UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

Tri-State Generation and
Transmission Association, Inc.

Thermo Cogeneration Partnership, L.P.

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Docket No.
Docket No.
Docket No.
Docket No.
Docket No.
Docket No.
Docket No.

ER19-2440-000
ER19-2441-000
ER19-2442-000
ER19-2444-000
ER19-2470-000
ER19-2474-000
ER19-2443-000

ANSWER OF THE COLORADO PUBLIC UTILITIES COMMISSION TO
NOTICE OF NEW MEMBER AND REQUEST FOR PARTIAL WAIVER
Pursuant to Rules 212 and 213 of the Rules of Practice and Procedure of the Federal Energy
Regulatory Commission (“Commission”),1 the Colorado Public Utilities Commission (“CoPUC”)
hereby moves for leave to answer and submits the following Answer in response to the Notice of
New Member and Request for Partial Waiver submitted by Tri-State Generation and Transmission
Association, Inc. (“Tri-State”) on September 3, 2019. As explained in more detail below, the
Commission should not reward Tri-State’s behavior by accepting its filings and giving them effect
as of September 3, thereby granting Tri-State full relief and excusing Tri-State from the
consequences of its actions. Instead, the Commission should reject all of Tri-State’s filings as
incomplete and require it to explain how its purported admission of a new member works to
eliminate its exemption from Commission regulation under Section 201(f) of the Federal Power
Act (“FPA”) and why this transaction does not require Commission approval under the FPA. In
addition, the Commission should explain that if Tri-State is a jurisdictional public utility without
rates on file, then Tri-State’s time-value refund obligation to all of its customers runs from
September 3, 2019 (the admission of Mieco Inc. (“Mieco”) to Tri-State’s membership) until such

1

18 C.F.R. §§ 385.212, 385.213.

 date as the Commission eventually accepts Tri-State’s re-filed tariffs and contracts (if that outcome
ever occurs). The Commission is under no obligation to save Tri-State from itself.
Specifically with respect to Tri-State’s waiver request, the Commission should not grant
the request even if the Commission accepts the filings. Tri-State has not demonstrated the “good
cause” necessary to secure a waiver, and indeed, its hasty admission of a new member appears to
be an attempt to restrict the Commission’s options in dealing with Tri-State’s filings. Although
Tri-State intimates that the admission of the new member resolves the myriad legal issues
presented by its filings, that simply is not the case. If anything, the admission of Mieco only
increases the legal jeopardy Tri-State’s filings are in. The Commission should not reward TriState’s brinksmanship by accelerating its consideration of these filings in order to remedy a legal
problem that Tri-State itself caused.
MOTION FOR LEAVE TO ANSWER
The Commission’s rules permit parties to submit answers to “any pleading” aside from
protests, answers, motions for oral argument, and requests for rehearing.2 The CoPUC respectfully
submits that this Answer responds to Tri-State’s pleading seeking a partial waiver, filed September
3, 2019, and provides information that will assist the Commission in its decision-making process.3
Specifically, this Answer explains that Tri-State has not articulated good cause for the waiver it
seeks, and that Tri-State’s unilateral actions do not deprive this Commission of its authority,
ability, and responsibility to properly resolve these proceedings on the timetable that Congress
intended. The remedies that the CoPUC and others have requested remain fully available. In light
of these contributions, the CoPUC respectfully requests that the Commission accept this Answer.

2

18 C.F.R. § 385.213.
New York Indep. Sys. Operator, Inc., 108 FERC ¶ 61,231 at P 18 (2004) (accepting answers “because
they provide information that assists us in our decision-making process”).
3

2

 ANSWER
INTRODUCTION
Tri-State’s choice to admit its new member during the pendency of the statutory 60-day
notice period applicable to its filings represents an attempt to force the Commission to accept those
filings on limited information and on an abbreviated timeframe. Simply put, Tri-State chose to act
first and seek forgiveness later. This is an extraordinarily poor start to Tri-State’s relationship with
its regulator, and it should not be condoned, let alone rewarded.
To be clear: Tri-State’s purported admission of its new member as of September 3 was
entirely voluntary. Tri-State claims that the protests filed by the parties to this proceeding
“compelled” it to admit a new member.4 But its cry that “the protesters made me do it,” simply
fails the laugh test. Rather, Tri-State took this rash action, potentially putting itself in violation of
the Federal Power Act, because it desperately hopes to inveigle the Commission into not
dismissing its filings.
Tri-State has asked the Commission to accept its filings effective as of September 3rd in
order to insulate Tri-State from the consequences of its own actions. The Commission should not
condone that decision, nor fix Tri-State’s self-inflicted problem.
The Commission’s options are not as constrained as Tri-State’s request for waiver
implies—Tri-State’s claimed admission of a new member does not prevent the Commission from
rejecting all of Tri-State’s filings along with its waiver request. Rather, by taking the following
straightforward steps, the Commission can resolve the issues presented by these proceedings. First,
the Commission should require Tri-State to demonstrate that Mieco holds an ownership interest in

4

Notice of New Member and Request for Partial Waiver of Tri-State Generation and Transmission
Association, Inc. at 3, Docket Nos. ER19-2440-000, et al. (filed Sept. 3, 2019) [‘Tri-State September 3rd
Notice’].

