Tri-State Generation & Transmission Association 10-Q 4 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Mar. 31, 2018shares
Document and Entity Information
Entity Registrant Name	Tri-State Generation & Transmission Association, Inc.
Entity Central Index Key	1,637,880
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018
Entity Common Stock, Shares Outstanding	0

Consolidated Statements of Fina

Consolidated Statements of Financial Position - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Electric Plant
In service	$ 5,824,076	$ 5,802,844
Construction work in progress	184,278	175,567
Total electric plant	6,008,354	5,978,411
Less allowances for depreciation and amortization	(2,435,466)	(2,409,020)
Net electric plant	3,572,888	3,569,391
Other plant	295,022	283,546
Less allowances for depreciation, amortization, and depletion	(107,025)	(105,660)
Net other plant	187,997	177,886
Total property, plant and equipment	3,760,885	3,747,277
Other assets and investments
Investment in other associations	144,632	143,608
Investments in and advances to coal mines	18,292	18,274
Restricted cash and investments	6,066	5,979
Intangible assets, net of accumulated amortization	9,155	10,986
Other noncurrent assets	9,521	9,604
Total other assets and investments	187,666	188,451
Current assets
Cash and cash equivalents	116,617	143,694
Restricted cash and investments	1,308	1,292
Deposits and advances	36,593	27,881
Accounts receivable—Members	94,151	102,035
Other accounts receivable	24,592	16,034
Coal inventory	62,803	46,849
Materials and supplies	90,285	89,459
Total current assets	426,349	427,244
Deferred charges
Regulatory assets	449,204	454,523
Prepayment—NRECA Retirement Security Plan	36,164	37,607
Other	40,836	38,492
Total deferred charges	526,204	530,622
Total assets	4,901,104	4,893,594
Capitalization
Patronage capital equity	1,011,114	1,003,020
Accumulated other comprehensive income (loss)	(389)	(210)
Noncontrolling interest	109,234	111,295
Total equity	1,119,959	1,114,105
Long-term debt	3,082,769	3,120,286
Total capitalization	4,202,728	4,234,391
Current liabilities
Member advances	6,804	8,447
Accounts payable	95,353	117,510
Short-term borrowing	189,335	144,667
Accrued expenses	26,901	32,484
Current asset retirement obligation	2,999	3,087
Accrued interest	34,755	32,852
Accrued property taxes	26,246	27,137
Current maturities of long-term debt	97,929	78,004
Total current liabilities	480,322	444,188
Deferred credits and other liabilities
Regulatory liabilities	85,815	81,824
Deferred income tax liability	17,205	17,205
Asset retirement obligations	53,817	53,768
Other	52,275	53,396
Total deferred credits and other liabilities	209,112	206,193
Accumulated postretirement benefit and postemployment obligations	8,942	8,822
Total equity and liabilities	$ 4,901,104	$ 4,893,594

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating Revenues
Other	$ 12,300	$ 20,856
Total revenues	318,508	338,429
Operating expenses
Purchased power	83,458	76,419
Fuel	51,940	60,813
Production	50,795	49,561
Transmission	40,064	33,800
General and administrative	7,728	7,180
Depreciation, amortization, and depletion	40,088	46,672
Coal mining		8,176
Other	4,136	4,790
Operating expenses	278,209	287,411
Operating margins	40,299	51,018
Other income (expense)
Interest	1,203	1,085
Capital credits from cooperatives	4,055	4,246
Membership withdrawal		2,500
Other, net	1,204	1,020
Total other income	6,462	8,851
Interest expense, net of amounts capitalized	38,021	36,349
Income tax benefit	(151)	(302)
Net margins including noncontrolling interest	8,891	23,822
Net income attributable to noncontrolling interest	(797)	(296)
Net margins attributable to the Association	8,094	23,526
Member electric sales
Operating Revenues
Operating revenue	289,346	282,415
Non-member electric sales
Operating Revenues
Operating revenue	$ 16,862	$ 35,158

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Consolidated Statements of Comprehensive Income
Net margins including noncontrolling interest	$ 8,891	$ 23,822
Other comprehensive income (loss):
Unrealized gain on securities available for sale		24
Reclassification of unrealized gain on securities available for sale included in net income	(159)
Amortization of actuarial gain on postretirement benefit obligation included in net income	(20)	(20)
Other comprehensive income (loss)	(179)	4
Comprehensive income including noncontrolling interest	8,712	23,826
Net comprehensive income attributable to noncontrolling interest	(797)	(296)
Comprehensive income attributable to the Association	$ 7,915	$ 23,530

Consolidated Statements of Equi

Consolidated Statements of Equity - USD ($) $ in Thousands	Patronage capital	Accumulated other comprehensive income (loss)	Noncontrolling interest	Total
Equity at beginning of year at Dec. 31, 2016	$ 961,364	$ (286)	$ 109,147
Change in Equity
Net margins attributable to the Association	23,526			$ 23,526
Unrealized gain on securities available for sale		24
Reclassification adjustment for actuarial gain on postretirement benefit obligation included in net income		(20)
Net comprehensive income (loss) attributable to noncontrolling interest			296	296
Equity at end of year at Mar. 31, 2017	984,890	(282)	109,443	1,094,051
Equity at beginning of year at Dec. 31, 2017	1,003,020	(210)	111,295	1,114,105
Change in Equity
Net margins attributable to the Association	8,094			8,094
Reclassification adjustment for unrealized gain on securities available for sale included in net income		(159)
Reclassification adjustment for actuarial gain on postretirement benefit obligation included in net income		(20)
Net comprehensive income (loss) attributable to noncontrolling interest			797	797
Equity distribution to noncontrolling interest			(2,858)
Equity at end of year at Mar. 31, 2018	$ 1,011,114	$ (389)	$ 109,234	$ 1,119,959

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net margins including noncontrolling interest	$ 8,891	$ 23,822
Adjustments to reconcile net margins to net cash provided by operating activities:
Depreciation, amortization, and depletion	40,088	46,672
Amortization of intangible asset	1,831	1,831
Amortization of NRECA Retirement Security Plan prepayment	1,343	1,343
Amortization of debt issuance costs	514	527
Recognition of deferred membership withdrawal income		(2,500)
Recognition of deferred revenue		(7,500)
Capital credit allocations from cooperatives and income from coal mines over refund distributions	(1,105)	(1,199)
Changes in operating assets and liabilities:
Accounts receivable	677	4,195
Coal inventory	(15,954)	3,394
Materials and supplies	(826)	1,439
Accounts payable and accrued expenses	(14,708)	(10,732)
Accrued interest	1,902	16,775
Accrued property taxes	(891)	(1,053)
Other deferred credits - TEP transmission settlement		(15,521)
Other	(7,782)	(12,656)
Net cash provided by operating activities	13,980	48,837
Investing activities
Purchases of plant	(56,999)	(32,628)
Changes in deferred charges	1,003	1,707
Proceeds from other investments	64	61
Net cash used in investing activities	(55,932)	(30,860)
Financing activities
Changes in Member advances	(4,230)	(5,611)
Payments of long-term debt	(17,738)	(48,502)
Increase in short-term borrowings, net	44,668	5,580
Retirement of patronage capital	(4,852)	(3,023)
Equity distribution to noncontrolling interest	(2,858)
Other	(12)	304
Net cash provided by (used in) financing activities	14,978	(51,252)
Net increase (decrease) in cash, cash equivalents and restricted cash and investments	(26,974)	(33,275)
Cash, cash equivalents and restricted cash and investments – beginning	150,965	167,890
Cash, cash equivalents and restricted cash and investments – ending	123,991	134,615
Supplemental cash flow information:
Cash paid for interest	37,963	23,016
Supplemental disclosure of noncash investing and financing activities:
Change in plant expenditures included in accounts payable	$ (739)	$ (3,916)

PRESENTATION OF FINANCIAL INFOR

PRESENTATION OF FINANCIAL INFORMATION	3 Months Ended
	Mar. 31, 2018
PRESENTATION OF FINANCIAL INFORMATION
PRESENTATION OF FINANCIAL INFORMATION	NOTE 1 – PRESENTATION OF FINANCIAL INFORMATION The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Our consolidated financial position as of March 31, 2018, results of operations for the three months ended March 31, 2018 and 2017, and cash flows for the three months ended March 31, 2018 and 2017 are not necessarily indicative of the results that may be expected for an entire year or any other period. Basis of Consolidation Our consolidated financial statements include the accounts of Tri-State Generation and Transmission Association, Inc. (“Tri-State”, “we”, “our”, “us” or “the Association”), our wholly-owned and majority-owned subsidiaries, and certain variable interest entities for which we or our subsidiaries are the primary beneficiaries. See Note 16 – Variable Interest Entities. Our consolidated financial statements also include our undivided interests in jointly owned facilities. All significant intercompany balances and transactions have been eliminated in consolidation. Jointly Owned Facilities We own undivided interests in two jointly owned generation facilities that are operated by the operating agent of each facility under joint facility ownership agreements with other utilities as tenants in common. These projects include the Yampa Project (operated by us) and the Missouri Basin Power Project (“MBPP”) (operated by Basin Electric Power Cooperative (“Basin”)). Our ownership in the San Juan Project terminated December 31, 2017. Each participant in these agreements receives a portion of the total output of the generation facilities, which approximates its percentage ownership. Each participant provides its own financing for its share of each facility and accounts for its share of the cost of each facility. The operating agent for each of these projects allocates the fuel and operating expenses to each participant based upon its share of the use of the facility. Therefore, our share of the plant asset cost, interest, depreciation and other operating expenses is included in our consolidated financial statements. Our share in each jointly owned facility is as follows as of March 31, 2018 (dollars in thousands): Electric Construction Tri-State Plant in Accumulated Work In Share Service Depreciation Progress Yampa Project - Craig Generating Station Units 1 and 2 24.00 % $ 396,546 $ 239,218 $ 4,864 MBPP - Laramie River Station 24.13 % 410,174 296,183 33,008 Total $ 806,720 $ 535,401 $ 37,872 Reclassifications Certain reclassifications have been made to our prior year financial statements to conform to the 2018 presentation. Accounting Pronouncements-Recently Adopted We adopted Accounting Standards Update (“ASU”) 2016‑01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , as of January 1, 2018. This amendment requires an entity to measure investments in equity securities (except those accounted for under the equity method, those that result in consolidation of the investee and certain other investments) at fair value and recognize changes in fair value in net income. However, for equity investments that don’t have readily determinable fair values and don’t qualify for the existing practical expedient in Accounting Standards Codification (“ASC”) 820, Fair Value Measurements , to estimate fair value using the net asset per share of the investment, the amendment provides a new measurement alternative. Entities may choose to measure those investments at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Our investments in other associations do not have readily determinable fair values and we have utilized the measurement alternative provided by this amendment. As such, the adoption of ASU 2016-01 did not have an impact on our accounting for investments in other associations. We account for our investment in Trapper Mining, Inc. (“Trapper Mining”) using the equity method. Therefore, this investment is not subject to the fair value measurement requirements of ASU 2016-01. We adopted ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, as of January 1, 2018. This amendment disaggregates the accounting for the service cost component of the net periodic benefit cost of an entity’s defined pension and other postretirement benefit plans from the other components of the net periodic benefit cost (such as interest expense, recognition of actuarial gain or loss on postretirement benefit obligations and amortization of prior service cost or credit). The service cost component is to be included in the same income statement line item(s) as other compensation costs arising from services rendered during the period. The other components of the net periodic benefit cost are to be included separately from the line item(s) that include service cost and outside of any subtotal of operating income, if one is presented. The adoption of this amendment did not have a material impact on our consolidated statements of operations. We adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), as of January 1, 2018. This amendment provides a revenue recognition model where revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new revenue recognition standard also requires enhanced quantitative and qualitative disclosures to enable users of financial information to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09 using the modified retrospective transition method where prior year results are not restated; however, a cumulative-effect adjustment, if any, is required to be recognized in patronage capital equity at the date of adoption (January 1, 2018). Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. Completed contracts that begin and end in the same annual reporting period are not restated. The standard was applied to contracts that were not complete at the date of initial application. For contracts that were modified before the beginning of the earliest reporting period presented, we have not retrospectively restated the contract for those modifications. There was no impact on our consolidated statements of operations as a result of adopting this amendment. Accounting Pronouncements-Not Yet Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) . Topic 842 supersedes the lease recognition requirements in ASC 840, Leases. Under Topic 842, a lessee is required to recognize lease assets (right-of-use assets) and lease liabilities on the balance sheet for most leases and provide enhanced qualitative and quantitative disclosures. The right-of-use asset represents a lessee’s right to use (control the use of) the underlying asset for the lease term. The lease liability represents a lessee’s obligation to make lease payments. The right-of-use asset and the lease liability are initially measured at the present value of the lease payments over the lease term. For finance leases, the lessee subsequently recognizes interest expense and amortization of the right-of-use asset, similar to accounting for capital leases under Topic 840. For operating leases, the lessee subsequently recognizes straight-line lease expense over the life of the lease, similar to accounting for operating leases under Topic 840. Lessor accounting remains substantially the same as that applied under Topic 840. Topic 842 includes an accounting policy election by class of underlying asset to exclude short-term leases. A short-term lease is defined as a lease that, at commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. This amendment is required to be applied using a modified retrospective transition method with the option to elect a package of practical expedients which includes not being required to reassess expired or existing contracts that were assessed under Topic 840, the lease classification for any expired or existing leases that were assessed under Topic 840, and accounting for the initial direct costs for any existing leases. We are currently evaluating the impact of Topic 842 on our consolidated financial statements. This evaluation process includes establishing a lease project working group, identifying and reviewing our leases, performing a completeness assessment of the lease population, analyzing the Topic 842 practical expedients and selecting a lease software solution. We plan to adopt ASU 2016-02 beginning in the first quarter of 2019 and anticipate that the adoption of the amendment may have a significant impact on our consolidated statements of financial position as all leases will be recognized as right-of-use assets and lease obligations. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842)-Land Easement Practical Expedient for Transition to Topic 842. This amendment permits an entity to elect an optional transition practical expedient to not evaluate, under Topic 842, land easements that exist or that expired before the entity’s adoption of Topic 842. Once an entity adopts Topic 842, the new guidance should be applied prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. We expect to adopt this optional transition practical expedient upon adoption of ASU 2016-02.

