Co-ops challenge canceled rate rise

Tri-State Generation and Transmission Association has filed a federal complaint in a jurisdictional dispute with the Public Regulation Commission springing from the suspension of a rate increase for 12 New Mexico cooperatives.

The association, which also sells power wholesale to 32 co-ops in Colorado, Nebraska and Wyoming, claims the PRC has no authority over interstate wholesale sales and that the state law that purportedly authorizes the commission to suspend the rates violates the U.S. Constitution’s commerce clause.

PRC Commissioner Pat Lyons predicted the PRC will prevail. “They have to be regulated by somebody and if we have to, we’ll take this all the way to the Supreme Court, he said.

Lyons, a former state senator, contends Tri-State agreed to PRC jurisdiction in state legislation needed for its merger with Plains Electric in 1999.

According to a Tri-State complaint filed in U.S. District Court, Tri-State filed notice with the PRC last fall that a new rate design and 4.9 percent increase for member co-ops would take effect Jan. 1 due to higher costs of service. It said the new rates would increase an average homeowner’s cost by $3.33 a month.

Three New Mexico co-ops — Kit Carson, Continental Divide and Springer — filed protests. Under state law, if three or more New Mexico members file protests and the PRC finds there is just cause in at least three, it can suspend the rates and order a hearing — which it did Dec. 20. A hearing is set for Oct. 22. Tri-State has filed notice with the PRC for interim rates.

Tri-State spokesman Lee Boughey said the association’s board of directors regulates rates, with general oversight by the federal Rural Utilities Service, which requires rates sufficient to pay indebtedness for loans made to Tri-State. It’s the first time a Tri-State increase was suspended, he said. He said Tri-State operates “solely in interstate commerce.”

“None of the states in which Tri-State participates in interstate commerce have jurisdiction over Tri-State’s wholesale rates,” he said.

Tri-State says revenue shortfalls from New Mexico members would put an unfair burden on other members. Boughey said that in a stipulation regarding the merger with Plains Electric, Tri-State specifically reserved its legal rights to challenge any PRC decision in the courts.