The Colorado Public Utilities Commission will hear a complaint filed by a coalition of large companies and electric cooperatives, including Empire Electric Association and La Plata Electric Association, against Tri-State Generation and Transmission Association's new rate structure.
The coalition filed the complaint earlier this month, claiming the association's new rate structure, which assesses charges by calculating a customer's average electricity usage rather than factoring use during peak-demand times, is unreasonable.
Tri-State has 20 days to respond, and it plans to file a motion to dismiss the claim on the grounds that Colorado does not have jurisdiction over the association's rates, said spokesman Lee Boughey in an email to The Durango Herald.
LPEA expected Tri-State to make this claim, said LPEA CEO Greg Munro, but the cooperative is still determining how it will respond to the motion.
Tri-State made this same argument when electricity cooperatives in New Mexico filed a similar complaint in November 2012 with the New Mexico Public Regulation Commission, which subsequently opened an rate-increase investigation.
Tri-State filed a federal lawsuit against the New Mexico PRC, stating the agency was outside its jurisdiction.
"None of the states in which Tri-State participates in interstate commerce have jurisdiction over the association's wholesale rates," Boughey said.
The association has 44 members in Colorado, Wyoming, Nebraska and New Mexico under wholesale contract, which requires the members to purchase at least 95 percent of their electricity from Tri-State at rates set by the association.
One of the coalition's allegations is that the new rate structure creates an unfair economic burden for customers who are encouraged to use electricity during off-peak hours, such as customers who use LPEA's time-of-use program. The program charged consumers a rate based on when they used electricity and encouraged off-peak use by charging a lower rate during that time period.
But the program is "virtually useless" under the new rate structure, said Jeff Berman, an LPEA board member, in a previous interview with the Herald.
Boughey said the new rate "lowers costs for residential and small business consumers" and "helps ensure large users of power pay their fair share for the power they use."
The structure went into effect Jan. 1, and since then, LPEA's time-of-use customers have seen about a 30 percent increase in their electricity bills, Munro said.
Residential consumers have seen about a 12 percent increase in their monthly bills and larger companies are seeing an 18 to 20 percent increase, Munro said.
Several companies, including BP, ExxonMobil Power and Gas Services Inc., and Encana Oil & Gas formed an alliance that joined the cooperatives in the complaint.
"We've gotten a lot of phone calls about (customers') bills and we're still working with them because it was such a shock to them," he said.
The rate increase hit customers especially hard because January and February were some of the coldest months the area has seen in several years, Munro said.
The cooperative offers payment plans, and it is working with customers who are unable to meet the increase.
The Colorado PUC set a hearing to review the complaint at 9 a.m. May 22 in Denver.