Tenth Circuit Court Upholds FERC’s Exit Fee Decisions

The U.S. Court of Appeals for the Tenth Circuit signaled an end to years of uncertainty and litigation over how exit fees are determined for distribution cooperatives, including Mountain Parks Electric, Inc. (MPE). The ruling on March 24 affirmed the Federal Energy Regulatory Commission (FERC) exit-fee framework for cooperatives withdrawing from wholesale contracts with Tri-State Generation and Transmission (Tri-State).  

Along with other distribution cooperatives, MPE has participated in various proceedings spanning multiple jurisdictions, as the outcome directly affects MPE’s financial interests. MPE and its partners have argued that exit fees should be transparent, predictable, and grounded in actual costs. Furthermore, exit fees should not jeopardize or subsidize Tri-State’s financial viability.

“This is a great step forward for our members,” said MPE CEO Virginia Harman. “We deeply appreciate the Tenth Circuit’s decision to recognize and affirm FERC’s excellent work on this issue. We would also like to thank our distribution cooperative partners for their tireless efforts in this
matter.” 

In January 2023, MPE voted to provide notice of withdrawal from Tri-State. When MPE completed its exit from Tri-State, effective February 1, 2025, the exit fee was handled under FERC’s Contract Termination Payment (CTP) tariff, as with the other distribution cooperatives exiting Tri-State.

“This has been a long battle that has saved MPE’s members from tens of millions of dollars of additional exit fee obligations,” Harman said. “We hope this decision pivots the industry to greater focus on the future.”