On October 4, 2019, FERC rejected without prejudice a stated rate tariff and Open Access Transmission Tariff (“OATT”), among other filings, by Tri-State Generation and Transmission Association, Inc. (“Tri-State”) and its subsidiary Thermal Cogen Partnership, L.P. (“Thermal Cogen”). Tri-State, an electric cooperative previously exempt from FERC’s jurisdiction, submitted the filings in an attempt to submit to FERC regulation after Tri-State admitted Mieco, Inc., a jurisdictional public utility, to its Board of Directors. FERC concluded that Tri-State’s stated rate tariff and OATT filings were patently deficient because they failed to provide the supporting data required for FERC to assess whether the proposed rates were just and reasonable, and for potentially interested parties to determine how the rates might affect them.

Tri-State is generation and transmission cooperative that provides wholesale electricity to 43-member electric distribution cooperatives and public power districts in Colorado, Nebraska, New Mexico, and Wyoming. In its tariff filing, Tri-State explained that it was previously exempt from FERC jurisdiction because it was wholly owned by electric cooperatives and state governmental entities—themselves exempt from FERC regulation under the Federal Power Act. According to Tri-State, it ceased to be exempt from FERC jurisdiction as of September 3, 2019, when it admitted Mieco, Inc., a natural gas supplier and public utility subject to FERC jurisdiction, as a new member of its board. In anticipation of this change in jurisdictional status, Tri-State made several submissions to FERC including: long-term wholesale service contracts for the delivery of capacity and energy to its 43 members; a stated rate tariff establishing a cost-of-service rate for the services provided under those long-term wholesale service contracts; an OATT establishing a formula rate for transmission service; other non-conforming transmission service agreements; an Order No. 845 compliance filing regarding interconnection procedures; and applications by both Tri-State and Thermal Cogen for market-based rate authority.

FERC rejected Tri-State’s filings, focusing its analysis on Tri-State’s failure to adhere to its policy and precedent requiring transparency in tariff filings. With respect to Tri-State’s stated rate filing, FERC explained that Tri-State failed to: provide estimates of its transactions and revenues under the rate schedule for a year following commencement of service; provide sufficient cost support materials to justify the cost-of-service rate; and provide the underlying cost-of-service and rate design study. With respect to Tri-State’s OATT formula rate, FERC explained that Tri-State’s data was derived from company records and other data that was not publicly available or clearly supported by the record, and that interested parties could not replicate the output of the formula rate because Tri-State failed to file its formula rate templates in native file format. FERC also rejected the long-term wholesale service contracts, non-conforming transmission service agreements, and Order No. 845 compliance filing as dependent on the existence of a stated rate tariff and OATT. Finally, FERC rejected the applications for market-based rate authority, reasoning that Tri-State and Thermo Cogen failed to demonstrate a lack of vertical market power given that neither had OATT on file.

FERC’s October 4 order, including an index of all entities that filed notices of intervention, motions to intervene, protests, comments, and answers in the Tri-State proceedings, is available here.