ACCOUNTING FOR RATE REGULATION

ACCOUNTING FOR RATE REGULATION	3 Months Ended
	Mar. 31, 2018
ACCOUNTING FOR RATE REGULATION
ACCOUNTING FOR RATE REGULATION	NOTE 2 – ACCOUNTING FOR RATE REGULATION We are subject to the accounting requirements related to regulated operations. In accordance with these accounting requirements, some revenues and expenses have been deferred at the discretion of our Board of Directors (“Board”), which has budgetary and rate-setting authority, if it is probable that these amounts will be refunded or recovered through future rates. Regulatory assets are costs that we expect to recover from our member distribution systems (“Members”) based on rates approved by our Board in accordance with our rate policy. Regulatory liabilities represent probable future reductions in rates associated with amounts that are expected to be refunded to our Members based on rates approved by our Board in accordance with our rate policy. We recognize regulatory assets as expenses and regulatory liabilities as operating revenue, other income, or a reduction in expense concurrent with their recovery in rates. Regulatory assets and liabilities are as follows (dollars in thousands): March 31, December 31, 2018 2017 Regulatory assets Deferred income tax expense (1) $ 17,205 $ 17,205 Deferred prepaid lease expense – Craig Unit 3 Lease (2) 1,618 3,237 Deferred prepaid lease expense – Springerville Unit 3 Lease (3) 87,723 88,296 Goodwill – J.M. Shafer (4) 54,131 54,843 Goodwill – Colowyo Coal (5) 39,002 39,261 Deferred debt prepayment transaction costs (6) 156,031 158,187 Deferred Holcomb expansion impairment loss (7) 93,494 93,494 Total regulatory assets 449,204 454,523 Regulatory liabilities Interest rate swap - unrealized gain (8) 8,357 4,311 Interest rate swap - realized gain (9) 4,559 4,614 Deferred revenues (10) 30,327 30,327 Membership withdrawal (11) 42,572 42,572 Total regulatory liabilities 85,815 81,824 Net regulatory asset $ 363,389 $ 372,699 (1) A regulatory asset or liability associated with deferred income taxes generally represents the future increase or decrease in income taxes payable that will be received or settled through future rate revenues. (2) Represents deferral of the loss on acquisition related to the Craig Generating Station Unit 3 prepaid lease expense upon acquisitions of equity interests in 2002 and 2006. The regulatory asset for the deferred prepaid lease expense was being amortized to depreciation, amortization and depletion expense in the amount of $6.5 million annually through December 31, 2017, and $1.6 million for the three month period ending March 31, 2018, and recovered from our Members in rates. The remaining $1.6 million will be recognized as depreciation, amortization and depletion expense for the three month period ending June 30, 2018, and recovered from our Members in rates. (3) Represents deferral of the loss on acquisition related to the Springerville Generating Station Unit 3 (“Springerville Unit 3”) prepaid lease expense upon acquiring a controlling interest in the Springerville Unit 3 Partnership LP (“Springerville Partnership”) in 2009. The regulatory asset for the deferred prepaid lease expense is being amortized to depreciation, amortization and depletion expense in the amount of $2.3 million annually through the 47-year period ending in 2056 and recovered from our Members in rates. (4) Represents goodwill related to our acquisition of Thermo Cogeneration Partnership, LP in December 2011. Goodwill is being amortized to depreciation, amortization and depletion expense in the amount of $2.8 million annually through the 25-year period ending in 2036 and recovered from our Members in rates. (5) Represents goodwill related to our acquisition of Colowyo Coal Company LP (“Colowyo Coal”) in December 2011. Goodwill is being amortized to depreciation, amortization and depletion expense in the amount of $1.0 million annually through the 44-year period ending in 2056 and recovered from our Members in rates. (6) Represents transaction costs that we incurred related to the prepayment of our long-term debt in 2014. These costs are being amortized to depreciation, amortization and depletion expense in the amount of $8.6 million annually over the 21.4-year average life of the new debt issued and recovered from our Members in rates. (7) Represents deferral of the impairment loss related to development costs, including costs for the option to purchase development rights for the expansion of the Holcomb Generating Station. The plan for the recovery from our Members in rates has not been determined by our Board. Once the plan for recovery is determined, the deferred impairment loss will be recognized in other operating expenses. (8) Represents deferral of an unrealized gain related to the change in fair value of a forward starting interest rate swap that was entered into in 2016 in order to hedge interest rates on anticipated future borrowings. Upon settlement of this interest rate swap, the realized gain or loss will be deferred and subsequently recognized as interest expense when amortized over the term of the associated long-term debt borrowing. See Note 8 – Long-Term Debt and Note 15 – Fair Value. (9) Represents deferral of a realized gain of $4.6 million related to the October 2017 settlement of a forward starting interest rate swap that was entered into in 2016. This realized gain was deferred as a regulatory liability and is being amortized to interest expense over the 12-year term of the First Mortgage Obligations, Series 2017A. See Note 8 – Long-Term Debt. (10) Represents deferral of the recognition of non-member electric sales revenues. These deferred non-member electric sales revenues will be refunded to Members through reduced rates when recognized in non-member electric sales revenue in future periods. (11) Represents the deferral of the recognition of other income recorded in connection with the withdrawal of a former Member from membership in us. This deferred membership withdrawal income will be refunded to Members through reduced rates when recognized in other income in future periods.

INVESTMENTS IN OTHER ASSOCIATIO

INVESTMENTS IN OTHER ASSOCIATIONS	3 Months Ended
	Mar. 31, 2018
INVESTMENTS IN OTHER ASSOCIATIONS
INVESTMENTS IN OTHER ASSOCIATIONS	NOTE 3 – INVESTMENTS IN OTHER ASSOCIATIONS Investments in other associations include investments in the patronage capital of other cooperatives and other required investments in the organizations. Our investment in a cooperative increases when a cooperative allocates patronage capital credits to us and it decreases when we receive a cash retirement of the allocated capital credits from the cooperative. A cooperative allocates its patronage capital credits to us based upon our patronage (amount of business done) with the cooperative. Investments in other associations are as follows (dollars in thousands): March 31, December 31, 2018 2017 Basin Electric Power Cooperative $ 101,820 $ 101,820 National Rural Utilities Cooperative Finance Corporation - patronage capital 11,232 11,232 National Rural Utilities Cooperative Finance Corporation - capital term certificates 16,021 16,085 CoBank, ACB 9,062 8,174 Western Fuels Association, Inc. 2,336 2,346 Other 4,161 3,951 Investments in other associations $ 144,632 $ 143,608 Patronage capital represents retained margins in a cooperative which is the equity in that cooperative. Therefore, the investments in the patronage capital of other cooperatives and other required investments in the organizations meet the definition of an equity security, as defined by the accounting requirements related to investments in equity securities. However, these investments don’t have readily determinable fair values (defined as observable price changes of identical or similar investments, such as in an organized market). Therefore, we measure these investments at cost less impairment. We have evaluated our investments in the patronage capital of other cooperatives and other required investments in the organizations for indicators of impairment. There were no impairments of these investments recognized for the three months ended March 31, 2018 and the comparable period in 2017.

