Should we stay or should we go? The latest on LPEA’s future power supply options

7/2/2021

In this edition of #LPEAwire, LPEA CEO Jessica Matlock gives an update on the latest developments with LPEA’s three future power supply options. Brought to you by La Plata Electric Association

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Hi, I'm Hillary Knox, VP of member experience at La Plata Electric Association. And this is your LPEA Wire for July. We just concluded our 2021 director elections, and want to thank you for taking the time to cast your vote. The future of LPEA's power supply was a big point of discussion this election season. So to address some of the questions, concerns, and misinformation out there, I sat down with LPEA's CEO, Jessica Matlock. All right, So Jessica, thank you so much for joining me today.

Thanks for having me.

So there have been a lot of questions lately, and I think some misinformation around where we are with our current power supply discussions. So since 2019, really we as a staff, at the direction of the board, have been exploring three options. So often number one was to explore more flexibility within our contract with Tri-State. So where are we on that?

Yeah, so as you mentioned, since 2019, we've been heavily looking at this option, the board and staff, and it's been taking a really long time. And honestly, there's not really an option for option one. Even Tri-State has acknowledged that there's really no more flexibility in the contract. But instead, we did come up with an idea, and that leads us into option two. So that one is a flexible contract.

So, option number two was to explore potentially a partial contract with Tri-State, which would allow us to get some of our power from them and some of our power from other sources. So where are we with that?

Sure. So Tri-State actually needed to need 300 megawatts of power in their future. And so when talking to them about flexibility, they said, "Okay, well, why don't we allow some of the co-ops to achieve that?" So meet that 300 megawatts. So they did open season network. And what they did is they said, "Okay, what co-ops would like to apply for that power?" We were one of three co-ops that applied for that power, and we won a certain allocation. So at this point, we're still working with Tri-State to see how the contract would be structured. And we've also put out a request for proposal to see what other power suppliers can fill that gap, fill that need for us. So we're currently in that process, it's going to take some time. We have consultants looking through the details, and we'll have more information this fall. And then we'll also have town hall meetings, where we can educate the members to the specifics of each of these items. In the fall, that's when the board will look at the details and the costs and make sure reliability is set and safety and cost control, local control, and then we'll make a decision to see if we're going to move forward with that or not.

Alright, so that's option two. Option number three was a full exit from our contract with Tri-State. So where are we with that?

Sure. So that one is going to take a little more time. That is actually at the Federal Energy Regulatory Commission, which most people call FERC. So right now, Tri-State has become FERC jurisdictional at their request, and so all of these items, they're wholesale electric rates, the buyout figures, have to go to the federal government in Washington, DC. So for us to have a voice there, now we have to go to FERC. So we are there, working with Tri-State on this buyout figure. We've asked for it for over two years now, and we have not gotten the number, so we don't know what to compare with. And we'd like to compare our options. It's just as if you would want to compare pricing for your phone bill. So again, the board has not made any decision. We're currently gathering information, but it's just as if you would want to look at your own costs at home and see where you can save money, but also stay safe, reliable. We want to do the same, and so that's why we're looking at these options.

Thanks, Jessica. For the latest updates on LPEA's future power supply discussions, visit our website at LPEA.co-op/powersupply. And that's it for this July edition of LPEA Wire. We'll see you next month with more from LPEA

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