Coalition of Ratepayers

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.

Western Resource Advocates really corporate enablers at ratepayer expense

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Western Resource Advocates (WRA), the multi-state renewable energy advocacy group, also seems to be an advocacy group for electricity corporate oligarchies.

Two weeks ago, in what looks to be Xcel Energy’s bidding, the group filed a motion to strike a huge portion of our expert witness Charles Griffey’s testimony that completely disproves WRA and Xcel’s claim that the Colorado Energy Plan (CEP) will save money for ratepayers. Fortunately, the PUC disagreed with WRA and denied its motion.

Xcel is a Minneapolis-based monopoly with its top ten stockholders being Wall Street banks and investment funds.

Last Friday, WRA came out opposed to Nevada’s consumer choice ballot measure. According to a joint press release with the Sierra Club, Environmental Defense Fund (EDF), and Southwest Energy Efficiency Project (SWEEP), WRA said:

NV Energy has changed course on renewable energy and is proposing new solar projects that will double its current level of renewable generation by 2023. By taking NV Energy out of the electricity generation business at this critical juncture, passage of Question 3 not only will kill these important projects, but it is likely to create a cloud of legal and regulatory uncertainty that could chill the development of new renewable projects by anyone else over the next 4-5 years while the Legislature figures out the complicated details of restructuring Nevada’s electricity markets. We urge Nevadans to vote No on Question 3.

Translation: Regulators must require utilities to use expensive, intermittent sources, make captive ratepayers pay the price “at any cost” and unjustly enrich stockholders. (NV Energy is “a wholly-owned subsidiary of Berkshire Hathaway Energy Company.”) Absent regulations and mandates, consumers may not choose wind and solar on their own. Why? Because they are expensive and aren’t always available when we really them.

Interestingly, the Sierra Club, EDF, and SWEEP joined WRA in support Xcel’s CEP. This is how Intermountain Rural Electric Association described that support: “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.” [emphasis mine]

At any cost…these groups use environmental activism to enrich corporate oligarchies. They’ve gone from tree huggers to money grabbers all in the name of environmentalism.

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

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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.