3

 Tri-State. Second, the Commission should require Tri-State to explain why it does not need
approval under the Federal Power Act to admit Mieco as a member. Third, the Commission should
dismiss Tri-State’s rate and contract filings because they remain incomplete in many material
respects. Fourth, the Commission should find Tri-State’s request for a waiver moot because its
filings are not acceptable in the form presented, and cannot be given any effective date, let alone
one that is now in the past. Finally, the Commission should make clear that Tri-State will have to
provide refunds for any amounts that it unlawfully collects during the entire period that it operates
as a jurisdictional public utility without approved rates on file.
TRI-STATE HAS NOT DEMONSTRATED THAT IT IS NO LONGER EXEMPT
FROM COMMISSION REGULATION UNDER SECTION 201(F).
Section 201(f) provides that an electric cooperative is exempt from Commission regulation
if the cooperative: (1) has outstanding Rural Utilities Service (“RUS”) debt; (2) sells less than
4,000,000 MWh of electricity per year; or (3) is wholly owned by entities that are themselves
exempt under Section 201(f).5 Historically, Tri-State has been exempt from Commission
jurisdiction either because it held RUS debt itself, or because all of its members have been
cooperatives that are exempt under Section 201(f).6
Tri-State claims that Mieco is not exempt, and as a result, that Tri-State is “no longer
wholly-owned” by entities that are themselves exempt from Commission jurisdiction.7 In other
words, Tri-State’s allegation that it is subject to Commission jurisdiction rests entirely on the
premise that Mieco is an owner of Tri-State.

However, Tri-State’s pleadings contain no

information concerning the mechanism by which Mieco gained “admission” to Tri-State’s

16 U.S.C. § 824(f); see also Delta-Montrose Elec. Ass’n, 151 FERC ¶ 61,238 at P 26 (2015).
Transmittal Letter in Docket No. ER19-2440-000, at 1-2 n.5; Delta-Montrose, 151 FERC ¶ 61,238 at
P 27.
7
Tri-State September 3rd Notice at 2.
5
6

4

 membership. In particular, there is nothing supporting a conclusion that Mieco owns Tri-State for
purposes of Section 201(f).
In other circumstances, the Commission has found that Tri-State’s member cooperatives
are owners of Tri-State, such that Tri-State was “wholly owned” by cooperatives that are exempt
under Section 201(f).8 In Delta-Montrose, the Commission concluded that the cooperative in
question was both a member and an owner of Tri-State, based on a finding that, like all other
members, the cooperative had “a patronage account representing each member’s financial
ownership interest in the corporation, i.e., the amount a member pays for energy which exceeds
Tri-State’s cost of service, and upon dissolution each member is entitled to an equitable share of
the assets, and each member has a vote in Tri-State’s operations.”9 The Commission thus looked
at three indicia of ownership in Delta-Montrose – 1) the existence of an equity stake in Tri-State;
2) a claim on assets after any dissolution; and 3) a vote on the Board of Directors.
The record presented in these dockets includes no evidence whatsoever on any of these
points. Tri-State provides no information about Mieco’s patronage account, its right to claim TriState’s assets on dissolution, or its voting rights. Indeed, the most detailed information concerning
Mieco’s alleged admission as a Tri-State member appears in the industry press, rather than filings
before the Commission.10 In a September 3, 2019, press release touting the admission of Mieco
and the resultant “move to FERC rate regulation,” Tri-State’s Chairman Rick Gordon is quoted

8

Delta-Montrose, 151 FERC ¶ 61,238 at PP 26, 29.
Id. at P 29.
10
Tri-State, Press Release: Tri-State adds MIECO as a new cooperative member, (Sept. 3, 2019; accessed
Sept. 10, 2019), available at www.tristategt.org/tri-state-adds-mieco-new-cooperative-member [‘Tri-State
Press Release’]; see also R. Walton, Utility Dive, “Tri-State subject to FERC regulation as it adds non coop member,” (Sept. 4, 2019), available at www.utilitydive.com/news/tri-state-comes-under-fercregulation-as-it-adds-non-co-op-member/562188/.
9

