Tri-State Generation and Transmission has filed a legal action that would restrict DMEA's ability to buy affordable electricity purchased from local renewable energy sources, according to an advisory from DMEA.
Virginia Harmon, manager of member relations and human relations for DMEA, reports that Tri-State is asking the Federal Energy Regulatory Commission (FERC) "to approve a rate penalty on utilities like DMEA when they purchase electricity from local renewable generation projects."
Tri-State's move "threatens DMEA's efforts to bring renewable generation -- and the possibility of tremendous economic development -- to DMEA's service territory," Harmon noted in an information advisory.
"If successful," Harmon added, "Tri-State's proposal would let it impose a 'lost revenue recovery fee' when DMEA makes... renewable energy purchases."
Last year, DMEA won a ruling from FERC that allows the local co-op to purchase more power generated by local renewable projects and less power from Tri-State Generation and Transmission. This year, Tri-State is pushing back against that ruling with a FERC counter filing of its own.
Prior to last year's FERC ruling, DMEA had been bound by contract with Tri-State limiting the amount of local power DMEA could buy from other sources. Tri-State is now trying to pull the plug on last year's FERC ruling. Last week, the Westminster-based electric utility filed an action asking FERC to apply the additional "rate penalty" to local renewable power used by DMEA and by other local electric co-ops that buy most of their power from Tri-State.
DMEA sought the ruling from FERC last year because the local co-op was up against a limit on local power purchases imposed by its contract with Tri-State. The contract required DMEA to buy 95 percent of its energy supplies from Tri-State, thus limiting to 5 percent the amount of energy DMEA could buy from local renewable projects.
DMEA's successful completion of the South Canal hydro project whetted its appetite for more local renewable power sources, but the South Canal project also put DMEA up against the 5 percent contract limit.
With a second hydro project being proposed on the South Canal, DMEA sought and won the FERC reprieve from the Tri-State's limit on local power purchases. Last year's FERC ruling in favor of DMEA is seen by the local utility and others as a benefit to the area's long-term economic development prospects.
Harmon quoted DMEA board president Bill Patterson saying, "This 'lost revenue recovery fee' jeopardizes the viability of ... local renewable generation projects that DMEA members have requested for years... DMEA will oppose the fee because we believe it violates federal law and is an attempt to make a one-sided change the DMEA/Tri-State contract."
Patterson was also quoted as saying, "Developing local renewable generation is a great opportunity for our communities to thrive as we move into the future. While we continue to work toward embracing the changes in our industry and toward improving our local economy, Tri-State's proposed fee will penalize us for our efforts."
Harmon reports that "DMEA will soon be asking its members and supporters in the broader community to submit letters to FERC opposing Tri-State's proposed 'lost revenue recovery fee.' The cooperative expects to have more information regarding FERC deadlines and letter submission procedures in the next week."