Coalition of Ratepayers

The Coalition’s Testimony in Support of SB19-053: California Motor Vehicle Emission Standards

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Last Thursday, the Coalition testified in support of Senate Bill 53. The following text is the transcript of the Coalition’s testimony.

Good afternoon, Senator Fields and fellow committee members. My name is Britton Naas, and I’m here representing the Coalition of Ratepayers in support of Senator Cooke’s bill. 

The Coalition of Ratepayers is a Colorado non-profit concerned with issues that impact small businesses and residential ratepayers. 

First, we acknowledge and agree with those who have already testified in support of the bill. However, we are here to address the issue from a different consumer’s perspective – that of Colorado’s electric ratepayers. We believe that if this bill isn’t passed, Colorado’s low-income electric customers will have to pay the price. 

While former Governor Hickenlooper issued his Low Emission Vehicle (LEV) standard last summer, he chose not to include a Zero Emission Vehicle (ZEV) mandate. However, he did address ZEVs and many stakeholders suspected one would be coming if Jared Polis was elected. Within two weeks of being sworn into office, Governor Polis issued an executive order that initiated the rule making process for a ZEV mandate. What was the Gov. Polis’s reasoning? Apparently, a bunch of people who testified in favor of Governor Hickenlooper’s executive order on LEVs also voiced their support for a zero-emission vehicle mandate. 

Currently, electric vehicles make up only 1 percent of Colorado’s total vehicle registrations. Mandating a massive increase in the number of ZEVs on the road will require low income Coloradans to pay for the cars and the additional infrastructure needed to accommodate the ZEVs. 

But a build out of charging stations won’t be enough, since high demand charges accompany direct-current fast-charging stations, the type of station that can completely re-charge a battery in 30 minutes. According a Reuters article, a high demand charge coupled with the price of the actual energy can cost someone $70 to $110 per charging session at a direct-current fast-charging station.

If the initial, upfront cost of an electric vehicle doesn’t turn away prospective buyers, this most certainly will.   

There is of course, a costly solution: equip each station with enough storage capacity. The batteries can be charged at a steady pace during the low demand periods of the day, and then the energy stored can be used to charge EVs. This will decrease or avoid the demand charge, but it will also increase the construction cost of each charging station, which ultimately raises the amount paid by each ratepayer. 

There has not been enough vetting of how much all of this, Regulation 20 and the ZEV mandate, will cost auto dealers, buyers and electricity ratepayers. Before we mandate anything, we should have a cost and we don’t. We just know it will be expensive. 

We applaud Senator Cooke for bringing this bill forward and hope the committee will take a favorable approach to it.

Thank you. 

The Coalition of Ratepayers Supports the Right of Self-Determination

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The Coalition of Ratepayers submitted the following letter to the Public Utilities Commission in support of the Delta-Montrose Electric Association’s decision to withdraw from the Tri-State Generation and Transmission Association, Inc. The link to the PDF version of the letter can be found at the bottom of the page.  

Commissioners,

The Coalition of Ratepayers submits this letter of support for Delta-Montrose Electric Association (DMEA) in its attempt to withdraw from Tri-State Generation and Transmission Association, Inc. Further, the Coalition urges the Public Utilities Commission to set a withdrawal rate that is fair to both Tri-State and DMEA.  

The Coalition urges the Commission to consider this request in light of Tri-State’s actions, which reject individual autonomy and self-determination, are prohibited by public utility law, and are discriminatory as well as a predatory. 

DMEA members understand what is at stake and take responsibility for the outcome that may result from breaking with Tri-State. For better or worse, DMEA and the communities it serves want the ability, nay the responsibility, to choose their generation portfolio. Member owned and operated, rural electric cooperatives are unique in that the individuals served ultimately make the business decisions. Tri-State’s refusal undermines and attacks not only DMEA’s personal and economic freedom, but the personal and economic freedom of all the rural-electric cooperatives it serves. 