5

 explaining that “MIECO will be eligible for patronage capital allocations and have voting rights
at all membership meetings, but will not have a seat on the Tri-State Board of Directors.”11
It appears that all three indicia identified in Delta-Montrose are absent here. First, Mieco’s
current “financial ownership interest” appears to be minimal (if not zero) and will remain at that
level for the foreseeable future. Mieco may have a patronage account, but under Tri-State’s bylaws,
that account can only be funded through payments for electricity.12 As a new member, Mieco has
certainly not funded its patronage account via excess historic payments to Tri-State for electric
service. Furthermore, given the nature of Mieco’s business—supplying natural gas to entities
including Tri-State—it appears that Mieco will not pay Tri-State for electric generation or
transmission service in the future such that excess payments could populate a patronage account.
Notably, unlike all its other members, Tri-State has not sought Commission approval to make sales
of electricity to Mieco. Thus, even accepting Tri-State’s position that it is now a public utility, it
cannot make the necessary sales to Mieco to fund its patronage account.
Second, the equitable share of the assets that Mieco could claim upon dissolution is also
zero for the same reason. Article II, Section 1 of Tri-State’s Bylaws outlines the dissolution process
and states that “the remaining property and assets of this Corporation shall be distributed among
the members in the proportion which the aggregate patronage of each bears to the total patronage
11

See Tri-State Press Release (emphasis added).
Delta-Montrose Elec. Ass’n, FERC Docket No. EL15-43-000, Tri-State Generation & Transmission
Ass’n Motion to Intervene and Protest, Attachment B at 8 (Articles of Incorporation and Bylaws) (filed
March 11, 2015) (“It is expressly understood that amounts paid for electric power and energy in excess of
the cost of service are furnished by members as capital and each member shall be credited with capital so
furnished as provided in these Bylaws.”); id. at 20 ([T]he Corporation is obligated to account on a
patronage basis to all its members for all amounts received and receivable from the furnishing of electric
power and energy in excess of the sum of (a) operating costs and expenses properly chargeable against
the furnishing of electric power and energy, (b) amounts required to offset any losses incurred during the
current or any prior fiscal year, and (c) adjustments to reserves or deferred credit accounts for the purpose
of stabilizing margins and rate increases from year to year. All such amounts in excess of operating costs
and expenses at the moment of receipt by the Corporation are received with the understanding that they
are furnished by the members as capital.”).
12

6

 of all members and former members.”13 If Mieco’s patronage account is empty, its equitable share
under this accounting method is also zero.
Third, unlike all other Tri-State members, Mieco lacks “a vote in Tri-State’s operations.”14
As the press release makes clear, Mieco does not have a seat on the Board of Directors. Thus,
whatever the terms of Mieco’s “admission” to Tri-State, Mieco is not equivalent to other members
which have funded patronage accounts, rights to equitable shares of assets upon dissolution, and
rights to nominate members of Tri-State’s board of directors. In the absence of further evidence,
the Commission should not simply assume that Mieco’s membership in Tri-State means that it is
an “owner” within the meaning of Section 201(f).
Requiring Tri-State to clarify the record and provide additional evidence of Mieco’s
“ownership” interest is consistent with long-standing Commission precedent on this statutory
provision. While the current version of Section 201(f) was enacted with the Energy Policy Act of
2005, the relevant language long predates that statute. In Nebraska Power Company,15 the Federal
Power Commission considered whether a corporation was “wholly owned” by a political
subdivision of a state. There the common stock was entirely held by the government entity but
some preferred stock was in private hands.16 The Commission refused to read the statute woodenly
and looked to the economic substance of the interest. It recognized that it “appears impossible for
the preferred stockholders at any time to control the management and operation of the applicant
corporation” and that Congress “had in mind the usual understanding that the owner of the

13

Id. at 10.

14

Delta-Montrose, 151 FERC ¶ 61,238 at P 29.
5 F.P.C. 8, reh’g denied, 5 F.P.C. 408 (1946)
16
Id. at 20.
15

7

 common capital stock is the owner of the corporation.”

17

The same rule should apply here.

Whatever interest Mieco holds in Tri-State, it looks nothing like the type of “ownership” the
Commission has recognized as relevant in Nebraska Power and Delta-Montrose.
Thus, at the very least, investigation is required to determine whether Mieco “owns” TriState for purposes of determining whether the Section 201(f) exemption continues to apply to TriState. Indeed, if the Commission were to act in any way other than opening such an investigation
or dismissing all of Tri-State’s filings, it would risk taking action that it may not have the
Congressionally-granted jurisdiction to take.
SECTION 203 AND 205 APPROVAL MAY BE REQUIRED BEFORE THE
TRANSACTION WITH MIECO IS EFFECTIVE.
Tri-State claims that it has unilaterally admitted Mieco as a member and merely needs to
provide “notice” to the Commission of that fact. Tri-State and Mieco, though, have not explained
why they may enter into this transaction without Commission approval. Indeed, the Federal Power
Act may require two separate sets of approvals for this transaction—approvals that have not been
sought or obtained. First, Section 205 approval may be required for any agreement between Mieco
and Tri-State that creates any ownership interest that results in Commission-jurisdictional rates.
Second, Section 203 approval may be required here before Mieco can acquire any interest in TriState. The failure to seek approval under these provisions (or clearly explain why approval is not
required) provides an additional basis to simply reject Tri-State’s filings out of hand.
First, Section 205(c) imposes a broad filing requirement for jurisdictional agreements.
Entities must file “all contracts which in any manner affect or relate to such rates, charges,

17

Id. See also Enron Power Marketing v. PJM Interconnection, 83 FERC ¶ 61,032 at 61,066-67 (1998)
(concluding that Amtrak was not “wholly owned” by the United States where significant common stock
was held by a non-governmental entity).

