Tri-State Generation and Transmission Association is considering bylaw changes that would create different membership classes for the electrical cooperatives it serves. If members approve the proposed changes, it would add options other than the current “all-requirements” contracts.
Tri-State hopes to attract entities that may be eyeing its services, but that don’t want to be bound by an all-requirements agreement. It says the proposed bylaws amendment could provide members and prospective members flexibility, while still meeting their contractual obligations to other members.
“There are other entities that have had an interest, over the years, in joining Tri-State, but not in becoming a class-A all-requirements member,” association spokesman Lee Boughey said.
“As those entities look at power supply, changing the bylaws would give the (Tri-State) board of directors opportunities to structure different types of membership for those that are not members of Tri-State today.”
Tri-State is the power wholesaler for more than 40 cooperatives in Colorado, including Delta-Montrose Electric Association, and other states.
One of the largest cooperatives in its membership, United Power, wants bylaw revisions that establish partial-requirements membership classes.
“We believe that adding flexibility to our collective contractual relationship with Tri-State will allow and encourage the member co-ops to stay together and work together to successfully meet the challenges of the future,” United Power’s board chairman James Vigesa said in a Feb. 26 letter to DMEA.
“ … We are convinced that the changes which will be required to keep Tri-State relevant in the future are complex and evershifting, and we also believe the first step in the evolutionary process is adding the flexibility that will be created by adding partial-requirements membership classes at this juncture in our history.”
Vigesa called the envisioned partial-requirements bylaw change a “critical first step.”
Tri-State’s December draft amendment to its bylaws adds provisions to the sections concerning purchase of power and electricity. The amendment states rates for power and energy, and any other service Tri-State provides, may be different for different membership classes and also different for individual members within classes of membership.
The draft also adds a section for additional membership classes and provides that the board of directors may establish one or more of these, along with rights, preferences and limitations.
United Power submitted its own proposed language, which defines all-requirements and partial-requirements members.
A special meeting March 6 addressed the board’s proposed amendment; this will be considered at Tri-State’s annual meeting April 3.
“The intent of the board would be, if the bylaw change is approved by the membership, to have a contract committee of the membership to consider potential changes to the contract and make recommendations to members,” Boughey said.
DMEA is unconvinced the proposed changes will be meaningful, but it is not opposed to different contract classes and is backing United Power, local cooperative board president Bill Patterson said.
“The new bylaw, really, we don’t see it as being a real solution for us. Everything is under control of the (Tri-State) board and so far, the majority of the board hasn’t shown any inclination to change,” he said.
DMEA is locked in a battle with Tri-State over its contract, valid through 2040. The Colorado Public Utilities Commission is considering DMEA’s request to compel a “just and nondiscriminatory” exit fee to leave Tri-State.
Tri-State unsuccessfully argued the PUC did not have jurisdiction over the matter, because it was a contract issue. DMEA contends the exit fee pertains to rates, which the PUC governs. In February, the PUC asserted jurisdiction.
A suit Tri-State filed in Adams County over jurisdiction is pending, although later in February, the Colorado attorney general filed a motion for its dismissal.
United Power in its push for creating a partial-requirements membership class indicated doing so might avoid the prospect of members “wanting or needing” to buy out of Tri-State.
Boughey was asked whether the proposed bylaw change could keep members from trying to leave the association.
He said the bylaw change gives the board of directors the ability to consider alternative contract arrangements for existing members, which would be a next step. Some members want more options and flexibility, so if the bylaw change is passed, that opportunity is providing for the next steps.
“This really is a strong example of how cooperative self-governance works. The membership come together and consider the issues and, through our democratic processes, move forward together to find solutions,” Boughey said.
Katharhynn Heidelberg is the senior writer for the Montrose Daily Press. Follow her on Twitter @kathMDP.