INVESTMENTS IN AND ADVANCES TO

INVESTMENTS IN AND ADVANCES TO COAL MINES	3 Months Ended
	Mar. 31, 2018
INVESTMENTS IN AND ADVANCES TO COAL MINES
INVESTMENTS IN AND ADVANCES TO COAL MINES	NOTE 4 – INVESTMENTS IN AND ADVANCES TO COAL MINES We have direct ownership and investments in coal mines to support our coal generating resources. We, and certain participants in the Yampa Project, are members of Trapper Mining, which is organized as a cooperative and is the owner and operator of the Trapper Mine near Craig, Colorado. Our investment in Trapper Mining is recorded using the equity method. In addition, we have ownership in Western Fuels Association, Inc. (“WFA”), which is an owner of Western Fuels‑Wyoming, Inc. (“WFW”), the owner and operator of the Dry Fork Mine near Gillette, Wyoming. Dry Fork Mine provides coal to MBPP, which is the owner of Laramie River Generating Station. We, through our undivided interest in the jointly owned facility MBPP, advance funds to the Dry Fork Mine. Investments in and advances to coal mines are as follows (dollars in thousands): March 31, December 31, 2018 2017 Investment in Trapper Mine $ 15,131 $ 14,998 Advances to Dry Fork Mine 3,161 3,276 Investments in and advances to coal mines $ 18,292 $ 18,274

CASH, CASH EQUIVALENTS AND REST

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS	3 Months Ended
	Mar. 31, 2018
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS	NOTE 5 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS We consider highly liquid investments with an original maturity of three months or less to be cash equivalents. The fair value of cash equivalents approximates their carrying values due to their short-term maturity. Restricted cash and investments represent funds designated by our Board for specific uses and funds restricted by contract or other legal reasons. A portion of the funds are funds that have been restricted by contract that are expected to be settled within one year. These funds are therefore classified as current on our consolidated statements of financial position. The other funds are for funds restricted by contract or other legal reasons that are expected to be settled beyond one year. These funds are classified as noncurrent and are included in other assets and investments on our consolidated statements of financial position. The following table provides a reconciliation of cash, cash equivalents and restricted cash and investments reported within our consolidated statements of financial position that sum to the total of the same such amount shown in our consolidated statements of cash flows (dollars in thousands): March 31, December 31, 2018 2017 Cash and cash equivalents $ 116,617 $ 143,694 Restricted cash and investments - current 1,308 1,292 Restricted cash and investments - noncurrent 6,066 5,979 Cash, cash equivalents and restricted cash and investments $ 123,991 $ 150,965

CONTRACT ASSETS AND CONTRACT LI

CONTRACT ASSETS AND CONTRACT LIABILITIES	3 Months Ended
	Mar. 31, 2018
CONTRACT ASSETS AND CONTRACT LIABILITIES
CONTRACT ASSETS AND CONTRACT LIABILITIES	NOTE 6 – CONTRACT ASSETS AND CONTRACT LIABILITIES Contract Assets A contract asset represents an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). We have no contract assets as of March 31, 2018. Accounts Receivable We record accounts receivable for our unconditional rights to consideration arising from our performance under contracts with our Members and other parties. Uncollectible amounts, if any, are identified on a specific basis and charged to expense in the period determined to be uncollectible. See Note 13 – Revenue. Contract liabilities (unearned revenue) A contract liability represents an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. We have received deposits from others and these deposits are reflected in unearned revenue (included in other deferred credits and other liabilities on our consolidated statements of financial position) before revenue is recognized, resulting in contract liabilities. During the three months ended March 31, 2018, we recognized $0.2 million of this unearned revenue in other operating revenues on our consolidated statements of operations. Our contract assets and liabilities consist of the following (dollars in thousands): March 31, December 31, 2018 2017 Accounts receivable - Members $ 94,151 $ 102,035 Other accounts receivable - trade: Non-member electric sales 6,061 5,493 Coal sales — 1,446 Other 8,424 6,634 Other accounts receivable - trade 14,485 13,573 Other accounts receivable - nontrade 10,107 2,461 Total other accounts receivable $ 24,592 $ 16,034 Contract liabilities (unearned revenue) $ 7,366 $ 7,567

OTHER DEFERRED CHARGES

OTHER DEFERRED CHARGES	3 Months Ended
	Mar. 31, 2018
OTHER DEFERRED CHARGES.
OTHER DEFERRED CHARGES	NOTE 7 – OTHER DEFERRED CHARGES We make expenditures for preliminary surveys and investigations for the purpose of determining the feasibility of contemplated generation and transmission projects. If construction results, the preliminary survey and investigation expenditures will be reclassified to electric plant ‑ construction work in progress. If the work is abandoned, the related preliminary survey and investigation expenditures will be charged to the appropriate operating expense account or the expense could be deferred as a regulatory asset to be recovered from our Members in rates subject to approval by our Board, which has budgetary and rate-setting authority. We make advance payments to the operating agents of jointly owned facilities to fund our share of costs expected to be incurred under each project including MBPP – Laramie River Station, and Yampa Project – Craig Generating Station Units 1 and 2. We also make advance payments to the operating agent of Springerville Unit 3. During 2016, we entered into two forward starting interest rate swaps to hedge a portion of our future long-term debt interest rate exposure. One of these interest rate swaps was settled in October 2017. The realized gain of $4.6 million related to the settlement of this interest rate swap was deferred as a regulatory liability in accordance with the accounting requirements related to regulated operations. This realized gain is being amortized to interest expense over the 12-year term of the associated private placement debt issuance. The unrealized gain of $8.4 and $4.3 million as of March 31, 2018 and December 31, 2017, respectively, on the remaining interest rate swap was deferred in accordance with the accounting requirements related to regulated operations. See Note 2 – Accounting for Rate Regulation. Other deferred charges are as follows (dollars in thousands): March 31, December 31, 2018 2017 Preliminary surveys and investigations $ 20,403 $ 19,737 Advances to operating agents of jointly owned facilities 9,938 10,740 Interest rate swaps 8,357 4,311 Other 2,138 3,704 Total other deferred charges $ 40,836 $ 38,492

LONG-TERM DEBT

LONG-TERM DEBT	3 Months Ended
	Mar. 31, 2018
LONG-TERM DEBT.
LONG-TERM DEBT	NOTE 8 – LONG-TERM DEBT The mortgage notes payable and pollution control revenue bonds are secured on a parity basis by a Master First Mortgage Indenture, Deed of Trust and Security Agreement (“Master Indenture”) except for two unsecured notes in the aggregate amount of $39.7 million as of March 31, 2018. Substantially all our assets, rents, revenues and margins are pledged as collateral. The Springerville certificates are secured by the assets of Springerville Unit 3. All long-term debt contains certain restrictive financial covenants, including a debt service ratio requirement and equity to capitalization ratio requirement. As of March 31, 2018, we had a secured revolving credit facility with Bank of America, N.A. and CoBank, ACB as Joint Lead Arrangers in the amount of $750 million (“2011 Revolving Credit Agreement”) extending through July 26, 2019. We had no outstanding borrowings at March 31, 2018 and no outstanding borrowings at December 31, 2017. As of March 31, 2018, we had $560.0 million in availability (including $310.0 million under the commercial paper back-up sublimit) under the 2011 Revolving Credit Agreement. On April 25, 2018, the 2011 Revolving Credit Agreement was terminated and replaced by a new secured revolving credit facility with National Rural Utilities Cooperative Finance Corporation, as lead arranger and administrative agent, in the amount of $650 million (“2018 Revolving Credit Agreement”). The 2018 Revolving Credit Agreement has a maturity date of April 25, 2023, unless extended as provided therein. On November 16, 2017, we entered into a Note Purchase Agreement with a group of institutional investors to sell our First Mortgage Obligations, Series 2017A in an aggregate principal amount of $120 million, consisting of $60 million of our 3.34 percent First Mortgage Obligations, Series 2017A Notes, Tranche 1, due December 12, 2029, and $60 million of our 3.39 percent First Mortgage Obligations, Series 2017A Notes, Tranche 2, due December 12, 2029 in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The closing of the sale of the Series 2017A Notes, Tranche 1 occurred on December 12, 2017 and the closing of the sale of the Series 2017A Notes, Tranche 2 occurred on April 12, 2018. Long-term debt consists of the following (dollars in thousands): March 31, December 31, 2018 2017 Total debt $ 3,193,682 $ 3,211,421 Less debt issuance costs (21,217) (21,720) Less debt discounts (10,306) (10,360) Plus debt premiums 18,539 18,949 Total debt adjusted for debt issuance costs, discounts and premiums 3,180,698 3,198,290 Less current maturities (97,929) (78,004) Long-term debt $ 3,082,769 $ 3,120,286 We are exposed to certain risks in the normal course of operations in providing a reliable and affordable source of wholesale electricity to our Members. These risks include interest rate risk, which represents the risk of increased operating expenses and higher rates due to increases in interest rates related to anticipated future long-term borrowings. To manage this exposure, we have entered into forward starting interest rate swaps to hedge a portion of our future long‑term debt interest rate exposure. On October 12, 2017, in conjunction with the pricing on the offering of the First Mortgage Obligations, Series 2017A, we settled the interest rate swap entered into in 2016, which resulted in a realized gain of $4.6 million that has been deferred as a regulatory liability and is being amortized to interest expense over the 12-year term of the First Mortgage Obligations, Series 2017A. We anticipate settling the remaining interest rate swap in conjunction with the issuance of future long-term debt. See Note 2 ‑ Accounting for Rate Regulation and Note 15 ‑ Fair Value. The terms of the remaining interest rate swap contract are as follows (dollars in thousands): Notional Fixed Benchmark Interest Effective Maturity Amount Rate (Pay) Rate (Receive) Date Date Interest rate swap $ 80,000 2.304 % 30 year - LIBOR June 2019 June 2049

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS	3 Months Ended
	Mar. 31, 2018
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS	NOTE 9 – SHORT-TERM BORROWINGS We have a commercial paper program under which we issue unsecured commercial paper in aggregate amounts not exceeding the commercial paper back-up sublimit under our secured revolving credit facility, which is the lesser of $500 million or the amount available under our secured revolving credit facility. The commercial paper issuances are used to provide an additional financing source for our short-term liquidity needs. The maturities of the commercial paper issuances vary, but may not exceed 397 days from the date of issue. The commercial paper notes are classified as current and are included in current liabilities as short-term borrowings on our consolidated statements of financial position. Commercial paper consisted of the following (dollars in thousands): March 31, December 31, 2018 2017 Commercial paper outstanding, net of discounts $ 189,335 $ 144,667 Weighted average interest rate 1.95 % 1.52 % At March 31, 2018, $310.0 million of the commercial paper back-up sublimit remained available under the 2011 Revolving Credit Agreement. See Note 8 – Long-Term Debt.

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS	3 Months Ended
	Mar. 31, 2018
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS	NOTE 10 – ASSET RETIREMENT OBLIGATIONS We account for current obligations associated with the future retirement of tangible long‑lived assets in accordance with the accounting guidance relating to asset retirement and environmental obligations. This guidance requires that legal obligations associated with the retirement of long‑lived assets be recognized at fair value at the time the liability is incurred and capitalized as part of the related long‑lived asset. Over time, the liability is adjusted to its present value by recognizing accretion expense and the capitalized cost of the long‑lived asset is depreciated in a manner consistent with the depreciation of the underlying physical asset. In the absence of quoted market prices, we determine fair value by using present value techniques in which estimates of future cash flows associated with retirement activities are discounted using a credit adjusted risk‑free rate and market risk premium. Upon settlement of an asset retirement obligation, we will apply payment against the estimated liability and incur a gain or loss if the actual retirement costs differ from the estimated recorded liability. These liabilities are included in asset retirement obligations. Coal mines: We have asset retirement obligations for the final reclamation costs and post‑reclamation monitoring related to the Colowyo Mine, the New Horizon Mine, and the Fort Union Mine. New Horizon Mine started final reclamation June 8, 2017. Generation: We, including our undivided interest in jointly owned facilities, have asset retirement obligations related to equipment, dams, ponds, wells and underground storage tanks at the generating stations. Aggregate carrying amounts of asset retirement obligations are as follows (dollars in thousands): March 31, 2018 Asset retirement obligations at beginning of period $ 56,855 Liabilities incurred — Liabilities settled (1,050) Accretion expense 1,571 Change in cash flow estimate (560) Total asset retirement obligations at end of period $ 56,816 Less current asset retirement obligations at end of period (2,999) Long-term asset retirement obligations at end of period $ 53,817 We also have asset retirement obligations with indeterminate settlement dates. These are made up primarily of obligations attached to transmission and other easements that are considered by us to be operated in perpetuity and therefore the measurement of the obligation is not possible. A liability will be recognized in the period in which sufficient information exists to estimate a range of potential settlement dates as is needed to employ a present value technique to estimate fair value.

