Kit Carson Electric Cooperative’s power supplier is planning to file a lawsuit in federal court, challenging an attempt by state regulators to investigate a proposed rate increase.
Lee Boughey, a spokesman for Denver-based Tri-State Generation and Transmission, confirmed that the wholesale power supplier’s board recently voted to move forward with litigation. Tri-State is expected to argue in court that it is beyond the jurisdiction of the New Mexico Public Regulation Commission (PRC), which controls utility rates in the state.
The PRC recently ordered a hearing to review a Tri-State rate increase that would have gone into effect Jan. 1.
Tri-State has avoided regulation while passing a series of rate increases since it began providing electricity to New Mexico co-ops a decade ago. Tri-State contends that it is involved in interstate commerce, meaning it is beyond the reach of state regulators under the commerce clause of the U.S. Constitution.
But recent actions at the state level have run counter to Tri-State’s assertions.
In October, Tri-State gave notice that it intended to raise rates by about 5 percent and implement a new rate structure. Tri-State said the changes would allow the association to recover growing costs while spreading expenses evenly across member co-ops.
But three New Mexico co-ops — including Kit Carson — protested the changes. Kit Carson argued the new rates were not justified and that the altered rate structure would penalize co-ops that have pushed for energy conservation.
The protests triggered a review by the PRC, which under state law has the authority to halt an increase and conduct an investigation into the validity of the proposed rates. Tri-State agreed to the terms of that law when it was allowed to merge with Kit Carson’s previous power supplier in 2000.
At the end of December, the PRC found that the protesting co-ops had raised valid concerns and regulators suspended the proposed increase. The PRC is now moving forward with a public hearing meant to determine if the new rates are reasonable. A pre-hearing conference in the case is scheduled Feb. 7.
Boughey with Tri-State has previously said that Tri-State reserved the right to challenge the terms of that law as well as any action of the PRC in court.
Tri-State provides power to 1.5 million people in New Mexico, Colorado, Nebraska and Wyoming. It is overseen by a 44-person board made up of representatives of each of the electric co-ops served by the association.
Boughey said this week that the decision to take the present rate issue to court is intended to “protect [Tri-State] member’s governance of their association.”