State to meet Colorado’s greenhouse gas emissions reduction goal of 89% by 2030, retire four coal-fired generating units between 2025 and 2031, and add 1,250 megawatts of additional renewable energy and storage resources between 2026 and 2031.

Tri-State managed to keep rates stable for seven years through 2023 before raising them by about 6.3% in 2024 to $77.91 per megawatt-hour of electricity delivered.

United’s Gabriel has previously said he could buy energy on the open market at $60 to $65.

The co-ops’ main complaints about Tri-State are the association’s high rates, excessively long 50-year contracts and the need

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

Pat Maio you can contact us at [email protected].