In accordance with the accounting requirements related to regulated operations, some revenues and expenses have been deferred at the discretion of Tri-State's Board, subject to FERC approval, if based on regulatory orders or other available evidence, it is probable that these amounts will be refunded or recovered through future rates. Regulatory assets are costs that Tri-State expects to recover from its Utility Members based on rates approved by the applicable authority. Regulatory liabilities represent probable future reductions in rates associated with amounts that are expected to be refunded to the Utility Members based on rates approved by the applicable authority. Amounts that are no longer expected to be refunded to the Utility Members are recognized in margins. Tri-State recognizes regulatory assets as expenses and regulatory liabilities as operating revenue, other income, or a reduction in expense concurrent with their recovery through rates. Tri-State doesn't earn a rate of return on regulatory items.


	March 31, 2026		December 31, 2025
Regulatory assets
Deferred income tax expense (1)	$	—	$	(254)
Deferred prepaid lease expense – Springerville Unit 3 Lease (2)	69,397		69,970


Deferred debt prepayment transaction costs (3)	87,003		89,160
Deferred Holcomb expansion impairment loss (4)	64,277		65,446
New Horizon Mine environmental obligation (5)	41,878		42,326
Colowyo asset retirement obligation (6)	85,100		79,860
Unrecovered plant (7)	504,054		507,250
Other	76		76
Total regulatory assets	851,785		853,834

Regulatory liabilities
Interest rate swap - realized gain (8)	829		924
Deferred income tax (1)	254		—
Membership withdrawal (9)	5,396		30,236
Withdrawal related transmission credit (10)	313,731		315,786
Formula rate settlement (11)	11,129		11,500
Total regulatory liabilities	331,339		358,446
Net regulatory asset	$	520,446	$	495,388

(2)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.

(4)Represents deferral of the impairment loss related to development costs for the expansion of the Holcomb Generating Station. The regulatory asset for the deferred impairment loss is being amortized to depreciation, amortization and depletion expense in the amount of $4.7 million annually over the 20-year period ending in 2039.

(5)Represents $44.9 million of New Horizon Mine environmental obligation expense that was recognized as a regulatory item in 2023. The regulatory asset for the deferred environmental obligation expense is being amortized to depreciation, amortization and depletion expense in the amount of $1.8 million annually over 25 years ending in 2049.

(6)Represents deferral of the expenses from the Colowyo Mine asset retirement obligation adjustments related to the transition from mining to full reclamation as of October 2025. The regulatory asset for the deferred Colowyo Mine asset retirement obligation expense is being amortized to depreciation, amortization and depletion expense in the amount of $4.5 million annually over 19 years, its original expected useful life, ending in 2044.

(7)Represents deferral of the impairment losses and other closure costs related to the early retirement of the Escalante, Rifle and Craig Generating Station Units 2 and 3. The deferred impairment loss for Escalante Generating Station is being amortized to depreciation, amortization and depletion expense in the amount of $12.2 million annually over the 25-year period ending in December 2045, which was the depreciable life of the Escalante Generating Station. The deferred impairment loss for Rifle Generating Station is being amortized to depreciation, amortization and depletion expense in the amount of $0.6 million annually through December 2028, which was the depreciable life of the Rifle Generating Station. Tri-State recognized the early retirement of Craig Station Units 2 and 3 which resulted in the recognition of an impairment loss of $261.6 million. The impairment loss was deferred in accordance with accounting for rate regulation. The deferred impairment loss will be amortized to depreciation, amortization and depletion expense beginning in October 2028 through 2039 for Craig Generating Station Unit 2 and January 2030 through 2043 for Craig Generating Station Unit 3. The annual amortization is expected to approximate the former annual Craig Generation Station Unit 2 and 3 depreciation for the remaining life of the asset.

(8)Represents deferral of a realized gain of $4.6 million related to the October 2017 settlement of a forward starting interest rate swap. 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 and refunded to the Utility Members through reduced rates when recognized in future periods.

(9) Represents the remaining balance of the deferred recognition of other operating revenues related to the withdrawal of former Utility Members from membership in Tri-State. The deferred membership withdrawal will be refunded to the Utility Members through reduced rates when recognized in operating revenues in future periods with the oldest vintage year first. During the three months ended March 31, 2026, $24.8 million was recognized in operating revenues as part of Tri-State's rate stabilization measures. See Note 13 - Revenue.

(10) Represents the remaining amount of transmission credits from former Utility Members. A portion of a withdrawing member's contract termination payment is allocated to transmission-related debt and is deferred as required by FERC order on Tri-State's Rate Schedule No. 281 (contract termination payment methodology). The transmission credit, plus interest at FERC's prescribed interest rate, is credited on a straight-line amortized basis against the former Utility Member's bill for ongoing transmission service related to Tri-State. If the former Utility Member's transmission bill for a given month is lower than the credit due, the difference is forfeited by the former Utility Member and is recognized in other operating revenues on Tri-State' consolidated statement of operations. Certain elements of the contract termination payment related to the membership withdrawal income and transmission credit remain subject to ongoing proceedings. See Note 19 - Legal.

(11) Represents the settlement amount Tri-State has agreed to in the settlement agreement, which was accepted by FERC in December 2025, related to Tri-State's Class A wholesale rate schedule (A-41) and the unbundling of certain ancillary services with the Utility Members.