OTHER DEFERRED CREDITS AND OTHE

OTHER DEFERRED CREDITS AND OTHER LIABILITIES	3 Months Ended
	Mar. 31, 2018
OTHER DEFERRED CREDITS AND OTHER LIABILITIES
OTHER DEFERRED CREDITS AND OTHER LIABILITIES	NOTE 11 – OTHER DEFERRED CREDITS AND OTHER LIABILITIES In 2015, we renewed transmission right of way easements on tribal nation lands where certain of our electric transmission lines are located. $34.5 million will be paid by us for these easements from 2018 through the individual easement terms ending between 2036 and 2040. The present values for the easement payments were $21.3 million as of March 31, 2018 and December 31, 2017 which are recorded as other deferred credits and other liabilities. A contract liability represents an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. We have received deposits from others and these deposits are reflected in contract liabilities (unearned revenue) until recognized in other operating revenues over the life of the agreement. We have received deposits from various parties and those that may still be required to be returned are a liability and these are reflected in customer deposits. The following other deferred credits and other liabilities are reflected on our consolidated statements of financial position (dollars in thousands): March 31, December 31, 2018 2017 Transmission easements $ 21,337 $ 21,337 Contract liabilities (unearned revenue) - noncurrent 6,560 6,673 Customer deposits 2,690 2,898 Other 21,688 22,488 Total other deferred credits and other liabilities $ 52,275 $ 53,396

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	3 Months Ended
	Mar. 31, 2018
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS	NOTE 12 – EMPLOYEE BENEFIT PLANS Postretirement Benefits Other Than Pensions We sponsor three medical plans for all non-bargaining unit employees under the age of 65. Two of the plans provide postretirement medical benefits to full-time non-bargaining unit employees and retirees who receive benefits under those plans, who have attained age 55, and who elect to participate. All three of these non-bargaining unit medical plans offer postemployment medical benefits to employees on long-term disability. The plans were unfunded at March 31, 2018, are contributory (with retiree premium contributions equivalent to employee premiums, adjusted annually) and contain other cost-sharing features such as deductibles. The postretirement medical benefit and postemployment medical benefit obligations are determined annually (during the fourth quarter) by an independent actuary and are included in accumulated postretirement benefit and postemployment obligations on our consolidated statements of financial position as follows (dollars in thousands): March 31, 2018 Postretirement medical benefit obligation at beginning of period $ 8,455 Service cost 152 Interest cost 71 Benefit payments (net of contributions by participants) (103) Postretirement medical benefit obligation at end of period $ 8,575 Postemployment medical benefit obligation at end of period 367 Total postretirement and postemployment medical obligations at end of period $ 8,942 The service cost component of our net periodic benefit cost is included in operating expenses on our consolidated statements of operations. The components of net periodic benefit cost other than the service cost component are included in other income (expense) on our consolidated statements of operations. In accordance with the accounting standard related to postretirement benefits other than pensions, actuarial gains and losses are not recognized in income but are instead recorded in accumulated other income on our consolidated statements of financial position. If the unrecognized amount is in excess of 10 percent of the projected benefit obligation, amounts are reclassified out of accumulated other comprehensive income and included in net income as the excess is amortized over the average remaining service lives of the active plan participants. Unrecognized actuarial gains and losses have been determined per actuarial studies for the postretirement medical benefit obligation. The net unrecognized actuarial gains and losses related to the postretirement medical benefit obligations are included in accumulated other comprehensive income as follows (dollars in thousands): March 31, 2018 Amounts included in accumulated other comprehensive income at beginning of year $ (369) Amortization of prior service credit into other income (expense) (20) Amounts included in accumulated other comprehensive income at end of year $ (389)

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2018
REVENUE
REVENUE	NOTE 13 – REVENUE Revenue from Contracts with Customers Our revenues are derived primarily from the sale of electric power to our Members pursuant to long-term wholesale electric service contracts. Our contracts with our Members extend through 2050 for 42 Members and 2040 for the remaining Member. Member electric sales Revenues from electric power sales to our Members are primarily from our Class A rate schedule. Our Class A rate schedule for electric power sales to our Members consist of two billing components: an energy rate and demand rates. Our Class A rate schedule is variable and is approved by our Board. Energy and demand have the same pattern of transfer to our Members and are both measurements of the electric power provided to our Members. Therefore, the provision of electric power to our Members is one performance obligation. Prior to our Members’ requirement for electric power, we do not have a contractual right to consideration as we are not obligated to provide electric power until the Member requires each incremental unit of electric power. We transfer control of the electric power to our Members over time and our Members simultaneously receive and consume the benefits of the electric power. Progress toward completion of our performance obligation is measured using the output method, meter readings are taken at the end of each month for billing purposes, energy and demand are determined after the meter readings and Members are invoiced based on the meter reading. Payments from our Members are received in accordance with the wholesale electric service contracts terms, which is less than 30 days from the invoice date. Member electric sales revenue is recorded as Member electric sales on our consolidated statements of operations and Accounts receivable – Members on our consolidated statements of financial position. In addition to our Member electric sales, we have non-member electric sales and other operating revenue which consist of several revenue streams. The following revenue is reflected on our consolidated statements of operations for the period ended March 31, 2018 and March 31, 2017 (dollars in thousands): For the period ended March 31, March 31, Non-member electric sales: 2018 2017 Long-term contracts $ 11,943 $ 21,120 Short-term contracts 4,919 6,538 Deferred non-member electric sales — 7,500 Coal sales — 8,684 Other 12,300 12,172 Total non-member electric sales and other operating revenue $ 29,162 $ 56,014 Non-member electric sales Revenues from electric power sales to non-members are primarily from two long-term contracts and short-term market sales. In 2017, we recognized $7.5 million of deferred revenue as directed by our Board, which has budgetary and rate-setting authority. See Note 2 – Accounting for Rate Regulation. We have both long-term and short-term non-member electric sales contracts that provide energy. Prior to our customers’ demand for energy, we do not have a contractual right to consideration as we are not obligated to provide energy until the customer demands each incremental unit of energy. We transfer control of the energy to our customer over time and our customer simultaneously receives and consumes the benefits of the electric power. Progress toward completion of our performance obligation is measured using the output method. Payments are received in accordance with the contract terms, which is less than 30 days after the invoice is received by the customer. Coal Sales Coal sales revenue resulted from the sale of a portion of the coal from the Colowyo Mine pursuant to a contract that expired in December 2017. We had an obligation to deliver coal and our progress of our completion toward our performance obligation was measured using the output method. Our performance obligation was completed as coal was loaded. Coal sales revenue of $8.7 million for the three months ended March 31, 2017 was included in other operating revenue on our consolidated statements of operations. Other operating revenue Other operating revenue consists primarily of the following revenue streams: wheeling, transmission, supplying steam and water, and leasing. Wheeling revenue is received when we charge other energy companies for transmitting electricity over our transmission lines (payments are received in accordance with the contract terms which is within 20 days of the date the invoice was issued). Transmission revenue is from Southwest Power Pool’s scheduling of transmission across our transmission assets because of our membership in it (Southwest Power Pool collects the revenue from the customer and pays us for the scheduling, system control, dispatch transmission service, and the annual transmission revenue requirement). Steam and water revenue is derived from supplying steam and water to a paper manufacturer located adjacent to the Escalante Station (payments from the customer are received in accordance with the contract terms which is less than 15 days from the invoice date). Each of these services or goods are provided over time and progress toward completion of our performance obligations are measured using the output method. The lease revenue is primarily from a certain power sales arrangement that is required to be accounted for as an operating lease since the arrangement is in substance a lease because it conveys the right to use power generating equipment for a stated period of time.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2018
INCOME TAXES
INCOME TAXES	NOTE 14 – INCOME TAXES We are a taxable cooperative subject to federal and state taxation. As a taxable electric cooperative, we are allowed a tax exclusion for margins allocated as patronage capital. We utilize the liability method of accounting for income taxes. However, in accordance with our regulatory accounting treatment, changes in deferred tax assets or liabilities result in the establishment of a regulatory asset or liability. A regulatory asset or liability associated with deferred income taxes generally represents the future increase or decrease in income taxes payable that will be settled or received through future rate revenues. Under this regulatory accounting approach, the income tax expense (benefit) on our consolidated statements of operations includes only the current provision. Our consolidated statements of operations included an income tax benefit of $0.2 million and $0.3 million for the three months ended March 31, 2018 and March 31, 2017, respectively. These income tax benefits are due to an alternative minimum tax credit refund.

FAIR VALUE

FAIR VALUE	3 Months Ended
	Mar. 31, 2018
FAIR VALUE
FAIR VALUE	NOTE 15 – FAIR VALUE Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal or in the most advantageous market when no principal market exists. The fair value measurement accounting guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability (market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not under duress). In considering market participant assumptions in fair value measurements, a three-tier fair value hierarchy for measuring fair value was established which prioritizes the inputs used in measuring fair value as follows: Level 1 inputs are based upon quoted prices for identical instruments traded in active (exchange-traded) markets. Valuations are obtained from readily available pricing sources for market transactions (observable market data) involving identical assets or liabilities. Level 2 inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques (such as option pricing models, discounted cash flow models) for which all significant assumptions are observable in the market. Level 3 inputs consist of unobservable market data which is typically based on an entity’s own assumptions of what a market participant would use in pricing an asset or liability as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Marketable Securities We hold marketable securities in connection with the directors’ and executives’ elective deferred compensation plans which consist of investments in stock funds, bond funds and money market funds. These securities are measured at fair value on a recurring basis with changes in fair value recognized in earnings. The estimated fair value of the investments is based upon their active market value (Level 1 inputs) and is included in other noncurrent assets on our consolidated statements of financial position. The cost and fair values of our marketable securities are as follows (dollars in thousands): As of March 31, 2018 As of December 31, 2017 Estimated Estimated Cost Fair Value Cost Fair Value Marketable securities $ 806 $ 923 $ 1,007 $ 1,166 Cash Equivalents We invest portions of our cash and cash equivalents in commercial paper, money market funds, and other highly liquid investments. The fair value of these investments approximates our cost basis in the investments. In aggregate, the fair value was $80.2 million as of March 31, 2018 and $109.4 million as of December 31, 2017, respectively. Debt The fair values of debt were estimated using discounted cash flow analyses based on our current incremental borrowing rates for similar types of borrowing arrangements. These valuation assumptions utilize observable inputs based on market data obtained from independent sources and are therefore considered Level 2 inputs (quoted prices for similar assets, liabilities (adjusted) and market corroborated inputs). The principal amounts and fair values of our debt are as follows (dollars in thousands): As of March 31, 2018 As of December 31, 2017 Principal Estimated Principal Estimated Amount Fair Value Amount Fair Value Total debt $ 3,193,682 $ 3,464,617 $ 3,211,421 $ 3,600,650 Interest Rate Swaps We entered into two forward starting interest rate swaps in 2016 to hedge a portion of our future long-term debt interest rate expense. See Note 8 – Long-Term Debt. These interest rate swaps are derivative instruments in accordance with ASC 815, Derivatives and Hedging, and are recorded at fair value on a recurring basis. The estimated fair value of these interest rate swaps utilizes observable inputs based on market data obtained from independent sources and are therefore considered Level 2 inputs (quoted prices for similar assets, liabilities (adjusted) and market corroborated inputs) and are included in other deferred charges on our consolidated statements of financial position. On October 12, 2017, we settled one of the interest rate swaps, which resulted in a realized gain of $4.6 million. In accordance with regulatory accounting, the settled interest rate swap gain was deferred and is being amortized to interest expense over the 12‑year term of the First Mortgage Obligations, Series 2017A. See Note 2 – Accounting for Rate Regulation. At March 31, 2018, the fair value of our remaining interest rate swap was an unrealized gain of $8.4 million, which was deferred in accordance with our regulatory accounting.

