Coalition of Ratepayers

Tri-State Charts Own Course: Angers Democrats and Delta-Montrose

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Tri-State Generation and Transmission Association released a statement on Tuesday indicating its move to become regulated by the Federal Energy Regulatory Commission (FERC).

This decision has drawn harsh criticism from Colorado legislators and Delta-Montrose Electric Association (DMEA). Democrat state legislators are urging Tri-State to slow down and reconsider the decision, since it was only two months ago that the legislature passed a bill (SB19-236) that requires Tri-State to submit its energy resource plans to the Public Utilities Commission (PUC). According to Tri-State’s statement, FERC regulation will not affect how it complies with Colorado’s carbon reduction and renewable energy regulations. However, according to Bloomberg Environment, Democrats are concerned about the potential for FERC regulation preempting it from the state’s carbon emission goals.

Delta-Montrose Electric is concerned and upset about how FERC regulation will impact its decision to separate from Tri-State. Jasen Bronec, CEO of DMEA, said in a press release that he believes Tri-State’s decision to pursue FERC oversight is simply a way to undermine DMEA’s separation case before the PUC. After all, if Tri-State is successful, DMEA’s separation case will have to start over and be heard by federal officials. DMEA has filed a temporary restraining order in Adams County District Court to try and stop Tri-State from getting out from under PUC jurisdiction.

Criticisms aside, Tri-State has a fiduciary duty to its members, and its desire for stable rates isn’t unwarranted. Colorado has decided to relentlessly pursue progressive environmental policies. Democrat leadership in the Senate, House, and Governor’s Office have made reducing carbon emissions a major priority. So much so, they were willing to codify Xcel Energy’s plan to reduce its carbon footprint 80 percent by 2030 and 100 percent by 2050, scorning at the idea that the Public Utilities Commission is a neutral governing body.

In the past, Tri-State was exempt from FERC oversight because it was wholly owned by electric cooperatives. However, at the board meeting in July, Tri-State executives decided to incorporate new members that will eliminate its federal oversight exemption. Chairman Rick Gordan made it clear that he believes members will benefit immensely from the efficiency gained by a single rate regulator (i.e., FERC), and that the utility will continue building a cleaner generation portfolio.

The Coalition of Ratepayers remains committed to supporting DMEA’s desire for autonomy. However, we also believe Tri-State has a right to self-determination as well.

If DMEA is upset with Tri-State, maybe it should shift its gaze to the Gold Dome and Colorado’s regulatory agencies. Democrats made sure Tri-State knew it was under scrutiny and amended SB 236 to ensure it would be regulated by the PUC. Moreover, the PUC made sure that Tri-State understood that even if Democrats failed to pass legislation authorizing oversight, it would start scrutinizing and looking into the wholesale power supplier’s business dealing on its own.

This is the background information often overlooked or disregarded when criticizing Tri-State for wanting to be regulated by FERC. Time will tell whether FERC oversight impacts Tri-State’s compliance with Colorado’s carbon emission reduction goals and clean energy regulations. But one thing is for certain, Tri-State decided to chart its own course and stand up to those Colorado Democrats ramming through progressive environmental bills. As a wholesale power supply cooperative serving members in four states, it should be able to decide the course of action that serves its interests the best. And for that, the Coalition of Ratepayers applauds Tri-State’s decision to move forward in pursuing FERC oversight.

Becker, Winter to Give Xcel a Blank Check

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Representative K.C. Becker and Senator Faith Winter have introduced legislation that would give Xcel Energy a green light and blank check to prematurely close existing power plants, replace them with expensive, intermittent resources, and then force captive electric ratepayers to pick up the tab with interest for the massive fuel switching scheme and workforce transition plans.

HB19-1313 “Electric Utility Plans to Further Reduce Carbon Dioxide Emission” is a blank check for Xcel – and only Xcel – because it applies solely to utilities that serve 500,000 or more ratepayers. Other utilities can “opt-in” to financially ravaging their customers. According to the bill summary:

A utility implementing a clean energy plan may recover its costs of implementation through rates, as approved by the PUC [Public Utilities Commission], and own any generating resources and infrastructure necessary to effectuate the plan.

We’ve seen this before, and it won’t end well for ratepayers as evidenced by our intervention in the Colorado Energy Plan (CEP), which we fought at the PUC. The monopoly utility is more than willing to build and build and build so it can fuel switch to utility-scale wind, solar, and batteries (which don’t really exist yet) at the expense of Colorado ratepayers.

Instead of saving ratepayers money, the Coalition proved that the CEP will cost them hundreds of millions of dollars. Further, we found Xcel’s modeling errors, which PUC staff did not.

Xcel can already file such plans with the PUC and has released a vision to reduce its carbon emissions 80 percent by 2030 and be 100 percent carbon-free by 2050. Hence, legislative direction is superfluous, and this bill should only be viewed as another avenue the Democrats are willing to travel in their attempt to reorder society through legislation.

Make no mistake; this bill will impact all Colorado residents – especially the state’s lower-income communities and those with static incomes, who in many cases are the elderly. In fact, AARP is against HB19-1313 because the organization understands an unnecessary increase in energy rates only harms its members and takes away their ability to spend money on necessary, more important matters.

If HB19-1313 passes, customers who cannot choose their electricity provider will pay for worker re-training programs and compliance costs, which will include building new generation capacity, storage capacity, and any new transmission and distribution lines.

This won’t be cheap. Utility bills will go up. Captive Xcel Energy customers are searching for a friend at the state capitol because it isn’t Speaker Becker or Senator Winter. We can’t afford to let the legislature give the monopoly a blank check.

