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’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. 

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.