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES	3 Months Ended
	Mar. 31, 2018
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES	NOTE 16 – VARIABLE INTEREST ENTITIES The following is a description of our financial interests in variable interest entities that we consider significant. This includes an entity for which we are determined to be the primary beneficiary and therefore consolidate and also entities for which we are not the primary beneficiary and therefore do not consolidate. Consolidated Variable Interest Entity Springerville Partnership: We own a 51 percent equity interest, including the 1 percent general partner equity interest, in the Springerville Partnership, which is the 100 percent owner of Springerville Unit 3 Holding LLC (“Owner Lessor”). The Owner Lessor is the owner of the Springerville Unit 3. We, as general partner of the Springerville Partnership, have the full, exclusive and complete right, power and discretion to operate, manage and control the affairs of the Springerville Partnership and take certain actions necessary to maintain the Springerville Partnership in good standing without the consent of the limited partners. Additionally, the Owner Lessor has historically not demonstrated an ability to finance its activities without additional financial support. The financial support is provided by our remittance of lease payments in order to permit the Owner Lessor, the holder of the Springerville Unit 3 assets, to pay the debt obligations and equity returns of the Springerville Partnership. We have the primary risk (expense) exposure in operating the Springerville Unit 3 assets and are responsible for 100 percent of the operation, maintenance and capital expenditures of Springerville Unit 3 and the decisions related to those expenditures including budgeting, financing and dispatch of power. Based on all these facts, it was determined that we are the primary beneficiary of the Owner Lessor. Therefore, the Springerville Partnership and Owner Lessor have been consolidated by us. Our consolidated statements of financial position include the Springerville Partnership’s net electric plant of $808.1 million and $812.7 million at March 31, 2018 and December 31, 2017, respectively, the long-term debt of $417.2 million (including debt premiums) and $431.3 million (including debt premiums) at March 31, 2018 and December 31, 2017, respectively, accrued interest associated with the long-term debt of $4.8 million and $12.4 million at March 31, 2018 and December 31, 2017, respectively, and the 49 percent noncontrolling equity interest in the Springerville Partnership of $109.2 million and $111.3 million at March 31, 2018 and December 31, 2017, respectively. Our consolidated statements of operations include the Springerville Partnership’s depreciation and amortization expense of $4.5 million for the three months ended March 31, 2018 and $5.3 million for the comparable period in 2017. Our consolidated statements of operations also include interest expense of $7.3 million for the three months ended March 31, 2018 and $7.2 million for the comparable period in 2017. The net income or loss attributable to the 49 percent noncontrolling equity interest in the Springerville Partnership is reflected on our consolidated statements of operations. The revenue associated with the Springerville Partnership lease has been eliminated in consolidation. Income, losses and cash flows of the Springerville Partnership are allocated to the general and limited partners based on their equity ownership percentages. Unconsolidated Variable Interest Entities Western Fuels Association, Inc. (“WFA”) : WFA is a non-profit membership corporation organized for the purpose of acquiring and supplying fuel resources to its members, which includes us. WFA supplies fuel to MBPP for the use of the Laramie River Station through its ownership in Western Fuels-Wyoming. We also receive coal supplies directly from WFA for the Escalante Generating Station in New Mexico. The pricing structure of the coal supply agreements with WFA is designed to recover the mine operating costs of the mine supplying the coal and therefore the coal sales agreements provide the financial support for the mine operations. There is not sufficient equity at risk for WFA to finance its activities without additional financial support. Therefore, WFA is considered a variable interest entity in which we have a variable interest. The power to direct the activities that most significantly impact WFA’s economic performance (acquiring and supplying fuel resources) is held by the members who are represented on the WFA board of directors whose actions require joint approval. Therefore, since there is shared power over the significant activities of WFA, we are not the primary beneficiary of WFA and the entity is not consolidated. Our investment in WFA, accounted for using the cost method, was $2.3 million at March 31, 2018 and December 31, 2017 and is included in investments in other associations. Western Fuels – Wyoming (“WFW”) : WFW, the owner and operator of the Dry Fork Mine in Gillette, WY, was organized for the purpose of acquiring and supplying coal, through long-term coal supply agreements, to be used in the production of electric energy at the Laramie River Station (owned by the participants of MBPP) and at the Dry Fork Station (owned by Basin). WFA owns 100 percent of the class AA shares and 75 percent of the class BB shares of WFW, while the participants of MBPP (of which we have a 24.13 percent undivided interest) own the remaining 25 percent of class BB shares of WFW. The pricing structure of the coal supply agreements is designed to recover the costs of production of the Dry Fork Mine and therefore the coal supply agreements provide the financial support for the operation of the Dry Fork Mine. There is not sufficient equity at risk at WFW for it to finance its activities without additional financial support. Therefore, WFW is considered a variable interest entity in which we have a variable interest. The power to direct the activities that most significantly impact WFW’s economic performance (which includes operations, maintenance and reclamation activities) is shared with the equity interest holders since each member has representation on the WFW board of directors whose actions require joint approval. Therefore, we are not the primary beneficiary of WFW and the entity is not consolidated. Trapper Mining, Inc. (“Trapper Mining”) : Trapper Mining is a cooperative organized for the purpose of mining, selling and delivering coal from the Trapper Mine to the Craig Generating Station Units 1 and 2 through long-term coal supply agreements. Trapper Mining is jointly owned by some of the participants of the Yampa Project. We have a 26.57 percent cooperative member interest in Trapper Mining. The pricing structure of the coal supply agreements is designed to recover the costs of production of the Trapper Mine and therefore the coal supply agreements provide the financial support for the operation of the Trapper Mine. There is not sufficient equity at risk for Trapper Mining to finance its activities without the additional financial support. Therefore, Trapper Mining is considered a variable interest entity in which we have a variable interest. The power to direct the activities that most significantly impact Trapper Mining’s economic performance (which includes operations, maintenance and reclamation activities) is shared with the cooperative members since each member has representation on the Trapper Mining board of directors whose actions require joint approval. Therefore, we are not the primary beneficiary of Trapper Mining and the entity is not consolidated. We record our investment in Trapper Mining using the equity method. Our membership interest in Trapper Mining was $15.1 million at March 31, 2018 and $15.0 million at December 31, 2017.

LEGAL

LEGAL	3 Months Ended
	Mar. 31, 2018
LEGAL
LEGAL	NOTE 17 – LEGAL Other than as disclosed below, there are no new material litigation or proceedings pending or threatened against us or any material developments in any material existing pending litigation or proceedings. In June 2011, a wildfire in New Mexico, known as the Las Conchas Fire, burned for five weeks in northern New Mexico, primarily on national forest service land in the Santa Fe National Forest. Six plaintiff groups, composed of property owners in the area of the Las Conchas Fire, filed separate lawsuits against our Member, Jemez Mountains Electric Cooperative, Inc. (“JMEC”) in the Thirteenth District Court, Sandoval County in the State of New Mexico. Plaintiffs alleged that the fire ignited when a tree growing outside JMEC’s right of way fell onto a distribution line owned by JMEC as a result of high winds. On January 7, 2014, the district court allowed all parties and related parties to amend their complaints to include the addition of us as a party defendant. After JMEC settled with one plaintiff group, the remaining cases were Elizabeth Ora Cox, et al., v. Jemez Mountains Electric Cooperative, Inc., et al.; Norman Armijo, et al., v. Jemez Mountains Electric Cooperative, Inc., et al.; Esequiel Espinoza, et al. v. Allstate Property & Casualty, et al.; Jemez Pueblo v. Jemez Mountains Electric Cooperative, Inc., et al.; and Pueblo de Cochiti., et al. v. Jemez Mountains Electric Cooperative, Inc., et al. The allegations in each case were similar. Plaintiffs alleged that we owed them independent duties to inspect and maintain the right‑of‑way for JMEC’s distribution line and that we were also jointly liable for any negligence by JMEC under joint venture and joint enterprise theories. A jury trial commenced on September 28, 2015 on the liability aspect of this matter. On October 28, 2015, the jury affirmed our position that we and JMEC did not operate as a joint venture or joint enterprise. The jury did find we owed the plaintiffs an independent duty and allocated comparative negligence with JMEC 75 percent negligent, us 20 percent negligent, and the United States Forest Service 5 percent negligent. Although we have not settled this matter, we have reached separate confidential stipulations on damages with all plaintiff groups, reserving the right to appeal liability issues. We maintain $100 million in liability insurance coverage for this matter. On September 12 and 25, 2017, we filed notices to appeal to the New Mexico Court of Appeals the determination of our liability for this matter. The plaintiffs have filed cross-appeals on their joint venture and joint enterprise claims. If we do not prevail on appeal, we expect our allocation of damages to be covered by our liability insurance. Although we cannot predict the outcome of this matter at this point in time, we do not expect them to have a material adverse effect on our financial condition or our future results of operations or cash flows. Pursuant to a 30 year power sales contract with another utility that expires in 2020, we currently sell such utility 25 MWs of capacity and energy. The purchase rate for capacity is determined using our Class A wholesale rate schedule. The utility has recently reviewed our charges for capacity since 2000 and alleges such charges are not in accordance with the terms of the power sales contract. We are in discussions with the utility regarding their review of our charges for capacity and no formal dispute resolution process has commenced. It is not possible to predict whether we will incur any liability or to reasonably estimate the amount or range of loss, if any, we might incur in connection with this matter.

