Published: June 18, 2024 |

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A Federal Energy Regulatory Commission Administrative Law Judge issued an initial decision finding that Basin Electric Cooperative failed to meet its obligation to assess cheaper alternatives when the utility spent tens of millions of dollars upgrading overpriced coal-fired power plants, passing the exorbitant costs onto its captive customers.

Basin Electric Cooperative is the largest rural cooperative in the United States. It serves rural customers in 9 states and remains heavily dependent on coal for its electricity generating needs.

In the absence of competitive pressure or regulatory oversight, Basin has spent its members money on costly and polluting generation resources without ever assessing whether cleaner alternatives would better serve customers interests. Instead, Basin blindly spent tens of millions of dollars on aging coal plants that were already uncompetitive in the energy market.

This initial decision makes significant strides forward in holding Basin accountable for its egregious disregard of customers interests: the decision finds that Basin was imprudent in failing to consider whether cleaner alternatives would lower customer costs. We will continue to engage to ensure that the final Commission order or a subsequent rate case will finally provide ratepayers relief for the recognized imprudent actions of Basin, said Kristin Henry, Managing Attorney for Sierra Club.

If adopted by the Commission, this decision would be precedential in finding that electric cooperatives like Basin are not exempt from accountability under the Federal Power Act, nor from the general regulatory principle that monopoly utilities must seek to minimize costs, examine feasible alternatives to reduce customer costs, and can be found imprudent. This includes rigorously considering the retirement of coal units when market trends or short-term economic performance signal a plant could be replaced, at less cost, by renewable generation.

Source: Energy Central

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