Raymond Gifford, a former chairman of the Colorado Public Utilities Commission (CPUC) involved in electricity deregulation efforts and the early stages of an energy transition to alternative generation in his state, sees a shakeup still to come in power generation and transmission in Wyoming’s energy landscape.
Eight years ago, Gifford became the legal architect behind helping the first electric distribution cooperative breakaway from Tri-State Generation and Transmission Association, a 44-member co-op in a four-state region, including parts of Wyoming.
“Wyoming’s co-ops need to be on guard for their own interests and where they might diverge from Tri-State’s interests,” said Gifford of the eight-co-ops in Wyoming that have held together as a group despite coal-fired power plants getting closed in Colorado and elsewhere due to cheaper power offered by natural-gas plants and wind and solar powered generation.
“The challenge they face is Tri-State ends up with much weaker economic prospects to dig itself out of a hole that Tri-State has put itself in,” Gifford told Cowboy State Daily.
Tri-State holds billions of dollars in debt, and as more and more co-ops pay to leave their system, questions will emerge over their financial viability, Gifford said.
“How do you survive and thrive in an area where coal is no longer king and you were once the Saudi Arabia of coal in the United States?” Gifford asked about Wyoming’s rural electricity distribution cooperatives.
Gifford has offered a simple solution for the co-ops.
“With enough transmission infrastructure, Wyoming can become an energy exporter, which brings more jobs and money to Wyoming even if the rest of the U.S. West is pursuing energy policies that Wyoming finds laughable and expensive,” he said.
He said that Wyoming could do more to fill the energy gap between reliably dispatched power from coal- and natural gas-fired power plants and alternative forms of energy that Colorado is pushing through decarbonization efforts.
Denver Hippies
“Maybe Wyoming could line up (natural) gas combustion turbines along the Colorado and Wyoming border and tell the hippies down in Denver, ‘You have a nice wind system there, but would you like some of our nice, reliable power?’” he said.
“What I’d tell the Wyoming co-ops is that they need to do the hard analysis, which is ask, ‘What is best for my members, and is it better to exit Tri-State and find an alternative power supply, and how soon does that result in lower rates?’” added Gifford, who was chairman of the Colorado PUC from 1999 to 2003. “Is it worth sticking it out with Tri-State, which faces an increasingly murky future?”
Tri-State spokesman Lee Boughey disagreed with Gifford’s assessment of his electricity co-op.
"Tri-State remains financially strong, meeting all of our financial goals with stable rates,” Boughey said.
Since 2017, wholesale rates for Tri-State have been “flat,” with a 4% rate decrease in 2021-2022, and a 6.3% rate increase implemented Aug. 1, he said.
“Over 7 1/2 years, our wholesale rates have increased a net 1.4%,” Boughey said. "Other utilities in the region continue to see double digit rate increases, making Tri-State’s members increasingly competitive in the region."
Boughey also said that Wyoming members benefit from "a growing portfolio of generation resources that will have costs that are less prone to commodity price fluctuations."
Wyoming’s electricity distribution cooperatives include Big Horn Rural Electric Co. in Basin; Carbon Power & Light Inc. in Saratoga; Garland Light & Power Co. in Powell; High Plains Power Inc. in Riverton; High West Energy Inc. in Pine Bluffs; Niobrara Electric Association Inc. in Lusk; Wheatland Rural Electric Association; and Wyrulec Co. in Torrington.
Wyoming Behind
Gifford thinks that Wyoming’s co-ops may be further behind in the energy transition because of their lock-step adherence to coal as their main commodity while the rest of the world has quickly embraced cheaper natural gas fueled by a “fracking revolution” over 20 years ago and tax credits offered for building more wind and solar projects more recently.
Fracking is the energy term used to describe fracturing of formations in bedrock by a pressurized liquid to access natural gas and oil.
In 2016, Gifford was the lawyer who helped New Mexico’s Kit Carson Electric Cooperative sever ties with Tri-State, the first distribution electricity cooperative to bolt the Colorado-based Tri-State based on the belief that it could get cheaper wholesale power delivered to its customers.
Escaping Tri-State
The Kit Carson case became the model for others to follow.
Based on a regulatory formula on how much co-ops should pay to leave Tri-State, other co-ops have followed suit, much of this credited to Gifford’s arguments before the Colorado PUC and the Federal Energy Regulatory Commission in Washington, D.C.
Kit Carson paid $37 million to escape Tri-State, then four years later, Gifford helped Colorado-based Delta-Montrose Electric Association leave Tri-State after sparring with the parent company for years over renewable energy. The co-op agreed to pay a $136.5 million fee to exit Tri-State.
Meanwhile, there are three other co-ops — two in Colorado and one Nebraska — in various stages of leaving Tri-State.
Granby, Colorado-based Mountain Parks Electric Inc. provided notice to Tri-State in March 2023 that it intends to withdraw from the distribution cooperative’s membership by next spring.
Durango, Colorado-based La Plata Electric Association Inc., the fifth largest distribution cooperative, filed plans to exit Tri-State in March, with a termination date scheduled for April 2026.
Gifford, who is now managing partner with the Denver-based law firm of Wilkinson Barker Knauer, is helping La Plata on this exit as well.
Nebraska-based Northwest Rural Public Power District had been scheduled to leave Tri-State earlier this year but encountered a dispute over the termination fee. It continues to move forward with leaving.
To date, the biggest departure was United Power Inc. in Brighton, Colorado, which paid more than $702 million to leave Tri-State. The head of United Power, Mark Gabriel, said his electric distribution co-op generated about 20% of Tri-State’s revenue when it left in May.
Colorado Bullies
The Wyoming co-ops remain staunchly behind Tri-State as Colorado pushes anti-coal and alternative energy policies.
“I believe the Wyoming co-ops have some issues with Tri-State. But they are more about the state of Colorado trying to push the anti-fossil and renewables,” said Jerry Thompson, president of the board of directors of the Garland Light & Power Co. in Powell, Wyoming.
“And it is costing our members more to implement those ideas, which I don't think the Wyoming people agree with and shouldn't have to,” he said.
Pat Maio can be reached at pat@cowboystatedaily.com.