PRESENTATION OF FINANCIAL INF24

PRESENTATION OF FINANCIAL INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2018
PRESENTATION OF FINANCIAL INFORMATION
Schedule of jointly owned facilities	Our share in each jointly owned facility is as follows as of March 31, 2018 (dollars in thousands): Electric Construction Tri-State Plant in Accumulated Work In Share Service Depreciation Progress Yampa Project - Craig Generating Station Units 1 and 2 24.00 % $ 396,546 $ 239,218 $ 4,864 MBPP - Laramie River Station 24.13 % 410,174 296,183 33,008 Total $ 806,720 $ 535,401 $ 37,872

ACCOUNTING FOR RATE REGULATION

ACCOUNTING FOR RATE REGULATION (Tables)	3 Months Ended
	Mar. 31, 2018
ACCOUNTING FOR RATE REGULATION
Schedule of regulatory assets and liabilities	Regulatory assets and liabilities are as follows (dollars in thousands): March 31, December 31, 2018 2017 Regulatory assets Deferred income tax expense (1) $ 17,205 $ 17,205 Deferred prepaid lease expense – Craig Unit 3 Lease (2) 1,618 3,237 Deferred prepaid lease expense – Springerville Unit 3 Lease (3) 87,723 88,296 Goodwill – J.M. Shafer (4) 54,131 54,843 Goodwill – Colowyo Coal (5) 39,002 39,261 Deferred debt prepayment transaction costs (6) 156,031 158,187 Deferred Holcomb expansion impairment loss (7) 93,494 93,494 Total regulatory assets 449,204 454,523 Regulatory liabilities Interest rate swap - unrealized gain (8) 8,357 4,311 Interest rate swap - realized gain (9) 4,559 4,614 Deferred revenues (10) 30,327 30,327 Membership withdrawal (11) 42,572 42,572 Total regulatory liabilities 85,815 81,824 Net regulatory asset $ 363,389 $ 372,699 (1) A regulatory asset or liability associated with deferred income taxes generally represents the future increase or decrease in income taxes payable that will be received or settled through future rate revenues. (2) Represents deferral of the loss on acquisition related to the Craig Generating Station Unit 3 prepaid lease expense upon acquisitions of equity interests in 2002 and 2006. The regulatory asset for the deferred prepaid lease expense was being amortized to depreciation, amortization and depletion expense in the amount of $6.5 million annually through December 31, 2017, and $1.6 million for the three month period ending March 31, 2018, and recovered from our Members in rates. The remaining $1.6 million will be recognized as depreciation, amortization and depletion expense for the three month period ending June 30, 2018, and recovered from our Members in rates. (3) Represents deferral of the loss on acquisition related to the Springerville Generating Station Unit 3 (“Springerville Unit 3”) prepaid lease expense upon acquiring a controlling interest in the Springerville Unit 3 Partnership LP (“Springerville Partnership”) in 2009. The regulatory asset for the deferred prepaid lease expense is being amortized to depreciation, amortization and depletion expense in the amount of $2.3 million annually through the 47-year period ending in 2056 and recovered from our Members in rates. (4) Represents goodwill related to our acquisition of Thermo Cogeneration Partnership, LP in December 2011. Goodwill is being amortized to depreciation, amortization and depletion expense in the amount of $2.8 million annually through the 25-year period ending in 2036 and recovered from our Members in rates. (5) Represents goodwill related to our acquisition of Colowyo Coal Company LP (“Colowyo Coal”) in December 2011. Goodwill is being amortized to depreciation, amortization and depletion expense in the amount of $1.0 million annually through the 44-year period ending in 2056 and recovered from our Members in rates. (6) Represents transaction costs that we incurred related to the prepayment of our long-term debt in 2014. These costs are being amortized to depreciation, amortization and depletion expense in the amount of $8.6 million annually over the 21.4-year average life of the new debt issued and recovered from our Members in rates. (7) Represents deferral of the impairment loss related to development costs, including costs for the option to purchase development rights for the expansion of the Holcomb Generating Station. The plan for the recovery from our Members in rates has not been determined by our Board. Once the plan for recovery is determined, the deferred impairment loss will be recognized in other operating expenses. (8) Represents deferral of an unrealized gain related to the change in fair value of a forward starting interest rate swap that was entered into in 2016 in order to hedge interest rates on anticipated future borrowings. Upon settlement of this interest rate swap, the realized gain or loss will be deferred and subsequently recognized as interest expense when amortized over the term of the associated long-term debt borrowing. See Note 8 – Long-Term Debt and Note 15 – Fair Value. (9) Represents deferral of a realized gain of $4.6 million related to the October 2017 settlement of a forward starting interest rate swap that was entered into in 2016. This realized gain was deferred as a regulatory liability and is being amortized to interest expense over the 12-year term of the First Mortgage Obligations, Series 2017A. See Note 8 – Long-Term Debt. (10) Represents deferral of the recognition of non-member electric sales revenues. These deferred non-member electric sales revenues will be refunded to Members through reduced rates when recognized in non-member electric sales revenue in future periods. Represents the deferral of the recognition of other income recorded in connection with the withdrawal of a former Member from membership in us. This deferred membership withdrawal income will be refunded to Members through reduced rates when recognized in other income in future periods.

INVESTMENTS IN OTHER ASSOCIAT26

INVESTMENTS IN OTHER ASSOCIATIONS (Tables)	3 Months Ended
	Mar. 31, 2018
INVESTMENTS IN OTHER ASSOCIATIONS
Schedule of investments in other associations	Investments in other associations are as follows (dollars in thousands): March 31, December 31, 2018 2017 Basin Electric Power Cooperative $ 101,820 $ 101,820 National Rural Utilities Cooperative Finance Corporation - patronage capital 11,232 11,232 National Rural Utilities Cooperative Finance Corporation - capital term certificates 16,021 16,085 CoBank, ACB 9,062 8,174 Western Fuels Association, Inc. 2,336 2,346 Other 4,161 3,951 Investments in other associations $ 144,632 $ 143,608

INVESTMENTS IN AND ADVANCES T27

INVESTMENTS IN AND ADVANCES TO COAL MINES (Tables)	3 Months Ended
	Mar. 31, 2018
INVESTMENTS IN AND ADVANCES TO COAL MINES
Schedule of investments in and advances to coal mines	Investments in and advances to coal mines are as follows (dollars in thousands): March 31, December 31, 2018 2017 Investment in Trapper Mine $ 15,131 $ 14,998 Advances to Dry Fork Mine 3,161 3,276 Investments in and advances to coal mines $ 18,292 $ 18,274

CASH, CASH EQUIVALENTS AND RE28

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS (Tables)	3 Months Ended
	Mar. 31, 2018
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS
Schedule of cash, cash equivalents and restricted cash and investments	The following table provides a reconciliation of cash, cash equivalents and restricted cash and investments reported within our consolidated statements of financial position that sum to the total of the same such amount shown in our consolidated statements of cash flows (dollars in thousands): March 31, December 31, 2018 2017 Cash and cash equivalents $ 116,617 $ 143,694 Restricted cash and investments - current 1,308 1,292 Restricted cash and investments - noncurrent 6,066 5,979 Cash, cash equivalents and restricted cash and investments $ 123,991 $ 150,965

CONTRACT ASSETS AND CONTRACT 29

CONTRACT ASSETS AND CONTRACT LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2018
CONTRACT ASSETS AND CONTRACT LIABILITIES
Schedule of contract assets and liabilities	Our contract assets and liabilities consist of the following (dollars in thousands): March 31, December 31, 2018 2017 Accounts receivable - Members $ 94,151 $ 102,035 Other accounts receivable - trade: Non-member electric sales 6,061 5,493 Coal sales — 1,446 Other 8,424 6,634 Other accounts receivable - trade 14,485 13,573 Other accounts receivable - nontrade 10,107 2,461 Total other accounts receivable $ 24,592 $ 16,034 Contract liabilities (unearned revenue) $ 7,366 $ 7,567

OTHER DEFERRED CHARGES (Tables)

OTHER DEFERRED CHARGES (Tables)	3 Months Ended
	Mar. 31, 2018
OTHER DEFERRED CHARGES.
Schedule of Other Deferred Charges	Other deferred charges are as follows (dollars in thousands): March 31, December 31, 2018 2017 Preliminary surveys and investigations $ 20,403 $ 19,737 Advances to operating agents of jointly owned facilities 9,938 10,740 Interest rate swaps 8,357 4,311 Other 2,138 3,704 Total other deferred charges $ 40,836 $ 38,492

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	3 Months Ended
	Mar. 31, 2018
LONG-TERM DEBT.
Schedule of long-term debt	Long-term debt consists of the following (dollars in thousands): March 31, December 31, 2018 2017 Total debt $ 3,193,682 $ 3,211,421 Less debt issuance costs (21,217) (21,720) Less debt discounts (10,306) (10,360) Plus debt premiums 18,539 18,949 Total debt adjusted for debt issuance costs, discounts and premiums 3,180,698 3,198,290 Less current maturities (97,929) (78,004) Long-term debt $ 3,082,769 $ 3,120,286
Schedule of interest rate swap contracts	The terms of the remaining interest rate swap contract are as follows (dollars in thousands): Notional Fixed Benchmark Interest Effective Maturity Amount Rate (Pay) Rate (Receive) Date Date Interest rate swap $ 80,000 2.304 % 30 year - LIBOR June 2019 June 2049

SHORT-TERM BORROWINGS (Tables)

SHORT-TERM BORROWINGS (Tables)	3 Months Ended
	Mar. 31, 2018
SHORT-TERM BORROWINGS
Schedule of commercial paper	Commercial paper consisted of the following (dollars in thousands): March 31, December 31, 2018 2017 Commercial paper outstanding, net of discounts $ 189,335 $ 144,667 Weighted average interest rate 1.95 % 1.52 %

ASSET RETIREMENT OBLIGATIONS (T

ASSET RETIREMENT OBLIGATIONS (Tables)	3 Months Ended
	Mar. 31, 2018
ASSET RETIREMENT OBLIGATION
Schedule of Asset Retirement Obligations	Aggregate carrying amounts of asset retirement obligations are as follows (dollars in thousands): March 31, 2018 Asset retirement obligations at beginning of period $ 56,855 Liabilities incurred — Liabilities settled (1,050) Accretion expense 1,571 Change in cash flow estimate (560) Total asset retirement obligations at end of period $ 56,816 Less current asset retirement obligations at end of period (2,999) Long-term asset retirement obligations at end of period $ 53,817

OTHER DEFERRED CREDITS AND OT34

OTHER DEFERRED CREDITS AND OTHER LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2018
OTHER DEFERRED CREDITS AND OTHER LIABILITIES
Schedule of other deferred credits and other liabilities	The following other deferred credits and other liabilities are reflected on our consolidated statements of financial position (dollars in thousands): March 31, December 31, 2018 2017 Transmission easements $ 21,337 $ 21,337 Contract liabilities (unearned revenue) - noncurrent 6,560 6,673 Customer deposits 2,690 2,898 Other 21,688 22,488 Total other deferred credits and other liabilities $ 52,275 $ 53,396

EMPLOYEE BENEFIT PLANS (Tables)