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.

Imagine 1500 feet of (electrical) freedom…

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By Brit Naas and Amy Cooke

What if we could break free from the massive transmission lines and power plants and the utility-scale wind farms that are hundreds of miles away? It’s not impossible. From cryptocurrency to ride and home sharing companies, decentralized and sharing economy platforms are altering sectors in a way that was unfathomable twenty years ago. 

We at the Independence Institute believe the power industry is about to see a similar renaissance, as companies like LO3 Energy work to make residential microgrids a reality – where neighbor-to-neighbor transactions occur with regularity. 

As with any change – whether cultural or economic – movement away from the status quo usually doesn’t happen overnight. This is especially true for the power industry. For nearly a century, private, for-profit regulated monopolies have dominated the electricity sector, reaping in billions of dollars for their shareholders courtesy of captive ratepayers.  

Theoretically, Colorado’s Public Utilities Commission and our state legislature serve as watchdogs over these for-profit monopolies. Publicly traded monopoly corporations are guaranteed a profit for their “just and reasonable” rates to provide service to ratepayers, who have no choice in their electricity providers. Monthly utility bills, sometimes larded up with additional fees for unnecessary corporate expansion, have become more of a wealth transfer system between captive customers and corporations’ shareholders. 

Obviously, monopoly utilities do not yield this privileged position voluntarily. From Tri-State Generation and Transmission to Xcel Energy, they are notorious for their efforts to resist change that could lower or even eliminate their guaranteed profit margins.  

Delta-Montrose, a rural electric cooperative that services Montrose, Delta, and Gunnison counties, is currently trying to withdraw from Tri-State because its members want the freedom to determine the type of sources that generate their electricity. It had hoped the process would have been nonconfrontational and fair for both parties, but Tri-State is resisting and has asserted that the co-op cannot withdraw. Not only is Tri-State’s position most likely illegal, it is also subversive to Delta-Montrose’s members’ autonomy and self-determination. 

Xcel, Colorado’s largest electric utility, is the glaring case study of how our centralized electricity generation and distribution business model is a disservice to customers and a financial windfall to the monopoly. 

It has been wildly successful at lining its shareholder’s pockets by appealing to the renewables-at-any-cost crowd. Self-described environmentalists such as the Sierra Club, Western Resource Advocates, and Conservation Colorado have formed an unholy alliance with Xcel. 

These special interest groups with their own deep pockets and a myopic view of utility-scale wind and solar have aided and abetted Xcel’s unjust enrichment at the expense of innovation, free markets, the environment, and most importantly – those of us paying the bills, otherwise known as ratepayers. 

Protected by an army of lobbyists, government officials, and entrenched interest groups, any hint of reform with the potential to threaten Xcel’s stranglehold on its 1.4 million captive ratepayers is met with open hostility and blatant lies. Despite the plethora of money-saving pledges, have your rates gone down? Furthermore, Xcel has used the “unholy alliance” to strengthen its financial and monopoly position. 

Depending on need and political will, Xcel has used its position either to circumvent the Public Utilities Commission by going directly to the state legislature, or to circumvent the state legislature by going directly to the Public Utilities Commission. 

It’s a clever strategy but not fool-proof for Xcel and its sycophants. Not all legislators are enamored with Xcel’s lying and bullying to protect its financial gravy train. In the 2018 session, a bipartisan group of legislators led by Senator Steve Fenberg (D-Boulder) showed a willingness to chip away at the monopoly’s stranglehold as one of the first states to pass a “right to store” bill (SB18-009). With Governor John Hickenlooper’s signature, Xcel residential customers now have an option to store their own electricity free from the monopoly’s interference.  

This brings us back to the idea of 1500 feet of freedom. We urge those same courageous lawmakers to craft and pass legislation that will allow individuals to buy or sell power produced and/or stored within 1500 feet of them without regulatory and monopoly interference. 

Let’s say a business owns a mini solar garden or a natural gas generator, but it doesn’t need all of the power it can produce. That business could contract with a neighboring business to sell its excess power. Assuming they comply with all local building codes, the contract is between the two businesses free from PUC or Xcel interference. This would also work for neighbors. One neighbor may invest in solar panels while the next-door neighbor invests in battery storage. They decide to share the power and capital costs. All of this happens without regulatory or utility meddling. 

We believe a commercial or residential customer should be able to use the electricity they’re producing and storing as they see fit. This could mean using it themselves or selling it to those within 1500 feet of them.

As evidenced by an experiment conducted by the Brooklyn Microgrid in 2016, we have the technological ability to trade electricity via a peer-to-peer model. Three years ago, two participants in the Brooklyn Microgrid completed the project’s first peer-to-peer, or in this case, neighbor-to-neighbor transaction. One had solar panels that produced excess energy, the other wanted to purchase that excess energy. There was no middleman, just two neighbors who agreed upon a price and completed the deal.  

According to the Brooklyn Microgrid’s website, this first transaction was a “sandbox experiment.” However, this year, the Brooklyn Microgrid is going live, and both the sellers and buyers are going to experience energy choice. 

The technology is there, and 1500 feet of freedom puts innovation over regulation. It could reduce the need for behemoth-sized power plants and the hundreds of miles of transmission lines that go along with them. It could put money in individuals’ pockets rather than just corporate executives and shareholders. And it would put individuals in charge of power production and usage. 

Now is the time to unshackle ratepayers from the confines of a centralized grid and monopoly utility and propel the power industry into the twenty-first century.