The La Junta City Council, meeting on Tuesday evening, heard a report from Arkansas River Power Authority General Manager Rick Rigel regarding a proposal from Tri-State Generation and Transmission Association to acquire ARPA. He said he thought council might have some questions about the proposed deal, and indeed they did. He wanted to know what their concerns were, and if ARPA and Tri-State could “fix” them.

“Tri-State will basically step into ARPA’s shoes and, really, ARPA would dissolve, once the contract was complete," said Rigel.

"We would assign all our power contracts over to Tri-State and they would recuse all of our debt, but we don’t get out of paying that debt. We still will reimburse Tri-State over the term of the contract through a fixed-cost monthly discharge, so the rate with Tri-State would be the Class A member rate, plus a fixed cost.

"They are, in their projections of this rate, pretty steady over the period of time, at least through 2035.”

“So, they’re really refinancing that debt over a period of time, sort of like refinancing your house," said Mayor Jeffri Pruyn. "They tell you your payments go down, but you’re paying over a longer period of time.”

“Yes,” said Rigel. “Now, we did the calculation of what we would pay back in that fixed cost versus our debt service, and there is a little bit of a saving. There’s about $229 million if ARPA goes it alone, and $225 million through Tri-State. They get a little better rate, they have a little better credit rating.”

Rigel went on to say that La Junta's share of the Western Area Power Administration allocation would go back to La Junta, a very valuable asset.

“We would also divide up the distribution of assets," he said.

They adjusted value to the assets. La Junta doesn’t have any assets, so La Junta assets would be cash only: about $3 million to $3.8 million. Holly, Lamar and Trinidad have assets (transmission sites and a wind turbine).

The members and owners of ARPA are Holly, Lamar, La Junta, Las Animas, Springfield and Trinidad.

The history of the organization includes an attempt at repowering a natural gas plant in Lamar to clean-burning coal, a venture that never passed Environmental Protection Agency standards.

A lawsuit against the engineering firm resulted in some payback, and some relief from debt was secured by additional financial maneuvering by Rigel, resulting in a lower debt service payment.

The offer received from Tri-State was obtained through a Request for Proposal, at the request of the City of La Junta. Rigel said confidentiality agreements prevent him from revealing the names of the other companies that responded, and he also said he cannot reveal the financial aspects of those proposals.

Pruyn requested again the details of those proposals, to be used for comparison with the Tri-State proposal.

Asked by Councilman Ed Vela if La Junta is the only hold-out from the Tri-State proposal, Rigel said, “I think so.”

He also said the city can take its time considering the proposal. Council members said previously that one reason they were cautious is the speed with which the Tri-State proposal was presented for action.

The matter was taken under consideration again, but no decision was made at Tuesday night’s meeting.