Courts uphold wholesale power contracts among electric cooperatives
Courts in South Carolina and South Dakota have recently recognized the validity of term provisions in wholesale power contracts between generation and transmission cooperatives and their member distribution cooperatives.
In late 2020, two distribution cooperatives—Dakota Energy Cooperative, Inc. and Marlboro Electric Cooperative, Inc.—each sued their generation and transmission cooperatives (G&Ts)—East River Electric Power Cooperative, Inc. and Central Electric Power Cooperative, Inc., respectively—seeking to terminate and buy out of their wholesale power contracts (WPCs) prior to the end of the term. East River and Central removed the lawsuits to federal court pursuant to the federal officer removal statute, 28 U.S.C. § 1442(a)(1). (Following removal, Basin Electric Power Cooperative was permitted to intervene in the Dakota lawsuit. Basin is a “super G&T” that sells power to East River and other member G&Ts.)
