New Mexico regulators have put on hold a rate increase for a dozen electric cooperatives that are part of the Tri-State Generation and Transmission Association.
The Public Regulation Commission made its decision Thursday and ordered a hearing.
The commissioners expect a court battle since Tri-State has argued that the commission has no jurisdiction over interstate wholesale power sales.
A Tri-State spokesman says the PRC decision will have a negative effect on the utility's members in New Mexico, Colorado, Nebraska and Wyoming.
Colorado-based Tri-State sells power to 44 electric cooperatives in the four states. It set a 4.9 percent rate increase to take effect on Jan. 1, 2013.
Three New Mexico co-ops protested.
The commission appointed a mediator in November, but the negotiations between Tri-State and the three co-ops failed.