v3.26.1
LEASES
 3 Months Ended
Mar. 31, 2026
Leases [Abstract]  
LEASES LEASES
Leasing Arrangements as Lessee
Tri-State determines if an arrangement is a lease upon commencement of the contract. If an arrangement is determined to be a long-term lease (greater than 12 months), Tri-State recognizes a right-of-use asset and lease liability based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of Tri-State's leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Tri-State's lease terms may also include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Right-of-use assets are included in other deferred charges, the current portion of lease liabilities is included in accrued expenses and the long-term portion of lease liabilities is included in other deferred credits and other liabilities on Tri-State's consolidated statements of financial position.
Tri-State has elected to apply the short-term lease exception for contracts that have a lease term of twelve months or less and do not include an option to purchase the underlying asset. Therefore, Tri-State does not recognize a right-of-use asset or lease liability for such contracts. Tri-State recognizes short-term lease payments as expense on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or rate are recognized as expense.
Operating Leases
Tri-State has lease agreements as lessee for the right to use various facilities and operational assets. Rent expense for all short-term and long-term operating leases was $0.7 million for the three months ended March 31, 2026 and $1.8 million for the comparable period in 2025. Rent expense is included in various categories of operating expenses on Tri-State's consolidated statements of operations based on the type and purpose of the lease.
Tri-State's consolidated statements of financial position include the following lease components (dollars in thousands):
March 31,
2026		December 31,
2025
Operating leases:
Operating lease right-of-use assets$13,886 $13,807 
Less: Accumulated amortization(3,230)(2,874)
Net operating lease right-of-use assets$10,656 $10,933 
Operating lease liabilities - current$(713)$(803)
Operating lease liabilities - noncurrent(6,390)(6,473)
Total operating lease liabilities$(7,103)$(7,276)
Finance leases:
Finance lease right-of-use assets$— $95 
Less: Accumulated amortization— (73)
Net finance lease right-of-use assets$— $22 
Finance lease liabilities - current$— $(13)
Finance lease liabilities - noncurrent— — 
Total finance lease liabilities$— $(13)
Lease Term and Discount Rate:
Weighted-average remaining lease term (in years)
Operating leases27.126.9
Finance leases00.5
Weighted-average discount rate
Operating leases6.82 %6.82 %
Finance leases—%6.99%
Future expected minimum lease commitments under operating leases are as follows (dollars in thousands):
Operating Leases
Year 1$1,389 
Year 2788 
Year 3716 
Year 4616 
Year 5530 
Thereafter11,931 
Total lease payments$15,970 
Less imputed interest(8,867)
Total$7,103 
Energy Storage Agreements
Tri-State has entered into agreements for 500 MWs of electrical storage capacity with estimated commercial operation dates starting from 2027 to 2030 and terminating by 2052. These agreements include a fixed monthly capacity price for the right to use the storage capacity of the facilities and are expected to be accounted for as leases. Total undiscounted lease payments over the agreements' terms are estimated to be $1.6 billion.
Leasing Arrangements as Lessor
Tri-State has lease agreements as lessor primarily for certain combustion turbine units. The revenue from these lease agreements of $11.1 million and $7.3 million for the three months ended March 31, 2026 and 2025 are included in other operating revenue on Tri-State's consolidated statements of operations.
Tri-State has entered into tolling agreements with third parties related to certain combustion turbine units, including at Knutson, Limon and Pyramid Generating Stations, for all capacity and energy through the operation of the contracted units. One such agreement commenced in January 2026. In substance these agreements were determined to be leases.
The lease arrangement with the Springerville Partnership is not reflected in Tri-State's lease right right-of-use asset or liability balances as the associated revenues and expenses are eliminated in consolidation. See Note 18 - Variable Interest Entities. However, as the non-controlling interest associated with this lease arrangement generates book-tax differences, a deferred tax asset and liability have been recorded.
LEASES LEASES
Leasing Arrangements as Lessee
Tri-State determines if an arrangement is a lease upon commencement of the contract. If an arrangement is determined to be a long-term lease (greater than 12 months), Tri-State recognizes a right-of-use asset and lease liability based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of Tri-State's leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Tri-State's lease terms may also include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Right-of-use assets are included in other deferred charges, the current portion of lease liabilities is included in accrued expenses and the long-term portion of lease liabilities is included in other deferred credits and other liabilities on Tri-State's consolidated statements of financial position.
Tri-State has elected to apply the short-term lease exception for contracts that have a lease term of twelve months or less and do not include an option to purchase the underlying asset. Therefore, Tri-State does not recognize a right-of-use asset or lease liability for such contracts. Tri-State recognizes short-term lease payments as expense on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or rate are recognized as expense.
Operating Leases
Tri-State has lease agreements as lessee for the right to use various facilities and operational assets. Rent expense for all short-term and long-term operating leases was $0.7 million for the three months ended March 31, 2026 and $1.8 million for the comparable period in 2025. Rent expense is included in various categories of operating expenses on Tri-State's consolidated statements of operations based on the type and purpose of the lease.
Tri-State's consolidated statements of financial position include the following lease components (dollars in thousands):
March 31,
2026		December 31,
2025
Operating leases:
Operating lease right-of-use assets$13,886 $13,807 
Less: Accumulated amortization(3,230)(2,874)
Net operating lease right-of-use assets$10,656 $10,933 
Operating lease liabilities - current$(713)$(803)
Operating lease liabilities - noncurrent(6,390)(6,473)
Total operating lease liabilities$(7,103)$(7,276)
Finance leases:
Finance lease right-of-use assets$— $95 
Less: Accumulated amortization— (73)
Net finance lease right-of-use assets$— $22 
Finance lease liabilities - current$— $(13)
Finance lease liabilities - noncurrent— — 
Total finance lease liabilities$— $(13)
Lease Term and Discount Rate:
Weighted-average remaining lease term (in years)
Operating leases27.126.9
Finance leases00.5
Weighted-average discount rate
Operating leases6.82 %6.82 %
Finance leases—%6.99%
Future expected minimum lease commitments under operating leases are as follows (dollars in thousands):
Operating Leases
Year 1$1,389 
Year 2788 
Year 3716 
Year 4616 
Year 5530 
Thereafter11,931 
Total lease payments$15,970 
Less imputed interest(8,867)
Total$7,103 
Energy Storage Agreements
Tri-State has entered into agreements for 500 MWs of electrical storage capacity with estimated commercial operation dates starting from 2027 to 2030 and terminating by 2052. These agreements include a fixed monthly capacity price for the right to use the storage capacity of the facilities and are expected to be accounted for as leases. Total undiscounted lease payments over the agreements' terms are estimated to be $1.6 billion.
Leasing Arrangements as Lessor
Tri-State has lease agreements as lessor primarily for certain combustion turbine units. The revenue from these lease agreements of $11.1 million and $7.3 million for the three months ended March 31, 2026 and 2025 are included in other operating revenue on Tri-State's consolidated statements of operations.
Tri-State has entered into tolling agreements with third parties related to certain combustion turbine units, including at Knutson, Limon and Pyramid Generating Stations, for all capacity and energy through the operation of the contracted units. One such agreement commenced in January 2026. In substance these agreements were determined to be leases.
The lease arrangement with the Springerville Partnership is not reflected in Tri-State's lease right right-of-use asset or liability balances as the associated revenues and expenses are eliminated in consolidation. See Note 18 - Variable Interest Entities. However, as the non-controlling interest associated with this lease arrangement generates book-tax differences, a deferred tax asset and liability have been recorded.