8

 classifications, and services.”18 Any agreement with Mieco to admit it to Tri-State’s membership
appears to meet this test. The Commission has recently held that an agreement that established the
termination date of jurisdictional service under another agreement is required to be filed.19 Under
Tri-State’s theory, its agreement with Mieco initiated FERC-jurisdictional service under all of the
other agreements it filed in these dockets. As a result, the agreement is likely subject to the
requirements of Section 205 and has to be filed for Commission approval.
Second, under Section 203, Commission approval is required for a wide range of corporate
transactions where an entity takes an ownership stake in a company subject to FERC jurisdiction.
In particular, Section 203(a)(2) requires Commission authorization before a “holding company in
a holding company system that includes a transmitting utility or an electric utility” acquires “any
security with a value in excess of” $10 million in “an electric utility company” or merges or
consolidates with such an entity.20
This provision consciously uses broad terms that have meanings far more expansive than
the more narrowly-defined term “public utility” used elsewhere in the statute. Tri-State, even
though exempt from federal regulation as a cooperative, is an “electric utility company” under
Section 203(a)(2) because it is a “company that owns or operates facilities used for the generation
[or] transmission … of electric energy for sale.”21 The Commission has been quite clear that, while
cooperatives and public power entities do not have filing obligations under Section 203(a)(2),

18

16 U.S.C. § 824d(c).
Arizona Public Serv., 156 FERC ¶ 61,006 at PP 31-32 (2016), reh’g denied 161 FERC ¶ 61,022 (2017),
rev’d APS v. FERC, No. 17-73244 (9th Cir. Jun. 14, 2019). While the Court of Appeals concluded that
the Commission did not establish that the agreement in that case set the termination date as a factual
matter, it did not alter the Commission’s legal conclusion that such an agreement would need to be filed.
Here, Tri-State’s own position is that the agreement initiated jurisdictional services. See also Entergy
Mississippi, Inc., 117 FERC ¶ 61,200 at PP 24-27 (2006) (finding agreement jurisdictional).
20
16 U.S.C. § 824b(a)(2).
21
Transactions Subject to FPA Section 203, Order No. 669, 113 FERC ¶ 61,315 at P 51 (2005).
19

9

 entities that acquire those non-jurisdictional entities are not exempt. When those assets are sold
and transformed “into a private company subsidiary, then section 203(a)(2) should apply[.] …
While no section 203 filing requirement would be imposed on the governmental entity, it would
be imposed on the private entity” seeking to make the acquisition.22
Thus the only questions here are a) whether Mieco or its parent, Marubeni Corporation,
qualifies as a “holding company” and b) whether the transaction is the type covered by Section
203. Tri-State has not provided the necessary information to determine the answers to these
questions. However, Marubeni is a large conglomerate whose “activities. . . extend to power
projects and infrastructure, plants and industrial machinery, finance, logistics and information
industry, and real estate development and construction.”23 These holdings stretch around the globe,
and include power assets on multiple continents, including in the United States.24 Indeed,
Marubeni Power International, Inc. is listed as a generation-owning affiliate member of PJM
Interconnection, LLC,25 and owns or has been involved in developing or purchasing power
generation and transmission assets across the United States.26 These assets even include generation
resources located in a relevant balancing authority for Tri-State’s market power analysis.27 As
such, it may qualify as a “holding company” under the statute.

22

Order No. 669, 113 FERC ¶ 61,315 at P 58.
MIECO Inc., About Mieco (accessed September 5, 2019), available at http://www.mieco.com/aboutmieco/.
24
See Marubeni Corp., Integrated Report 2018 at 120-21 (2018) (describing, at a high level, the affairs
and holdings of Marubeni’s Energy & Metals and Power Business & Plant Groups), available at
https://www.marubeni.com/en/ir/reports/integrated_report/pdf/ir2018_en_all.pdf.
25
PJM Interconnection, LLC, Member List – PJM Membership as of September 5, 2019 (accessed
September 6, 2019), available at https://www.pjm.com/about-pjm/member-services/member-list.aspx.
26
See Marubeni Power International, Inc., Recent News (accessed September 5, 2019), available at
https://marubeni-power.com/news.html.
27
See Triennial Report of Spindle Hill Energy LLC, Docket No. ER10-2135 at 5, n.12 (dated Dec. 23,
2016) (listed Marubeni Corporation as an indirect owner of Spindle Hill, a gas-fired generator located in
the Public Service Company of Colorado balancing authority area).
23

10

 Moreover, Tri-State needs to clarify the value of Mieco’s stake. Tri-State’s ownership
structure is opaque and the value of each “membership” is unclear. However, Tri-State is a
company with billions of dollars in assets28 and hundreds in millions of revenue in each quarter.29
Thus, it is possible that any ownership interest acquired by Mieco meets the statutory threshold
and Section 203 approval may be required before the acquisition is effective.
DISMISSAL REMAINS
PROCEEDINGS.