EMPLOYEE BENEFIT PLANS (Tables)	3 Months Ended
	Mar. 31, 2018
EMPLOYEE BENEFIT PLANS
Schedule of the postretirement medical benefit and postemployment medical benefit obligations	The postretirement medical benefit and postemployment medical benefit obligations are determined annually (during the fourth quarter) by an independent actuary and are included in accumulated postretirement benefit and postemployment obligations on our consolidated statements of financial position as follows (dollars in thousands): March 31, 2018 Postretirement medical benefit obligation at beginning of period $ 8,455 Service cost 152 Interest cost 71 Benefit payments (net of contributions by participants) (103) Postretirement medical benefit obligation at end of period $ 8,575 Postemployment medical benefit obligation at end of period 367 Total postretirement and postemployment medical obligations at end of period $ 8,942
Schedule of the net unrecognized actuarial gains and losses related to the postretirement medical benefit obligation that are included in accumulated other comprehensive income	The net unrecognized actuarial gains and losses related to the postretirement medical benefit obligations are included in accumulated other comprehensive income as follows (dollars in thousands): March 31, 2018 Amounts included in accumulated other comprehensive income at beginning of year $ (369) Amortization of prior service credit into other income (expense) (20) Amounts included in accumulated other comprehensive income at end of year $ (389)

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2018
REVENUE
Schedule of revenue from contracts with non-member customers and other operating revenue	In addition to our Member electric sales, we have non-member electric sales and other operating revenue which consist of several revenue streams. The following revenue is reflected on our consolidated statements of operations for the period ended March 31, 2018 and March 31, 2017 (dollars in thousands): For the period ended March 31, March 31, Non-member electric sales: 2018 2017 Long-term contracts $ 11,943 $ 21,120 Short-term contracts 4,919 6,538 Deferred non-member electric sales — 7,500 Coal sales — 8,684 Other 12,300 12,172 Total non-member electric sales and other operating revenue $ 29,162 $ 56,014

FAIR VALUE (Tables)

FAIR VALUE (Tables)	3 Months Ended
	Mar. 31, 2018
Marketable securities
FAIR VALUE
Schedule of carrying amounts and fair values of assets and liabilities	The cost and fair values of our marketable securities are as follows (dollars in thousands): As of March 31, 2018 As of December 31, 2017 Estimated Estimated Cost Fair Value Cost Fair Value Marketable securities $ 806 $ 923 $ 1,007 $ 1,166
Long-term debt
FAIR VALUE
Schedule of carrying amounts and fair values of assets and liabilities	The principal amounts and fair values of our debt are as follows (dollars in thousands): As of March 31, 2018 As of December 31, 2017 Principal Estimated Principal Estimated Amount Fair Value Amount Fair Value Total debt $ 3,193,682 $ 3,464,617 $ 3,211,421 $ 3,600,650

PRESENTATION OF FINANCIAL INF38

PRESENTATION OF FINANCIAL INFORMATION - Jointly Owned Facilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)facility
Jointly owned facilities
Number of jointly owned facilities | facility	2
Electric plant in service	$ 806,720
Accumulated depreciation	535,401
Construction work in progress	$ 37,872
ASU 2014-09 Practical expedients
Revenue, Practical Expedient, Initial Application and Transition, Completed Contract, Same Reporting Period [true/false]	true
Revenue, Practical Expedient, Initial Application and Transition, Nonrestatement of Modified Contract [true/false]	true
Yampa
Jointly owned facilities
Tri-State share (as a percent)	24.00%
Electric plant in service	$ 396,546
Accumulated depreciation	239,218
Construction work in progress	$ 4,864
MBPP
Jointly owned facilities
Tri-State share (as a percent)	24.13%
Electric plant in service	$ 410,174
Accumulated depreciation	296,183
Construction work in progress	$ 33,008

ACCOUNTING FOR RATE REGULATIO39

ACCOUNTING FOR RATE REGULATION (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Oct. 31, 2017	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Regulatory assets and liabilities
Regulatory assets			$ 449,204	$ 454,523
Regulatory liabilities			85,815	81,824
Net regulatory asset			363,389	372,699
Interest rate swap - unrealized gain
Regulatory assets and liabilities
Regulatory liabilities			8,357	4,311
Interest rate swaps, realized gain
Regulatory assets and liabilities
Regulatory liabilities	$ 4,600		4,559	4,614
Proceeds from settlement of interest rate swaps	$ 4,600
Deferred non-member electric sales
Regulatory assets and liabilities
Regulatory liabilities			30,327	30,327
Deferred revenue from membership withdrawal
Regulatory assets and liabilities
Regulatory liabilities			42,572	42,572
Deferred income tax expense
Regulatory assets and liabilities
Regulatory assets			17,205	17,205
Deferred prepaid lease expense | Craig Unit 3 Lease
Regulatory assets and liabilities
Regulatory assets			1,618	3,237
Annual amortization expense				6,500
Amortization expense			1,600
Deferred prepaid lease expense | Springerville Unit 3 Lease
Regulatory assets and liabilities
Regulatory assets			87,723	88,296
Annual amortization expense			$ 2,300
Amortization period			47 years
Goodwill | TCP
Regulatory assets and liabilities
Regulatory assets			$ 54,131	54,843
Annual amortization expense			$ 2,800
Amortization period			25 years
Goodwill | Colowyo Coal
Regulatory assets and liabilities
Regulatory assets			$ 39,002	39,261
Annual amortization expense			$ 1,000
Amortization period			44 years
Deferred debt prepayment transaction costs
Regulatory assets and liabilities
Regulatory assets			$ 156,031	158,187
Annual amortization expense			$ 8,600
Amortization period			21 years 4 months 24 days
Holcomb Expansion | Deferred impairment loss
Regulatory assets and liabilities
Regulatory assets			$ 93,494	$ 93,494
Forecast | Deferred prepaid lease expense | Craig Unit 3 Lease
Regulatory assets and liabilities
Amortization expense		$ 1,600
First Mortgage Obligations, Series 2017A , Tranche 1, 3.34%, due through 2029
Regulatory assets and liabilities
Term of issuance			12 years

INVESTMENTS IN OTHER ASSOCIAT40

INVESTMENTS IN OTHER ASSOCIATIONS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Investments in other associations
Investment in other associations	$ 144,632		$ 143,608
Impairment during the period	0	$ 0
Basin Electric Power Cooperative
Investments in other associations
Investment in other associations	101,820		101,820
National Rural Utilities Cooperative Finance Corporation - patronage capital
Investments in other associations
Investment in other associations	11,232		11,232
National Rural Utilities Cooperative Finance Corporation - capital term certificates
Investments in other associations
Investment in other associations	16,021		16,085
CoBank, ACB
Investments in other associations
Investment in other associations	9,062		8,174
Western Fuels Association
Investments in other associations
Investment in other associations	2,336		2,346
Other
Investments in other associations
Investment in other associations	$ 4,161		$ 3,951

INVESTMENTS IN AND ADVANCES T41

INVESTMENTS IN AND ADVANCES TO COAL MINES (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Investments in and advances to coal mines
Investments in and advances to coal mines	$ 18,292	$ 18,274
Trapper Mining
Investments in and advances to coal mines
Investment in coal mine	15,131	14,998
Dry Fork Mine
Investments in and advances to coal mines
Advances	$ 3,161	$ 3,276

CASH, CASH EQUIVALENTS AND RE42

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND INVESTMENTS
Cash and cash equivalents	$ 116,617	$ 143,694
Restricted cash and investments - current	1,308	1,292
Restricted cash and investments - noncurrent	6,066	5,979
Cash, cash equivalents and restricted cash and investments	$ 123,991	$ 150,965	$ 134,615	$ 167,890

CONTRACT ASSETS AND CONTRACT 43

CONTRACT ASSETS AND CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Contract assets
Contract assets	$ 0
Accounts receivable
Accounts receivable—Members	94,151	$ 102,035
Other accounts receivable	24,592	16,034
Contract liabilities
Contract liabilities (unearned revenue)	7,366	7,567
Other accounts receivable - trade
Accounts receivable
Other accounts receivable	14,485	13,573
Other accounts receivable - trade | Non-member electric sales
Accounts receivable
Other accounts receivable	6,061	5,493
Other accounts receivable - trade | Coal Sales
Accounts receivable
Other accounts receivable		1,446
Other accounts receivable - trade | Other
Accounts receivable
Other accounts receivable	8,424	6,634
Other accounts receivable, non-trade
Accounts receivable
Other accounts receivable	10,107	$ 2,461
Other operating revenue
Contract liabilities
Contract liabilities recognized	$ 200

OTHER DEFERRED CHARGES (Details

OTHER DEFERRED CHARGES (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2017USD ($)instrument	Dec. 31, 2016instrument	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Oct. 12, 2017instrument
Other deferred charges
Regulatory liabilities			$ 85,815	$ 81,824
Preliminary surveys and investigations			20,403	19,737
Advances to operating agents of jointly owned facilities			9,938	10,740
Interest rate swaps			8,357	4,311
Other			2,138	3,704
Total other deferred charges			40,836	38,492
Interest rate swaps, realized gain
Other deferred charges
Regulatory liabilities	$ 4,600		4,559	4,614
Amortization period	12 years
Interest rate swap - unrealized gain
Other deferred charges
Regulatory liabilities			$ 8,357	$ 4,311
Interest rate swaps
Other deferred charges
Number of instruments entered into | instrument		2
Number of instruments settled | instrument	1				1

LONG-TERM DEBT - Other Informat

LONG-TERM DEBT - Other Information (Details) $ in Thousands	Apr. 25, 2018USD ($)	Mar. 31, 2018USD ($)instrument	Dec. 31, 2017USD ($)	Nov. 16, 2017USD ($)
Unsecured debt
Number of unsecured debt instruments | instrument		2
Unsecured notes		$ 39,700
Credit facility information
Outstanding borrowings		3,193,682	$ 3,211,421
First Mortgage Obligations, Series 2017A
Bonds
Face amount of debt				$ 120,000
First Mortgage Obligations, Series 2017A , Tranche 1, 3.34%, due through 2029
Bonds
Face amount of debt				$ 60,000
Credit facility information
Stated interest rate (as a percent)				3.34%
First Mortgage Obligations, Series 2017A, Tranche 2, 3.39%, due December 12, 2029
Bonds
Face amount of debt				$ 60,000
Credit facility information
Stated interest rate (as a percent)				3.39%
Revolving Credit Agreement
Credit facility information
Maximum borrowing capacity		750,000
Outstanding borrowings		0	$ 0
Available borrowing capacity		560,000
2018 Revolving Credit Agreement
Credit facility information
Maximum borrowing capacity	$ 650,000
Commercial Paper | Revolving Credit Agreement
Credit facility information
Available borrowing capacity		$ 310,000

LONG-TERM DEBT - Components (De

LONG-TERM DEBT - Components (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Long-term debt, components
Total debt	$ 3,193,682	$ 3,211,421
Less debt issuance costs	(21,217)	(21,720)
Less debt discounts	(10,306)	(10,360)
Plus debt premiums	18,539	18,949
Total debt adjusted for debt issuance costs, discounts and premiums	3,180,698	3,198,290
Less current maturities	(97,929)	(78,004)
Long-term debt	$ 3,082,769	$ 3,120,286

