According to a press release from Tri-State Generation and Transmission, Socorro Electric Cooperative’s power supplier, on August 2, the Federal Energy Regulatory Commission approved a settlement in the first major rate case filed by Tri-State since the power supplier became subject to FERC jurisdiction in September 2019.
The uncontested settlement resolves key issues from regulatory filings that Tri-State made in late 2019 and 2020 regarding its rates and terms for wholesale power service to its 42 utility members in Colorado, Nebraska, New Mexico and Wyoming.
The settlement with FERC resulted in an immediate reduction in Tri-State’s current wholesale rate, with a total decrease in rates of four percent by March 1 of next year. Tri-State has already implemented a two percent rate decrease, which went into effect on March 1, 2021, and promises another 2 percent decrease on March 1, 22.
“We are pleased with this outcome and FERC’s approval of the settlement, which provides both a significant wholesale rate reduction and rate certainty going forward for our utility members,” said Duane Highley, Tri-State’s Chief Executive Officer. “As a cooperative, Tri-State is working together with its members and taking bold steps today to create a bright future and clean grid. This settlement is a significant step toward this vision.”
Jimmy Capps, Director of Communications and Public Affairs of Socorro’s co-op, said SEC customers began receiving the benefit of this rate reduction with their June 2021 billing statements through the “Power Cost Adjustment” factor that fluctuates monthly based on changes in its Cost of Power from Tri-State.
The overall $300,000 in annual savings to SEC is now included in the monthly Power Cost Adjustment calculation on future bills for all SEC members.
“The Power Cost Adjustment reflects the monthly change in SEC’s wholesale cost of power compared to the cost of power at the time the present rates were designed and approved by the Public Regulation Commission in 2011, he said.
According to Capps, the adjustment changes from month to month because of the different types of resources used to generate electricity and the changes in the amount of electrical demand placed on the entire generating system.
“For example, in 2020 SEC’s monthly power cost fluctuated from a low of $0.073/kWh in January, to a high of $0.083/kWh in September due to the higher demand for air conditioning load,” Capps said, pointing out that Tri-State has not raised its wholesale rate to SEC in the past 5 years and these reductions are a part of their goal to decrease rates, totaling eight percent by 2024.
“While SEC already has one of the lowest average Residential Rates among electric cooperatives in New Mexico,” he said. “This decrease reflects the commitment that Tri-State has made to affordability at a time when prices for most other ‘life essentials’ continue to rise.”