Coalition of Ratepayers

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

by

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.

Ratepayers need a voice; elect PUC commissioners

by

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

by

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

Media Release: Customers want Xcel to pay for CEP

by

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.

 

# # #

IREA cites Coalition testimony; Xcel fuel switching plan ‘not in ratepayers best interest’

by

The state’s largest electric cooperative Intermountain Rural Electric Association (IREA) issued a strongly worded repudiation of Xcel Energy’s proposed “Colorado Energy Plan Portfolio” (CEPP) in comments published last week on the Colorado Public Utilities Commissions Web site. In their 14-page comments on Xcel’s required 120 day report, the non-profit electric provider cites the Coalition of Ratepayers and our expert witness Charles Griffey numerous times. Including these quotes:

IREA agrees with the Coalition of Ratepayers that any projected NPV savings that are not modeled to occur until decades out and not until after the retirement of Comanche Units 1 and 2 are highly speculative….

Mr. Griffey has raised several unanswered questions concerning instances in which it appears the Company has either intentionally or unintentionally favored the Preferred CEPP in order to project illusory savings versus the Preferred ERP.

As one of the nation’s fastest growing electric cooperatives, IREA’s comments are important and, hopefully, highly influential with the PUC because it serves over 150,000 members across 11 Colorado counties. IREA also purchases power wholesale from Xcel and is a partial owner of Comanche 3, which will remain operating for now regardless of what happens with units 1 and 2.

IREA also calls out CEPP supporters build at any cost mentality while also acknowledging that if not for “certain parties” — the Coalition of Ratepayers — all Colorado ratepayers, not just Xcel ratepayers, would be paying hundreds of millions of dollars more.

However, the stipulating parties’ fixation on retiring 650 MW of economic coal generation a decade ahead of schedule and at any cost has been a deeply flawed proposal from the outset. If not for the advocacy of certain parties and the analysis of their respective experts, Colorado ratepayers would have certainly been on the hook for hundreds of millions of dollars in hidden deferred tax asset costs and unnecessarily re-purposed RESA funds. Accounting for these dollars demonstrates that the Company’s efforts to portray the Preferred CEPP as cost-effective lack merit. The CEPP 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 record before the Commission does not support the early retirement of Comanche Units 1 and 2…

Where would those hundreds of millions of dollars have gone? Into the pockets of Xcel’s stockholders. The Colorado Energy Plan is nothing more than a redistribution of wealth from captive ratepayers to Xcel stockholders and executives. A more appropriate title is the Corporate Enrichment Plan.

Perhaps the most compelling comment from IREA is this short but pointed statement:

In sum, it is not in ratepayers’ best interest to be burdened with the risk of retiring economic coal generation a decade early based on speculative assumptions of cost-savings that will only occur well after the units’ scheduled retirement.

We thank IREA for recognizing that.