LONG-TERM DEBT - Interest Rate

LONG-TERM DEBT - Interest Rate Swaps (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Oct. 31, 2017	Oct. 12, 2017
Interest rate swaps
Regulatory Liabilities	$ 85,815	$ 81,824
Interest Rate Swap - June 2016
Interest rate swaps
Notional Amount	$ 80,000
Fixed Rate	2.304%
Benchmark Interest Rate	30 year - LIBOR
Effective Date	Jun. 1, 2019
Maturity Date	Jun. 1, 2049
First Mortgage Obligations, Series 2017A , Tranche 1, 3.34%, due through 2029
Interest rate swaps
Term of issuance	12 years
Interest rate swaps, realized gain
Interest rate swaps
Regulatory Liabilities	$ 4,559	$ 4,614	$ 4,600
Interest rate swaps, realized gain | Interest Rate Swap - April 2016
Interest rate swaps
Regulatory Liabilities				$ 4,600

SHORT-TERM BORROWINGS (Details)

SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Short-term borrowings
Amount outstanding	$ 189,335	$ 144,667
Commercial Paper
Short-term borrowings
Maximum amount per commercial paper sublimit	500,000
Amount outstanding	$ 189,335	$ 144,667
Weighted average interest rate	1.95%	1.52%
Commercial Paper | Maximum
Short-term borrowings
Term of issuance	397 days
Revolving Credit Agreement
Short-term borrowings
Available borrowing capacity	$ 560,000
Revolving Credit Agreement | Commercial Paper
Short-term borrowings
Available borrowing capacity	$ 310,000

ASSET RETIREMENT OBLIGATIONS (D

ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Aggregate carrying amounts of asset retirement obligations
Asset retirement obligation at beginning of period	$ 56,855
Liabilities settled	(1,050)
Accretion expense	1,571
Change in cash flow estimate	(560)
Asset retirement obligation at end of period	56,816
Less current asset retirement obligations	(2,999)	$ (3,087)
Long-term asset retirement obligations at end of period	$ 53,817	$ 53,768

OTHER DEFERRED CREDITS AND OT50

OTHER DEFERRED CREDITS AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Deferred credits and other liabilities
Transmission easements	$ 21,337	$ 21,337
Contract liabilities (unearned revenue) - noncurrent	6,560	6,673
Customer deposits	2,690	2,898
Other	21,688	22,488
Total other deferred credits and other liabilities	52,275	53,396
Transmission Right of Way Easements
Deferred credits and other liabilities
Total due for easement right of way	34,500
Other Deferred Credits and Other Liabilities | Transmission Right of Way Easements
Deferred credits and other liabilities
Transmission easements	$ 21,300	$ 21,300

EMPLOYEE BENEFIT PLANS - Postre

EMPLOYEE BENEFIT PLANS - Postretirement Benefits Other Than Pensions, Plans, Amendments and Obligations (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)plan
Postretirement medical benefit and postemployment medical benefit obligations
Threshold percentage, unrecognized amount of actuarial gains and losses as a percentage of projected benefit obligation	10.00%
Medical Plans
Postretirement medical benefit and postemployment medical benefit obligations
Total postretirement and/or postemployment medical obligations at end of period	$ 8,942
Postretirement Medical Benefit Plans
Postretirement medical benefit and postemployment medical benefit obligations
Postretirement medical benefit obligation at beginning of year	8,455
Service cost	152
Interest cost	71
Benefit payments (net of contributions by participants)	(103)
Total postretirement and/or postemployment medical obligations at end of period	8,575
Postemployment Medical Benefit Plans
Postretirement medical benefit and postemployment medical benefit obligations
Total postretirement and/or postemployment medical obligations at end of period	$ 367
Non-bargaining unit employees | Medical Plans
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Number of plans | plan	3
Non-bargaining unit employees | Medical Plans | Maximum
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Qualifying age	65 years
Non-bargaining unit employees | Postretirement Medical Benefit Plans
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Number of plans | plan	2
Non-bargaining unit employees | Postretirement Medical Benefit Plans | Minimum
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Qualifying age	55 years
Non-bargaining unit employees | Postemployment Medical Benefit Plans
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Number of plans | plan	3

EMPLOYEE BENEFIT PLANS - Post52

EMPLOYEE BENEFIT PLANS - Postretirement Benefits Other Than Pensions, Actuarial Gains and Losses, and Assumptions (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)
Net unrecognized actuarial gains and losses related to the postretirement medical benefit obligation are included in accumulated other comprehensive income
Amounts included in accumulated other comprehensive income at beginning of year	$ (369)
Amortization of prior period cost into other income (expense)	(20)
Amounts included in accumulated other comprehensive income at end of year	$ (389)

REVENUE - Member (Details)

REVENUE - Member (Details)	3 Months Ended
	Mar. 31, 2018itemcustomer
Member electric sales
Number of billing components of Class A rate schedule for electric power sales to Members | item	2
Member Contracts Extending Through 2050
Member electric sales
Number of contracts	42
Member Contracts Extending Through 2040
Member electric sales
Number of contracts	1

REVENUE - Non-member (Details)

REVENUE - Non-member (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)contract	Mar. 31, 2017USD ($)
Disaggregation of revenue
Other	$ 12,300	$ 20,856
Revenues	318,508	338,429
Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of revenue
Other		12,172
Non-member electric sales and other operating revenue
Disaggregation of revenue
Revenues	29,162
Non-member electric sales and other operating revenue | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of revenue
Revenues		56,014
Non-member electric sales
Disaggregation of revenue
Revenue from contract with customer	16,862	35,158
Non-member electric sales | Long-term contracts
Disaggregation of revenue
Revenue from contract with customer	$ 11,943
Number of contracts | contract	2
Non-member electric sales | Long-term contracts | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of revenue
Revenue from contract with customer		21,120
Non-member electric sales | Short-term contracts
Disaggregation of revenue
Revenue from contract with customer	$ 4,919
Non-member electric sales | Short-term contracts | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of revenue
Revenue from contract with customer		6,538
Deferred non-member electric sales | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of revenue
Revenue from contract with customer		7,500
Coal Sales | Calculated under Revenue Guidance in Effect before Topic 606
Disaggregation of revenue
Revenue from contract with customer		$ 8,684

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
INCOME TAXES
Income tax benefit	$ 151	$ 302

FAIR VALUE (Details)

FAIR VALUE (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018USD ($)	Dec. 31, 2016instrument	Dec. 31, 2017USD ($)	Oct. 31, 2017instrument	Oct. 12, 2017instrument
Principal Amount
Fair value:
Marketable securities	$ 806		$ 1,007
Long-term debt	3,193,682		3,211,421
Estimated Fair Value
Fair value:
Cash and cash equivalents	80,200		109,400
Estimated Fair Value | Level 2
Fair value:
Long-term debt	3,464,617		3,600,650
Estimated Fair Value | Recurring | Level 1
Fair value:
Marketable securities	$ 923		$ 1,166
First Mortgage Obligations, Series 2017A , Tranche 1, 3.34%, due through 2029
Fair value:
Term of issuance	12 years
Interest rate swaps
Fair value:
Number of instruments entered into | instrument		2
Number of instruments settled | instrument				1	1

VARIABLE INTEREST ENTITIES - Co

VARIABLE INTEREST ENTITIES - Consolidated Entities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Consolidated Variable Interest Entities
Noncontrolling interest included in consolidated statements of financial position (in dollars)	$ 109,234		$ 111,295
Interest expense (in dollars)	$ 38,021	$ 36,349
Primary Beneficiary | Springerville Partnership
Consolidated Variable Interest Entities
Equity interest (as a percent)	51.00%
General partner interest (as a percent)	1.00%
Ownership interest held by noncontrolling interest (as a percent)	49.00%		49.00%
Noncontrolling interest included in consolidated statements of financial position (in dollars)	$ 109,200		$ 111,300
Springerville Partnership | Springerville Unit 3 Holding LLC
Consolidated Variable Interest Entities
Ownership interest held by parent (as a percent)	100.00%
Springerville Partnership | Primary Beneficiary
Consolidated Variable Interest Entities
Depreciation and amortization (in dollars)	$ 4,500	5,300
Interest expense (in dollars)	7,300	$ 7,200
Springerville Partnership | Primary Beneficiary | Electric Plant
Consolidated Variable Interest Entities
Assets of variable interest entity included in consolidated statements of financial position (in dollars)	808,100		812,700
Springerville Partnership | Primary Beneficiary | Long-term debt
Consolidated Variable Interest Entities
Liabilities of variable interest entity included in consolidated statements of financial position (in dollars)	417,200		431,300
Springerville Partnership | Primary Beneficiary | Accrued interest included in long-term debt
Consolidated Variable Interest Entities
Liabilities of variable interest entity included in consolidated statements of financial position (in dollars)	$ 4,800		$ 12,400
Springerville Partnership | Primary Beneficiary | Springerville Unit 3 Lease
Consolidated Variable Interest Entities
Percentage of financial and other support provided	100.00%

VARIABLE INTEREST ENTITIES - Un

VARIABLE INTEREST ENTITIES - Unconsolidated Entities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Unconsolidated Variable Interest Entities
Investment in other associations	$ 144,632	$ 143,608
Western Fuels Association | Unconsolidated Variable Interest Entity - not primary beneficiary | Investments in other associations
Unconsolidated Variable Interest Entities
Investment in other associations	$ 2,300	2,300
MBPP
Unconsolidated Variable Interest Entities
Tri-State share (as a percent)	24.13%
WFW | Western Fuels Association | Class AA shares
Unconsolidated Variable Interest Entities
Ownership interest held by parent (as a percent)	100.00%
WFW | Western Fuels Association | Class BB Shares
Unconsolidated Variable Interest Entities
Ownership interest held by parent (as a percent)	75.00%
WFW | MBPP | Class BB Shares
Unconsolidated Variable Interest Entities
Ownership interest held by noncontrolling interest (as a percent)	25.00%
MBPP | Unconsolidated Variable Interest Entity - not primary beneficiary
Unconsolidated Variable Interest Entities
Tri-State share (as a percent)	24.13%
Trapper Mining | Unconsolidated Variable Interest Entity - not primary beneficiary
Unconsolidated Variable Interest Entities
Investment in coal mine	$ 15,100	$ 15,000
Tri-State share (as a percent)	26.57%

LEGAL - Las Conchas Fire (Detai

LEGAL - Las Conchas Fire (Details) - Damages from Las Conchas fire $ in Millions	Oct. 28, 2015	Jun. 30, 2011plaintiff	Mar. 31, 2018USD ($)
Litigation information
Number of plaintiff groups | plaintiff		6
Pending litigation
Litigation information
Percentage negligent	20.00%
Liability insurance coverage | $			$ 100
Pending litigation | JMEC
Litigation information
Percentage negligent	75.00%
Pending litigation | United States Forest Service
Litigation information
Percentage negligent	5.00%

LEGAL - Other Legal (Details)

LEGAL - Other Legal (Details) - Another utility company	3 Months Ended
	Mar. 31, 2018MW
Term of contract	30 years
Amount of capacity sold (in megawatts)	25