Coalition of Ratepayers

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.

The Coalition of Ratepayers Case Study

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The Coalition of Ratepayers is a Colorado non-profit composed of small businesses and individuals. It has been an active party in two electric utility regulatory proceedings: the Rush Creek Wind Farm and the Colorado Energy Plan (CEP). 

The Coalition first intervened against the Rush Creek Wind Farm, and although the Public Utilities Commission (PUC) approved it, the Coalition’s involvement in that case as a PUC recognized party helped set it up to participate in the Colorado Energy Plan (CEP) proceeding, which was larger and more impactful.  

The following study discusses the Coalition and its work in the regulatory sphere, pertaining mainly to the Colorado Energy Plan but also touching on its participation in the Rush Creek Wind Farm case. It also suggests ways to reform the Public Utilities Commission and discloses an avenue the Coalition is exploring that will make intervening more feasible.

As is stated in the report, “Participating in public utility proceedings is not for the faint of heart.” There are many hurdles any party has to contend with, and for new participants, those hurdles seem much higher. As a relatively new party, this was true for the Coalition of Ratepayers, and at the beginning of the CEP, most parties derided and thought very little of it. However, by the end, the Coalition had become Xcel’s chief opponent. Its legal team was exceptional, and its expert witness was fantastic, revealing $87 million worth of errors in Xcel’s modeling and accounting. By the Commissioner’s own statements, the Coalition of Ratepayers had provided much to the proceeding.

The Public Utilities Commission ultimately approved the CEP, but the Coalition was able to disprove Xcel’s claims that it was a money saving plan.

Therefore, while it may be difficult to participate in regulatory proceedings and combat the ever-encroaching bureaucracy, it is essential. We hope our case study can be a resource to groups that go against Colorado’s or any state’s regulatory regime. 

Coalition of Ratepayers Case StudyDownload

Club 20 and its due diligence

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After a little due diligence, Club 20, the long-time “Voice of the Western Slope,” revised its position on Xcel Energy’s Colorado Energy Plan from “support” to “neutral” on Xcel Energy’s Colorado Energy Plan (CEP) according to a letter it sent to the Colorado Public Utilities Commission last November. Originally, the Western Slope’s premiere “coalition of counties, communities, businesses, & individuals” supported the plan.

The CEP is a massive $2.5 billion fuel switching scheme to retire a decade ahead of schedule nearly 700 megawatts of the state’s most affordable, reliable and environmentally superior coal fired power and replace the units with more than 2,000 megawatts of various intermittent sources predominantly wind and solar.

Why bring it up now? Because Xcel’s mega PR machine is working overtime pushing its narrative that everyone is on board and that only “traditional opponents” — to use Xcel Colorado President Alice Jackson term  — question the plan. The reality is that with a little due diligence, many, including consumer groups, labor organizations, renewable energy advocates, electric cooperatives and even PUC Staff, have concerns about the CEP.

Club 20’s initial support was puzzling because for many Western Slope communities that are members of Club 20, coal is a proud way of life, as a recent Craig Daily Press editorial  made abundantly clear:

The coal industry built this community, and the coal industry is what allows this community to continue. Our family members, our friends, and our neighbors are coal miners, and in most Moffat County households, coal is what puts food on the table and gasoline in the tank.

What’s more, coal is a way of life here in Northwest Colorado. It’s a time-honored and noble line of work, and in many families, working in the mines is a proud tradition that’s been passed from father to son for generations.

…Honestly, we’ve had just about enough of being told by corporate interests that coal is somehow evil and that, by extracting it from the ground, we are also evil — that we’re a bunch of greedy, morally bankrupt ingrates who care nothing for the environment or the future of our planet.

Well, that’s simply not true, and, frankly, we resent the implication.

It’s that way of life that Club 20 cited as a reason for the change in position.

We are strongly opposed to the early retirement of coal-fueled power plants and have grave concerns about the impacts to our local coal producers and our local economies with such early retirements.

