Basin Electric directors approve new board policy allowing some members to terminate their membership

Basin Electric’s bylaws allow for a member to terminate its membership in the cooperative as long as it has fulfilled all of its contractual obligations to Basin Electric. Because Basin Electric is a three-tier system, Basin Electric has its power sales contracts with its Class A members and the Class A members have their power sales contracts with their Class C members.

Since January, Basin Electric has received requests from eight members of Tri-State G&T Association to terminate their memberships in Basin Electric. Tri-State G&T is a Class A member of Basin Electric, headquartered in the Denver, Colorado, metro area. Basin Electric directors adopted a new board policy this month to address these requests.

Mark Foss, Basin Electric senior vice president and general counsel, said that because Class C members don’t have contracts with Basin Electric, the bylaws provide they are allowed to terminate their memberships subject to such reasonable terms and conditions as may be established by the Basin Electric board of directors. “Since this has never come up before, Board Policy No. 15 was created to establish the terms and conditions needed to allow these Class C members to terminate their memberships,” Foss said. “The new policy was adopted at the May meeting.”

Foss said Board Policy No. 15 separates Class C members into two groups — those that purchase power from a Class A member which purchases power from Basin Electric through a CROD (Contract Rate of Delivery) contract, which means they purchase a fixed amount hour-to-hour — and those who purchase from a Class A member that has an all-requirements with Basin Electric.

“With respect to those Class C members who purchase from a Class A member that buys from Basin Electric through a CROD contract, the policy allows them to terminate their membership so long as they are current in their obligations to both Basin Electric and the Class A,” Foss said. “On the other hand, those members that purchase from a Class A member that has an all-requirements contract with Basin Electric, and where Basin Electric is looking through the contract with the Class A member to the Class C member load, the new policy requires that the Class C member enter into a written agreement with Basin Electric pursuant to which it will agree it will honor its contract with its Class A.”

Following the adoption of the new board policy, directors approved allowing the following eight members, all of whom have their systems on the west side of the transmission system, to terminate their membership in Basin Electric: Roosevelt Public Power District of Scottsbluff, Nebraska; Wyrulec Company of Torrington, Wyoming; San Louis Valley Rural Electric Cooperative of Monte Vista, Colorado; Gunnison County Electric Cooperative Association, Inc. of Gunnison, Colorado; Sangre de Cristo Electric Association, Inc. of Buena Vista, Colorado; Sierra Electric Cooperative of Elephant Butte, New Mexico; Northern Rio Arriba Electric Cooperative, Inc. of Chama, New Mexico; and Springer Electric Cooperative, Inc. of Springer, New Mexico. As a result of dropping their memberships, these cooperatives will no longer have a vote at the Basin Electric annual meeting. Basin Electric sells power to Tri-State on the west side of the transmission system pursuant to a CROD contract. Basin Electric’s sales to Tri-State on the east side of the transmission system are on an all-requirements basis.

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Basin Electric directors approve new board policy allowing some members to terminate membership