THE

APPROPRIATE

REMEDY

IN

THESE

Even if Tri-State’s action to admit its new member were otherwise valid, it does not resolve
the numerous other legal flaws in Tri-State’s filings, which necessitate that the Commission
dismiss or reject Tri-State’s filings.
First, large components of Tri-State’s filings are simply missing, including the policies of
its Board of Directors that dictate its ratemaking process and the rates themselves.30 In the absence
of this information, dismissal is the appropriate remedy. Certainly, filings with such a glaring
omission should not be accepted early via waiver. Second, as noted in the Sierra Club’s protest,
major revisions of Tri-State’s wholesale electric contracts may be necessary in order to ensure that
they comply with PURPA.31 In prior proceedings, Tri-State itself has emphasized the importance
of those contracts, and in particular, the provision capping members’ procurement of power from
other sources at 5%.32 Because the changes necessary to bring these contracts into compliance with

Tri-State Generation and Transmission Ass’n, Form 10-Q for the Quarter Ended June 30, 2019 at 1,
available at https://www.tristategt.org/sites/tristate/files/PDF/2019%20SEC%20filings/Q2-Form10Q080919.pdf.
29
Id. at 2.
30
See, e.g., United Power Protest at 5 & Exhibit B (noting Tri-State’s failure to file all relevant Board
Policies and enclosing several such policies in an exhibit).
31
Protest of Sierra Club, Docket No. ER19-2440-000 et al., at 16-20 (Aug. 23, 2019) [‘Sierra Club Protest’].
32
Request for Rehearing of Tri-State Generation and Transmission Association, Inc., Docket EL16-39, at
3 (July 18, 2016). Tri-State argued that a Commission order finding this term violated PURPA “could have
a disruptive effect on the entire United States rural electric cooperative program, creating uncertainty
regarding the enforceability of contracts with member electric cooperatives, threatening the financing and
28

11

 PURPA are not the sort of minor changes that the Commission may pursue consistent with NRG
Power Marketing LLC v. FERC,33 the appropriate remedy is to dismiss so that Tri-State may return
to the negotiating table and work with its members to modify them. Again, contracts that do not
comply with federal law should not be accepted early via waiver.
THE COMMISSION SHOULD DENY THE REQUESTED WAIVER.
The September 9, 2019, notice issued by the Office of Energy Market Regulation
concludes, in light of Tri-State’s Notice of New Member, that the filing date for six of the seven
Tri-State proceedings was September 3, 2019.34 This conclusion aligns with the Commission’s
long-standing practice of considering each amendment or supplemental filing after the initial filing
to establish a new filing date, and is appropriate here.35 If the Commission does not simply dismiss
Tri-State’s filings for all the reasons discussed above, it should reject Tri-State’s request for waiver
of the full statutory notice period.
The Commission grants waivers for “good cause shown” when the utility makes an initial
filing prior to the commencement of service, and the filing is not a “patent nullity.” 36 For all the
reasons discussed above, Tri-State’s initial filing is insufficient, and the identification of Mieco as
the alleged new member does not resolve those insufficiencies. Even if these insufficiencies do

creditworthiness of wholesale electric cooperatives like Tri-State, and promoting disputes with and among
wholesale electric cooperatives, their member distribution electric cooperatives and QFs.” Id. at 2.
33
NRG Power Marketing LLC v. FERC, 862 F.3d 108, 116 (D.C. Cir. 2017).
34
Office of Energy Market Regulation, Notice Issued to Tri-State Generation and Transmission
Association, Inc., Docket No. ER19-2440-000 et al. (Sept. 9, 2019).
35
See Duke Power Co., 57 FERC ¶ 61,215 at 61,713 (1991).
36
Cent. Hudson Gas & Elec. Corp. et al., 60 FERC ¶ 61,106 at 61,337, 61,339 (1992), reh’g denied, 61
FERC ¶ 61,089 (1992). Alternatively, when a tariff or contract for new service is filed on or after the day
on which the service commenced, waiver is not granted “[a]bsent extraordinary circumstances.” Id. at
61,339. For purposes of applying this rule, the timeliness of a utility’s filing is judged according to the
date of the initial submission. See Cent. Maine Power Co., 57 FERC ¶ 61,083 at 61,305 (1991).

