La Plata Co-op Leads the Way Out

Electricity Cooperatives Energy

             New Orleans       Southern Colorado is a beautiful part of the West.  Durango and Pagosa Springs have grown over the years, but have added public amenities while doing so, while also serving as gateways to Mesa Verde National Park, the Sangre de Cristo Mountains, camping, hiking, and fishing.  Soon this area is also going to be known for the amazing breakthrough in the fight for a climate future because of the actions taken by the members and leaders of the La Plata Electric Association, the rural electric cooperative in the area.

After years of struggle on March 25th, LPEA voted to leave the Tri-State, the giant generating and transmission coop, serving many cooperatives in the intermountain west.  The issues had been boiling for years, especially after LPEA members voted in a reform-minded directors slate that advocated strenuously for Tri-State to increase its portfolio of alternative fuel sources.  LPEA was required by contract to get 95% of its power from Tri-State and only 5% from other sources.  For its part, Tri-State was not only using coal on long-term contracts to generate the power it was distributing, but seemed to be doubling down on coal, even as others were getting the message on solar and wind.

There are many cooperatives served by Tri-State.  In building and managing facilities, Tri-State financed these operations with contracts from the member cooperatives guaranteeing that they would buy power from the G&T.  When LPEA began demanding change, Tri-State resisted by proposing a bloated exit fee of almost half-a-billion-dollars.  Meeting LPEA’s challenge, the Federal Energy Regulation Commission (FERC) ruled that Tri-State had to more appropriately calculate the fee.  LPEA estimates on the FERC formula it will cost them roughly $210 million along with over a $47 million capital credit, half the Tri-State number.

It’s a steep price, but the members felt it was worth it to abandon a sinking ship.  Tri-State forced LPEA to pass on a 6% rate increase this year to its members because of their problems with sunken assets, dwindling customers, and a negative credit rating.  The Tri-State updated Energy Resource Plan in 2024 was a bit more responsive, but roiled the waters even more by basing any progress on federal funds it has not received, and to add insult to injury, did not include LPEA or any member co-ops as part of the plan solutions.  In order to move forward, LPEA has sued Tri-State for refusing to provide fair terms to exit their contract and proceed with a partial buy-out.

None of this will be easy. Increasing emphasis on solar will also require more work – and expense – on the grid to be able to sort excess energy.  This fight is not over, even though La Plata is winning battle after battle.  Nonetheless, they are pointing the way for RECs across the country to be pathbreakers, not obstacles to change.  Co-ops provide 15% of the energy in the United States, so change from the grassroots, especially in exiting coal, could make huge differences in dealing with America’s role in global warming.