Hay Springs-based Northwest Rural Public Power District has cleared another hurdle to its plan to end its membership in Tri-State Generation and Transmission in May and contract with Nebraska Public Power District for wholesale electricity.
FERC – the Federal Energy Regulatory Commission – has agreed that Denver-based Tri-State’s demand for a $43-million dollar exit fee is “unjust and unreasonable.”
Northwest Rural General Manager Chance Briscoe says the ruling is a critical part of the plan because it makes leaving Tri-State possible and financially viable.
Briscoe says the core of the dispute is geography. Northwest Rural is a different region of the nation’s electrical grid than the rest of Tri-State, and FERC agrees it should not be forced to pay for Tri-State’s power plants in the other region.
FERC’s ruling says Northwest’s exit fee should reflect only its share of Tri-State’s contract for wholesale electricity generated by Basin Electric’s power plants and from federal hydro-power contracts with the Western Area Power Administration.
Northwest Rural wants to continue receiving electricity from WAPA, but Briscoe says the FERC order isn’t clear on that issue.
Briscoe says if Northwest wins, its customers will see an even greater eventual reduction in rates than already expected under the NPPD contract.
Briscoe says also still to be determined is how Northwest Rural will get its share of Tri-State’s patronage capital. He compares it to a lottery winner choosing between a multi-decade annuity and a lump-sum payment.
Briscoe says the lump-sum payment would be about 2/3rds of Northwest Rural’s $6-million dollar share or roughly $4-million dollars. Northwest Rural serves 3,300 accounts with over 1,900 miles of line in rural Dawes, Sheridan, and Cherry Counties