Tri-State claims to support freedom of association with a “core principle” of “voluntary and open membership,” but in action, rejects it. Tri-State says, “everything we do is member-driven and member-focused.” If Tri-State actually held these beliefs, it would have voluntarily approved a fair exit charge and not have stated in its legal filings that members have “no affirmative right to withdraw.”

The Coalition believes public utilities law prohibits Tri-State’s actions and that it is being discriminatory and predatory. In 2016, Tri-State allowed one of its New Mexico cooperatives, which had the same power contract as DMEA, to withdraw after paying a “fair” exit charge. Three years later, Tri-State asserts it can prevent any withdrawal and is unilaterally setting abusive charges. 

The Coalition stands by DMEA and its members’ right to self-determination in electric generation and hopes the Commission will set an exit charge that is fair to both parties. 

Moreover, the Coalition of Ratepayers supports the city of Boulder’s efforts at municipalization.

According to the city’s website, it decided to consider and explore the option of creating a local electric utility because of its “carbon-intensive” power supply. Although the Coalition of Ratepayers will refrain from commenting on Boulder’s reasoning, it does support the city’s desire for autonomy and self-determination — much like how it supports Delta-Montrose’s decision to withdraw from Tri-State.

Whether it’s member or voter-approved, the Coalition of Ratepayers will support the efforts of those who want the freedom to choose their energy mix.

Coalition of Ratepayers LetterDownload

Ratepayers need a voice; elect PUC commissioners

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The following article was written by Amy Cooke in response to the Public Utilities Commission’s ruling regarding the Coalition of Ratepayers’ request for attorney and expert witness fees.

While disappointed, the Coalition of Ratepayers isn’t surprised that the commissioners at the Colorado Public Utilities Commission denied us any and all financial relief even though the Coalition clearly met all criteria and was the only entity in the Colorado Energy Plan proceeding that seriously challenged Xcel’s “too good to be true” promise of new renewable energy at no cost to ratepayers.  

The Coalition is incredibly proud of the work we did and the information we brought forward on behalf of ratepayers. Had it not been for the Coalition, Xcel Energy electricity ratepayers would have been sold the false promise of new energy resources at no additional cost to ratepayers or even below-cost – a claim that Xcel ultimately could not prove and was unable to persuade the Commission was true.  Not only did the Coalition bring to light the numerous hidden costs of the Colorado Energy Plan, it also found an additional $87 million in errors that neither PUC staff nor the Office of Consumer Counsel (OCC) found in their analysis of the CEP. 

Regulatory proceedings are expensive, exclusive, and opaque. The PUC seems to want to keep it that way. The decision to deny ratepayers relief in their efforts to challenge the Xcel’s misleading claims will have a chilling effect going forward, all to the benefit of monopoly utilities.  In light of our experience as outsiders defending ratepayers in the regulatory process, it’s clear that these proceedings are more like Kabuki Theater with predetermined outcomes at ratepayers’ expense. Ratepayers have no voice and no choice. 

No unelected commission of three should have the kind of power the PUC has without some kind of voter say. In order to restore integrity in the process and allow ratepayers a voice, we believe it is in the best interest of Coloradans that they elect their commissioners. Further, since the OCC is no longer interested in representing ratepayers, it should be stripped of that authority or consider an elected ombudsman who acts on behalf of ratepayers. 

Going forward, it will be the Coalition’s goal to reform Colorado’s PUC making it more assessible and welcoming to all ratepayers, regardless of their ability to pay the high cost of entry, and to reshape the OCC so that ratepayers rather than monopolies are its focus.

Don’t be dull, embrace microgrids

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By Casey Freeman

First article in our series about microgrids

Xcel Energy and Black Hills Energy are Colorado’s two regulated electric monopolies. Xcel is the larger of the two and provides retail service to the greater Denver Metro Area, Greeley, and Grand Junction, while Black Hills services Pueblo and the surrounding area. These utilities operate in a regulated market with no competition and provide power to a combined customer base of approximately 1.5 million. Both are Colorado Public Utilities Commission (PUC) regulated, for-profit corporations and award annual dividends to their shareholders.

