Happy New Year all! Since our last update in November 2022, there have been some developments in LPEA’s bid to secure more flexibility in our future power supply.
As a reminder, in April of last year, LPEA and our power provider Tri-State (together with two other electric cooperatives) filed a settlement with the Federal Energy Regulatory Commission (FERC), which would allow LPEA to secure 50% of our power from Tri-State and 50% from other sources. This agreement represents an innovative solution to an outdated power-supply model. But one entity did not agree, so FERC considered it a “contested settlement.” Since we filed the settlement, we have been awaiting FERC’s response and expecting approval.
But in late December of 2022, FERC leadership changed. When this happened, they declined to rule and sent the case back to the Administrative Law Judge (ALJ) to conduct further hearings. While we are disappointed with the further delay, we acknowledge that this is a fairly common practice when FERC reviews contested settlement agreements. You can read our joint op-ed piece with Tri-State after this decision was announced here.
That said, this development is not slowing our forward momentum. All three prongs of LPEA’s Power Supply Strategy as initiated in 2019 are still in play. Here are the latest updates on each of these options:
OPTION: A partial exit from Tri-State
This is the option reflected in the settlement statement outlined above. Given FERC’s recent decision to send the settlement back to the ALJ, the timeline for a ruling for the current settlement decision will likely extend to early 2024. LPEA, Tri-State, and other co-ops recently filed a joint request for the rehearing of this settlement.
OPTION: Amendments to our current contract to allow more flexibility to better meet the needs of our membership.
The return of the settlement to the ALJ provides LPEA and Tri-State (and other interested members) a new opportunity to refine our settlement into a version that is not contested, which could potentially fast-track the process. We are currently working on this opportunity, which if done right, could help meet LPEA’s and other Tri-State members’ future power supply objectives while continuing to deliver reliable and affordable energy.
OPTION: A full exit from Tri-State
LPEA continues to monitor and evaluate the option of a full exit from Tri-State. A ruling from FERC is expected on this issue this summer, but it could still be challenged in the courts, causing additional delays. We plan to evaluate the feasibility of this option once FERC rules and the process is complete.