12

 not render the filing a patent nullity, Tri-State has not shown the “good cause” necessary to obtain
a waiver of the notice period.37
Tri-State’s request for waiver arises from two affirmative choices made by Tri-State: first,
its choice to exclude from its initial filings any information about the identity of its new member,
or the precise timing of its anticipated admission into the cooperative38; and second, its choice to
proceed to admit that new member prior to the Commission’s acceptance of its filings and tariffs,
rather than amending or supplementing its initial filings to include the missing information.39 TriState anticipated at the time it chose to admit the new member that doing so would transform it
into a jurisdictional entity, with the result that it would be providing jurisdictional service without
jurisdictional rates.40 Good cause is not shown where the petitioner has full knowledge that its
voluntary action will violate the law without a retroactive waiver of that law, and takes action
despite that knowledge.41 Indeed, the very notion of granting waivers for ‘good cause’ shown
suggests that equitable factors must favor the party seeking the waiver, e.g. that circumstances
outside of a party’s control have necessitated that waiver. That is not the case here. In addition, as
the Commission has explained before, applicants’ errors in planning, timing, or administering
filings at the Commission do not constitute good cause.42

37

16 U.S.C. § 824d(d); see also Cent. Hudson, 60 FERC ¶ 61,106 at 61,339.
See, e.g., Transmittal Letter in Docket No. ER19-2440-000, at 1-2 (“Tri-State will cease to be whollyowned by [exempt] entities on or about 60 days from the date hereof, upon the admission of one or more
new Members/owners … that will not be an electric cooperative or a governmental entity and will not
directly or indirectly be wholly-owned by an electric cooperative or a governmental entity.”)
39
See Tri-State September 3 Notice at 3. Tri-State argues that its waiver request is driven by other
parties’ concerns as to whether Tri-State is actually a jurisdictional entity. Id. This argument is circular
and ignores that the burden of proof lies with Tri-State.
40
See Tri-State September 3 Notice at 2-3. See also Tri-State Press Release.
41
Allegany Generating Station, LLC, 147 FERC ¶ 61,147 at P 17 (2014).
42
See, e.g., Illinois Power Co., 75 FERC ¶ 61,269 at 61,878 (1996); Mississippi Power Co., 96 FERC
¶ 61,021 at 61,061 (2001).
38

13

 Tri-State argues that the Commission has found good cause in past cases where a waiver
“is limited in scope, addresses a concrete problem, and leaves ratepayers unharmed.”43 Tri-State
seems to be drawing a parallel to the Commission’s tariff waiver standard, under which waivers
may be granted if “(2) the waiver is of limited scope; (3) a concrete problem must be remedied;
and (4) the waiver does not have undesirable consequences, such as harming third parties.” 44 But
Tri-State makes no mention of the first (and perhaps most important) criteria for granting a tariff
waiver, that: “(1) the applicant has been unable to comply with the tariff provision at issue in good
faith.”45 Because Tri-State faced no difficulty here in complying with the notice requirement—let
alone an inability to comply—good cause for the granting of a waiver has not been shown.
In light of that foundational problem, even if Tri-State’s preferred, limited set of waiver
criteria were fulfilled, they would not constitute the requisite showing of good cause under the
FPA. But these preferred criteria are not fulfilled either. The waiver Tri-State seeks will have wideranging impacts on other entities—potentially including ratepayers—that are not explored or
justified in any Tri-State pleading. First, Tri-State’s request for waiver characterizes Mieco as “its
initial New Member,”46 implying that additional new members may follow. Second, and relatedly,
Tri-State’s request for waiver does not explain the impact of the admission of Mieco on the
applications of Tri-State or its affiliate, Thermo Cogeneration Partnership L.P. (“Thermo Cogen”)

43

Tri-State September 3 Notice at 4. Other criteria for good cause have been applied in other
circumstances. See, e.g., Meridian Energy USA, Inc. v. Cal. Indep. Sys. Operator Corp., 143 FERC
¶ 61,206 at P 24 (2013) (explaining that waiver may be appropriate when it is limited in scope, there are
no undesirable consequences, and the resultant benefits to customers are evident); see also Xcel Energy
Servs. v. FERC, 510 F.3d 314, 317 (D.C. Cir. 2007) (noting that the Commission has applied an
extraordinary circumstances standard of waiver for some kinds of new service agreements); ISO New
England Inc., 117 FERC ¶ 61,171, at P 21 (2006) (granting limited and temporary change to tariff to
correct an error).
44
Allegany, 147 FERC ¶ 61,147 at P 15.
45
Id.
46
Tri-State September 3 Notice at 2 (emphasis added).

