When the Colorado Public Utilities Commission recently approved Xcel Energy’s Colorado Energy Plan, the commissioners made a highly politicized decision that ignored economic reality, bypassed the state legislature and allowed the company to break its promise to save customers money. Coloradans should be troubled not just by the plan itself, but by how it won approval through an end-run of the democratic process.
In August 2017, Xcel unveiled the Colorado Energy Plan, (or CEP) to great fanfare. The plan’s cheerleaders, including Gov. John Hickenlooper and state agencies, celebrated the monopoly utility’s proposal to spend $2.5 billion on fuel switching and its promise simultaneously to save customers money. A project so massive would need legislative approval in order to proceed, like the much less ambitious Clean Air, Clean Jobs Act of 2010.
Earlier in 2017, Xcel Colorado’s then-vice president (now CEO) Alice Jackson confirmed in public testimony to the Public Utilities Commission (or PUC) that the Colorado legislature is the most appropriate entity to approve prematurely shutting-down two coal-fired power plants and replacing them with wind and solar. “If we are going to fundamentally restructure the way that we do resource planning in Colorado… then that is a question for the General Assembly and not for Mr. Monsen, CIEA, or the company,” Jackson said at the time.
She was right about that. Because Xcel is a monopoly utility – whose customers must shoulder the cost of any capital investments, and an individual customer’s ability to actively intervene at the Public Utilities Commission is severely limited – it only makes sense that Colorado customers weigh-in via their state legislators.
During the 2017 legislative session, Xcel took the democratic route, by deploying an army of lobbyists to the General Assembly in the hope of passing a plan very similar to CEP. It failed in the Senate, however, because it made zero economic sense to force Coloradans to pay to shut down our most affordable and dependable power plants, in favor of unreliable wind turbines and solar panels that can increase electricity costs while decreasing dependability.
After the session, Xcel changed its tune, claiming a Hickenlooper executive order was all it needed to seek regulatory approval of the massive fuel-switching scheme. My colleague, President Pro-Tem Jerry Sonnenberg (R-Sterling), appropriately accused Xcel of pulling “a bit of a fast one by going to the Public Utilities Commission for something it couldn’t get passed through the Legislature.”
A press release announcing the company’s change of tack not only touted the “broad” coalition that supports the plan, and the $2.5 billion in “clean energy” investments it could bring to rural Colorado. It also made the rather astounding claim that all this could be done at “no additional cost to the company’s electricity customers.”
If that were true, the legislature surely would have approved the measure in 2017. But Xcel is employing creative accounting to make the CEP look affordable, which is why it didn’t pass the smell test with my most business- and energy-savvy colleagues in 2017. Flaws in the company’s analysis became apparent during CEP hearings, thanks to diligent watchdog work by third parties and ratepayer advocates. But the plan won approval despite those dubious underpinnings and the doubts of some PUC members.
Before voting for a less radical iteration of the plan, for instance, Commissioner Wendy Moser confirmed that customers will pay higher rates to cover CEP’s cost, contradicting one of the company’s primary rationales for making these moves.
Because the CEP would never have made it through the legislature, Xcel tossed aside its Colorado president’s declaration that it must do so, instead betting its future on the Hickenlooper-appointed PUC. And it turned out to be a shrewd bet….until you see things from the energy consumer’s point of view.
Xcel broke its pledge to pursue its aims democratically and an unelected Public Utilities Commission let the for-profit monopoly get away with it. Instead of deciding based on economics and the public good, Commissioners made a political decision and set the stage for an economic boondoggle that should infuriate Coloradans.
Xcel is sticking it to its 1.4 million captive Colorado customers, who will have to pay millions of dollars more, while its Minnesota executives and Wall Street shareholders laugh their way to the bank.
Colorado lawmakers from both parties have worked together for years to find and implement long-term solutions to the state’s energy issues. But by forcing the Colorado Energy Plan through the Public Utilities Commission, Xcel prevented us from even having the option to advocate on behalf of the public good. Shame on Xcel and the commission.