How does TFPT.exe find what workspace to work in?

I ran into this same issue, I found the answer at the bottom of the page in one of the help files that came with The power tools. (TFPTCommandLineTool.mht)

Errors

TFPT Error: Unable to determine the workspace

When running tfpt using a command that works with Version Control, you may receive one of the errors:

Unable to determine the workspace 
Unable to determine the source control server

Solutions:

• Run tfpt.exe from within a directory that is already mapped to Team Foundation source control.
• Update your local workspace cache using the tf workspaces command. The tf.exe tool is available in the subfolder Common7\IDE of your Visual Studio installation folder. If you launch a Visual Studio command prompt, you can then run the following command (which depends on your versions of TFS/VisualStudio – you should use the version that matches version of TFPT you are using, e.g. if you have TFPT for VS2015, use TF from a VS2015 command prompt):
  • VS 2008-2013 / TFS 2008:
    • tf workspaces /s:serverURL
  • VS 2010-2013 / TFS 2010 (and probably later versions as well):
    • tf workspaces /collection:collectionURL
  • VS 2008 / TFS 2010 (and probably later versions as well):
    • tf workspaces /s:collectionURL
• If you have recently installed Visual Studio 2012, you might have to connect it to the same TFS server/collection you were using in Visual Studio 2010.