14

 for market-based rate (“MBR”) authority.47 The request for waiver describes Mieco as a
“wholesale energy services company” that “supplies natural gas to purchasers throughout the
nation.”48 But it provides almost no meaningful information about Mieco’s assets, its corporate
structure, or its organization—information that is critical to an MBR analysis.49 Similar
information would be required if Tri-State admits additional new members in the future.
Moreover, the prior pleadings of CoPUC and other parties have pointed to numerous other
issues that will be exacerbated by a grant of Tri-State’s requested waiver. For example, Tri-State’s
filings may change the jurisdictional status of Basin Electric Power Cooperative (“Basin Electric”),
of which Tri-State is a member. Basin Electric’s intervention explains that it “anticipates that it
will become subject to the Commission’s jurisdiction under sections 205 and 206 of the Federal
Power Act on the same date that Tri-State admits a Commission-jurisdictional member,”50 but it
is not clear on this record what kinds of filings and approvals Basin Electric may need to also make
this transition. In another example, a grant of the waiver that Tri-State seeks could impede sales
by qualified facilities (“QFs”) to Tri-State’s member cooperatives.51 These impacts belie TriState’s claim that its requested waiver is limited in scope. Instead, Tri-State’s action to admit its
new member spawns numerous further questions that must also be resolved if waiver is granted.

47

See Application of Tri-State Generation and Transmission Association, Inc. for Market-Based Rate
Authority and Certain Waivers and Blanket Authorizations at 9-16, Docket No. ER19-2442-000 (filed Jul.
23, 2019) [‘Tri-State MBR Application’].
48
Tri-State September 3 Notice at 2.
49
18 C.F.R. § 35.37(a)(2).
50
(doc-less) Motion to Intervene of Basin Electric Power Cooperative, Docket No. ER19-2440-000 (Aug.
13, 2019) [‘Basin Electric Motion to Intervene’]; see also (doc-less) Motion to Intervene of MountrailWilliams Electric Cooperative, Docket No. ER19-2440-000 (Aug. 23, 2019) (intervention motion by
electric distribution cooperative that is a Basin Electric member, which raised the same concern).
51
See, e.g., Permian Basin Area Rate Cases, 390 U.S. 747, 821 (1968) (“It follows that the Commission
was here without authority to abrogate existing contract prices unless it first concluded that they ‘adversely
affect the public interest.”).

15

 The 60-day notice period is important for several reasons. It gives notice to customers, and
allows them time to react to proposed changes.52 And it permits the Commission time to evaluate
whether the rates are just and reasonable.53 That is not possible here since large components of
Tri-State’s filings remain missing.54 Accepting these incomplete filings and permitting them to
take effect via waiver, would deny other parties of the notice required by the Federal Power Act.55
In this situation, the full notice period is proving necessary in order simply to understand the full
scope of issues that have arisen as a result of Tri-State’s action to seek Commission-jurisdictional
status at all costs. A grant of Tri-State’s request for waiver would undermine these important
statutory purposes, and short-circuit the Commission’s and the parties’ ability to address the issues
Tri-State has raised.
Nor has Tri-State complied with the Commission Rule concerning an application for
waiver, which requires a showing of “(a) how and the extent to which the filing public utility and
purchaser(s) … would be affected if the notice requirement is not waived, and (b) the effects of
the waiver, if granted, upon purchasers under other rate schedules.”56 Tri-State’s request for waiver
only cites that rule while generically requesting “such other waivers as may be appropriate … to
allow for” Tri-State to get what it wants.57 And Tri-State makes only a cursory, unsupported

See Maine Pub. Svc. Co., 61 FERC ¶ 61,319 at 62,185 (1992) (denying waiver where the “only
rationale provided” was to “ensure that the customers do not use the 60-day notice period to avoid the
consequences of the rate schedule change”); Gulf States Utils. Co. v. FERC, 1 F.3d 288, 292-93 (5th Cir.
1993).
53
See Union Texas Prods. Corp. v. FERC, 899 F.2d 432, 433 (5th Cir. 1990) (explaining the similar
notice provisions of Section 4 of the Natural Gas Act).
54
See, e.g., United Power’s Motion to Intervene and Protest, Docket Nos. ER19-2444-000 and ER192444-001, at 3-6 (Aug. 13, 2019) [‘United Power Protest’]; id. at 5 & n.6 and Exhibit B (noting TriState’s failure to file all relevant Board Policies and enclosing several such policies in an exhibit).
55
NRG Power Marketing, LLC v. FERC, 862 F.3d. 108, 116 (D.C. Cir. 2017).
56
18 C.F.R. § 35.11.
57
See Tri-State September 3 Notice at 2-3 & n.4.
52

16

 statement that ratepayers will not be harmed.58 This is insufficient, particularly in light of the
numerous issues highlighted above.
TRI-STATE MAY BE REQUIRED TO PAY REFUNDS.
As outlined above, Tri-State has not taken the necessary steps to demonstrate that it is
subject to the jurisdiction of the Commission. However, if Tri-State is now a Commissionjurisdictional public utility, and the Commission denies its waiver request, Tri-State must pay
refunds. The Commission has a longstanding policy that applies when a public utility begins to
make jurisdictional sales based on an incorrect assumption that the Commission will approve its
waiver request. If waiver is denied, “the utility [must] refund to its customers the time value of the
revenues collected … for the entire period that the rate was collected without Commission
authorization.”59 After the Commission denies the waiver request and rejects the proposed tariffs,
refunds are appropriate for the entire period for which Tri-State was subject to the jurisdiction of
the Commission without an appropriate rate on file.
Presumably, in response to a Commission order rejecting the proposed tariffs, Tri-State
will seek to come into compliance with federal law and revert to its prior non-jurisdictional

