Federal regulators have given Tri-State Generation and Transmission Association the green light to go forward with a new wholesale rate design.

In a news release, Tri-State said an approximately 6.3% average increase in member wholesale rate went into effect Thursday after 7.5 years of flat and lower wholesale rates for members.

According to Tri-State, the new wholesale rate design will help ensure the nonprofit wholesale power provider can collect revenues to cover its cost of service and meet all financial goals, while managing costs and maintaining competitive wholesale rates.

“Tri-State’s members worked together to develop and support our new wholesale rate,” said Duane Highley, Tri-State CEO, in a statement. “Importantly, Tri-State can recover the costs necessary to reliably and affordably advance our clean energy transition, even as we manage costs and increase our competitiveness.” 

The member-developed wholesale rate design has been accepted, subject to refund, by the Federal Energy Regulatory Commission and referred to the commission’s settlement and hearing procedures.

On Dec. 1, Tri-State filed an electric resource plan that seeks to leverage potential federal funding, combined with new direct pay clean energy tax credits and the cooperative’s finances to make its largest ever investment in new resources.

Under the plan, Tri-State would add 1,250 megawatts of renewable resources and energy storage, while also adding dispatchable resources, significantly reducing greenhouse gas emissions and working to preserve reliability and affordability.

Tri-State’s board of directors approved an approximate 6.3% increase in the average Class A wholesale rate, reflecting a net increase of 1.4% from the actual average Class A wholesale rate paid by members in 2017, which is approximately 0.2% annualized and significantly below the rate of inflation. 

Uniquely, Tri-State’s Class A wholesale rate includes all of the costs, including energy, capacity, transmission and ancillary services to deliver power into members’ electric distribution systems across the rural West. 

The new wholesale rate will also maintain Tri-State’s postage stamp rate, with the same rate components for all members.

The new formulary rate can be adjusted annually based on the budget approved by Tri-State’s board, including an annual true-up mechanism.

According to Tri-State, wholesale rates are set to ensure the financial flexibility to meet member goals, with excess margins allocated as patronage capital and eventually returned to members.