As Colorado public policy including renewable mandates and fuel switching have driven up electricity rates, there has been substantial concern over how these utilities treat ratepayers, and not without cause. In 2010, Black Hills raised its rates 13 percent, and from 2012 to 2017, increased them an additional three times. Around 7,000 people per year were receiving disconnect notices, and to reconnect, customers must pay the missed bill in full along with a fee and a three-month deposit. The cost can end up being higher than $2,000, which is devastating for the residents of cities like Pueblo where the median household income in 2016 was $35,770 compared to a statewide average of $62,520.

While a reconnecting fee alone is a difficult hurdle to overcome, loss of electricity carries with it much heavier problems like social services breaking apart families, forfeiture of public housing, and the inability to preserve perishable goods. A remedy Black Hills offers is the Black Hills Energy Assistance Program or BHEAP, a program for low-income households in which customers who meet specific income requirements can receive a deduction of $60 from their monthly bill. However, this assistance is at the expense of other customers who are charged a monthly fee to sustain the program.

For ratepayers in Colorado, there is no other option but to endure the service of their electric provider since a regulated market prevents customers from choosing a different company.

Certainly, giving consumers the freedom to choose their own provider is better than being forced into a monopoly utility. But deregulation isn’t without its own problems. For example, the 2002 Texas State Legislature passed a law that deregulated the energy market and allowed competition between electricity providers. It was meant to address the detriments of a regulated energy market. Then Governor George W. Bush summarized his support saying: “Competition in the electric industry will benefit Texans by reducing rates and offering consumers more choices about the power they use.”

Market manipulation in the form of subsidies for preferred energy sources has made the reality of deregulation a bit different than originally hoped. Consumers do enjoy a wider range of choice in energy suppliers, but rates have been more volatile and subject to dramatic increases. Subsidies for renewable energy from both the state and federal government have artificially depressed wholesale intermittent energy prices. As a result, baseload power sources are becoming uneconomical and closing, causing a scarcity in energy supply. This is damaging to ratepayers because in times of scarcity, power providers will raise electric retail rates to prepare for surging wholesale electric rates.

And in the summer of 2018, this was especially problematic. Three coal-fired power plants closed in the spring just ahead of Texas experiencing record-breaking temperatures that caused a dramatic increase in electricity demand during the summer. Wholesale pricing averaged $200/MWh during peak hours, which was a $150 increase from the previous year, and in May, wholesale prices spiked to $1,500/MWh.

Simply put, when power producers chase subsides, baseload power sources close and wholesale electricity prices are more than likely to surge, ultimately increasing retail electric rates and hurting ratepayers.

Does Texas’ failure at deregulation indicate a regulated market structure is the only alternative then? The short answer is no. In addition to the issues that many Colorado ratepayers have to contend with, Dr. Lynne Kiesling, an accomplished author and professor of Economics at Purdue University, believes a regulated energy market “stifles innovation.”

Kiesling makes a compelling argument that America has been using the same business model for over a century, which she believes has resulted in a sector devoid of new ideas on energy generation and usage. Beyond lousy service and rising rates, consumers have little incentive to become personally involved with their energy consumption, and the lack of competition incentivizes utilities to chase bad investments because they’re more profitable than innovation that save ratepayers money.

According to Kiesling, the regulated market has dulled both parties, the customer and the utility, which now seem content with mediocrity.

Currently, there are two options for ratepayers: a regulated or deregulated business model. But as regulated utilities continue to gouge customers and manipulate the market, and wholesale deregulation only seems to offer another bleak outlook, it’s time to look beyond the status quo and embrace innovation.

Could microgrids be the answer? Maybe. Colorado already has experimented with them. Stay tuned for the next article in this series.

Article 2, Article 3, Article 4

Casey Freeman is an intern in the Energy & Environmental Policy Center at the Independence Institute. She is pursuing a bachelor’s degree in political science with a focus on legal studies from the Metropolitan State University of Denver.