58

See Tri-State September 3 Notice at 4-5. To the contrary, there may be customer problems caused by
granting Tri-State’s waiver request. LaPlata Electric Association urged the Commission to “thoroughly
investigate[] TriState’s filed WESCs,” Comments of LaPlata Electric Association, Inc. Docket No. Er192440-000 et al, at 12 (Aug. 23, 2019) [‘LaPlata Comments’], which includes its own wholesale electric
service contract with Tri-State, see Transmittal Letter in Docket No. ER19-2444-000 at 9. As the D.C.
Circuit has explained, whether it was “the intent of the parties” to agree on a particular effective date for
their jurisdictional contract is an important consideration in determining whether the advance notice
provisions of Section 205(d) should be waived. See City of Piqua, Ohio v. FERC, 610 F.2d 950, 954
(D.C. Cir. 1979). Not only do we not know on this record whether all of Tri-State’s WESC customers
have consented to an as-soon-as-possible effective date, we also do not know whether the parties or the
contracts themselves even contemplated FERC jurisdiction ever being a possibility, as the contracts were
executed more than ten years ago in light of Tri-State’s non-jurisdictional debt obligations. The WESCs
may not be appropriate jurisdictional contracts at all, let alone ones that should be given effect under
federal law without delay and without considering the intent and wishes of their counterparties.
59
Prior Notice and Filing Requirements under Part II of the Federal Power Act, 64 FERC ¶ 61,139 at
61,979-80 (1993), order on clarification, 65 FERC ¶ 61,081 (1993). See also Southern California Edison
Co., 116 FERC ¶ 61,287 at PP 19-20 (2006) (affirming prior decision re: prior notice and refunds).

17

 membership structure, or re-file a more complete set of rate filings. However, if Tri-State persists
in its current posture after the Commission rejects or dismisses the tariff filings here, further
refunds will be appropriate. The Commission has repeatedly made clear that making sales that are
subject to the jurisdiction of the Commission without a rate on file constitutes a serious violation
of the Federal Power Act. Such conduct leads to time-value refunds of the total revenues
collected.60 In addition, entities have been subject to Commission enforcement actions for such
conduct.61
Tri-State is likely to argue that such an outcome is overly harsh since it is merely continuing
to provide service under preexisting agreements with its member cooperatives. This Commission
has been clear, though, that the refund policy is not just designed to protect counterparties, but to
protect the Commission itself. The harm here is not to counterparties but to “the Commission’s
ability to perform its statutory mission.”62 Equally important, the consequences here are entirely
the result of Tri-State’s own actions. Tri-State could have chosen to receive Commission guidance
prior to admitting a new member, and it knows how to file a petition for a declaratory order at the
Commission.63 Alternatively, it could have arranged for the change in membership to take effect
upon approval of its tariffs by the Commission. Nothing required Tri-State to proceed in this
fashion and it should not expect the Commission to excuse its conduct.

60

Athens Energy LLC, 166 FERC ¶ 61,005 at P 14 (2019); Tucson Elec. Power Co., 157 FERC ¶ 61,027
at P 18 (2016) (“The Commission requires time value refunds to be calculated based on the total revenues
of the contract”).
61
See, e.g., American Transmission Co., 160 FERC ¶ 61,030 (2017); International Transmission Co. et
al, 146 FERC ¶ 61,172 (2014).
62
Tucson Elec. Power Co., 157 FERC ¶ 61,027 at P 8.
63
See Tri-State Generation and Transmission Association, Inc., 155 FERC ¶ 61,269 at P 1 (2016)
(denying petition for a declaratory order).

18

 CONCLUSION
The CoPUC appreciates the Commission’s close attention to the numerous issues raised in
these proceedings and requests that it reject the filings presented in the above-captioned dockets
and find Tri-State’s request for waiver of the full statutory notice period moot.
Respectfully submitted,
/s/ Suedeen G. Kelly
Suedeen G. Kelly
Max Minzner
JENNER & BLOCK LLP
1099 New York Avenue, NW
Suite 900
Washington, DC 20001-4412
(202) 637-6000
SKelly@jenner.com
MMinzner@jenner.com

Philip Weiser
Attorney General
Eric Olson
Solicitor General
Paul C. Gomez
First Assistant Attorney General
Office of the Attorney General
Ralph L. Carr Colorado Judicial Center
STATE OF COLORADO
1300 Broadway, 6th Floor
Denver, CO 80203
(720) 508-6166
paul.gomez@coag.gov

Counsel to the Colorado Public Utilities Commission

Dated: Sept. 12, 2019

19

 CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon each person
designated on the official service list compiled by the Secretary in these proceedings.

Dated: Sept. 12, 2019

By: /s/ Suedeen Kelly
Jenner & Block LLP

20