Those “impacts” will be felt on family budgets too. With Xcel’s cost savings claims thoroughly discredited, Club 20 justifiably worries about the CEP’s impact on electricity rates especially in rural Colorado, recalling the huge cost of HB10-1365 the Clean Air, Clean Jobs Act, Xcel’s previous fuel switching scheme:

The current Colorado Energy Plan does not outline the impacts of the early retirement of coal units on the actual rates that consumers will pay. Since the passage of HB10-1365, consumers in rural Colorado have seen their electric bills sky rocket as electric utilities have been required to incorporate a greater percentage of renewable energy sources. Many of these residents simply cannot afford additional increases in their utility costs and we cannot lend our support to a plan that has the potential to increase rates and threatens the prosperity for Western Coloradans.

Using Xcel’s own numbers, Coalition of Ratepayers expert witness Charles Griffey found that any savings are highly speculative and don’t materialize until 2046, if ever.

The bottom line for Club 20 is that after a bit of research, the group found it didn’t have enough information on the actual cost nor real savings to make an informed decision so it revised its position on the CEP from “support” to “neutral” — a smart move that other supporters would be wise to follow.

Pueblo beware of Xcel’s promise of economic development

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Xcel Energy continues to make absurd claims about its Colorado Energy Plan Corporate Enrichment Plan (CEP).

The Coalition and others have debunked the cost-savings scam, but what about the economic development claims? One of our favorites is that the CEP, which will destroy 80 to 90, maybe more, good-paying jobs in Pueblo, is good economics for the city. To lend credibility to the claim, clearly it needs some, Xcel commissioned a self-serving study from the respectable University of Colorado Leeds School of Business.

To Xcel’s delight, the Leeds study painted a rosy picture following the loss of jobs with the closure of Comanche 1 and 2. There’s one huge problem with the study that renders the whole thing useless:

PSCo [Xcel Energy Colorado] provided data that included capital expenditures, operating expenditures, revenue requirements, and taxes for each scenario, consistent with the final Preferred Electric Resource Plan and Preferred Colorado Energy Plan as presented in the June 6, 2018 120-Day report. The research team worked under the assumption that the company provided good-faith estimates for each scenario.

Xcel supplied all the numbers. Leeds should have researched those numbers a little more before simply accepting them as “good faith estimates” because Xcel’s accounting and modeling have been thoroughly discredited in the company’s quest for approval of the CEP.

Colorado Public Utilities Commission Staff doesn’t trust Xcel’s numbers, writing this in public comments:

Staff is unable to conclude that the Preferred CEPP is more likely than not to produce savings. The modeling results presented by the Company contain a number of errors and a fundamental flaw, which are discussed below, that render the results suspect.

Colorado’s largest rural electric cooperative Intermountain Rural Electric Association (IREA) doesn’t trust Xcel’s numbers as former Moffat County Commissioner John Kinkaid pointed out in a letter to the editor that appeared in the Grand Junction Sentinel:

The plan ‘requires ratepayers to pay a premium for renewable generation levels that significantly exceed already-satisfied Renewable Energy Standard levels and is based on a deeply flawed model that inaccurately projects cost savings decades from now.’

The Coalition of Ratepayers has proven repeatedly that Xcel’s numbers are unreliable:

PSCo’s accounting has been riddled with biased assumptions, errors, and changes that are completely self-serving and call into question the Company’s credibility on numerous claims. Simply put, PSCo’s numbers are not trustworthy or accurate.

And the study itself? PUC Staff criticized it writing, “The Leeds report is not transparent, and the Company did not provide sufficient additional support to allow Staff to determine the quality of the results.”

Staff went on to provide an economics lesson that ends with its opinion of the CEP’s possible economic benefits to Pueblo:

Staff concludes that the Preferred CEPP may result in a positive economic impact for Pueblo County in the same way that economic activity is generated if a building is destroyed and rebuilt. The decision about whether a building should be destroyed and rebuilt should be made based on the value of that project, not the economic impact of an exercise that will utilize dollars that could be used for another possibly more beneficial purpose. The magnitude of the economic impact provided in the Leeds report is impossible for Staff to validate, but is likely much smaller than the estimate provided by Leeds.

Beware of Xcel’s false promise of economic development. The International Brotherhood of Electrical Workers (IBEW), Local 111, which represents Comanche employees, pointed out that during a 15 year period of time, the Leeds study indicated Pueblo likely would experience negative GDP growth.

We will know in a couple of weeks if the Colorado PUC will approve Xcel’s massive $2.5 billion fuel switching scheme. If the commission says yes, it will do so knowing that cost-savings and economic development claims aren’t true. In other words, Xcel will be allowed to get away with not telling the truth as it enriches shareholders at the expense of Colorado’s ratepayers and the hard working folks of Pueblo, who face an uncertain future.

Media Release: Customers want Xcel to pay for CEP

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New Polling Suggests Xcel Ratepayers Are Unwilling to Foot the Bill for Executives and Shareholders

85% of Xcel Customers Think the Company Should Pay for the Costs Incurred from Colorado Energy Plan’s Details

 

DENVER, July 30, 2018 – Eighty-five percent of Colorado’s Xcel Energy customers do not want to pay the $2.5 billion cost for the company’s Colorado Energy Plan (CEP), according to a poll released by the Coalition of Ratepayers.

Xcel Energy, headquartered in Minneapolis, is a regulated, for-profit monopoly utility serving roughly 1.4 million electricity customers throughout Colorado. The utility currently is seeking regulatory approval of the CEP, a massive fuel switching scheme away from base load hydrocarbons in favor of various sources, primarily intermittent industrial wind.

The poll, conducted by Magellan Strategies, found that 85 percent of Xcel’s customers believe Xcel shareholders should incur more of the cost – and the associated financial risk – of the proposed CEP. Only three percent of respondents were content with Xcel customers assuming the entirety of the plan’s financial burden (the remaining 12 percent of respondents were unsure).

The poll comes just ahead of an August 1st hearing at the Colorado Public Utilities Commission to consider whether Xcel will be allowed to shutter prematurely two of the state’s most efficient coal-fired units, Comanche I and II located in Pueblo.

Because of a 2004 agreement, Xcel committed customers to pay nearly $200 million to upgrade the Comanche units, making them some of the most environmentally superior in the state in order to keep them operational until 2035. As part of the CEP, Xcel now wants to close the units a decade early.

The Coalition of Ratepayers, which commissioned the poll, is also an intervenor in the CEP and Comanche retirement proceedings in front of the PUC and has presented testimony challenging Xcel’s claim that its plan will save ratepayers money.

“We’ve been told repeatedly that the more wind and solar Xcel builds, the more money we will save and yet, none of those savings have materialized. When customers hear the cost of this current plan, they don’t want to pay for it. Based on what has happened with electricity bills who can blame them? Some of our members have seen bills go up 100 percent,” said Amy Oliver Cooke of the Coalition of Ratepayers.

“They may like wind and solar, but this poll shows customers think it’s time Xcel’s well-compensated executives and stockholders should have some skin in the game. If the CEP is such a great idea, then the company should risk stockholders’ money not Colorado ratepayers who have no voice and no choice. It’s time Xcel executives and stockholders paid their own bills,” Cooke added.

Upon learning that Xcel’s executive compensation is tied to stock performance rather than the performance of its power stations, 74 percent of respondents to Magellan Strategies’ polling concluded that the utility’s corporate leadership is more beholden to company stockholders than customers, with only seven percent believing that the company looks out for its ratepayers first.

“This poll shows Xcel customers don’t want to be guinea pigs in Xcel’s profit enrichment scheme. The only sure thing in Xcel’s $2.5 billion proposal to build out new facilities is that Xcel Energy will make tens of millions of dollars – and likely over $100 million – in additional profits. If Xcel believes this $2.5 billion build-out of new facilities will someday pay for itself, then let Xcel executives and Xcel shareholders – not captive ratepayers – foot the $2.5 billion bill, “said James Taylor, Senior Fellow for Environment and Energy Policy at the Heartland Institute.

Xcel customers will know their fate by mid-September when the Commission is expected to release its decision. Should the Commission rule in Xcel’s favor, the company’s Wall Street shareholders will reap significant profits, while Colorado ratepayers will pay the price.

The Colorado Public Utilities Commission is aware of all of this, despite allies of Xcel having tried – and failed – to suppress evidence that confirms the economic boondoggle that this proposal promises. The Coalition of Ratepayers is optimistic that following the hearings on August 1, the Commission will side with the people of Colorado, not a for-profit monopoly beholden to Wall Street banks rather than its customers.

The Coalition of Ratepayers is a Colorado nonprofit focused on issues impacting small business and residential ratepayers that otherwise have no voice. To learn more, please visit www.i2i.org/coalition-of-ratepayers.

 

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