On April 9, the Commissioners of the Colorado PUC held a three hour informational meeting with presentations from Xcel, the collective solar parties, the Colorado Energy Office, the Office of Consumer Council, and Western Resources Advocates. The outlines of the process will start to firm up in May, but the parties laid out some general ideas for process and substance in PowerPoint presentations before a packed house.
As a quick recap, remember that this matter spun off from the 2014 RES compliance docket at the motion of the Colorado Energy Office. Their argument was, essentially, that if the value of solar was going to be debated it should get its own hearing instead of being stuck in the compliance plan almost as a sideshow. The CEO argued that severing the issues would “increase transparency and allow stakeholders from across the state to participate in the dialog related to incremental costs, net metering incentives, and solar energy rates.” (CEO motion 21 Jan 2014) The commissioners deliberated on the motion at their weekly meeting on January 29 and granted that motion shortly thereafter with much hand wringing about the structure of the new proceeding.
In response to that hand wringing, the commissioners held this informational meeting with the parties directed to discuss their “recommendations on the substantive issues the Commission should address in this proceeding, objectives the Commission should meet, and the best procedures satisfying those objectives.” (Decision No. C14-0294 in proceeding 14M-0235E) Continue reading →
This case was originally filed June 17, 2013 and is a strategic demand side management issues matter. Demand Side Management (“DSM”) refers generally to policies that aim to reduce energy consumption overall (through energy efficiency and other programs) and moving certain loads from peak to off peak periods.
Value of Demand Side Management
Although taking the same consumption and moving it to a different time might not seem like it will make a huge difference in energy use and consumption, it’s a very important resource. Certain generating units called “peaking plants” (or “peakers” burning methane) operate only when there is a larger than usual demand for energy, such as a really hot day when everybody is running their air conditioners at the same time. In those instances, the peaking plant kicks on and saves the day. Peaking plants are more expensive to operate and are typically much less efficient than fossil baseload resources (if those resources are operating properly, but that’s another chapter). If there’s a large manufacturing plant that can temporarily suspend their operations or reduce their consumption in other ways to a large enough degree, Xcel won’t have to turn that peaker on at all. Peaking plants generally operate about 100 hours or less per year. By moving a large load from the middle of the day to the middle of the night when loads are lighter, we’re still using the same amount of energy, but it won’t come from that inefficient peaking plant. Energy efficiency and demand response are great programs that change the picture of energy consumption and can make a huge difference in reducing emissions stemming from fossil generation.
Xcel’s DSM program is in response to legislation passed in 2007. The Legislature declared in HB 07-1037 that “cost-effective natural gas and electricity demand-side management programs will save money for consumers and utilities and protect Colorado’s environment.” Through this legislation the PUC was “encouraged” to “reduce emissions or air pollutants and to increase energy efficiency.” The goal is for electric utilities to reduce peak generation by 5% from the 2006 levels by 2018. The bill allowed for utilities to recoup their investments in DSM programs at a higher rate of return than other generation investments. Continue reading →
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***Update – The hearing was vacated and rescheduled for April 21***
On Friday, April 4 and continuing Monday, April 7, there will be a hearing on docket 13AL-0958E at the Colorado Public Utilities Commission. Why is this docket important? It has the ability to further decrease the rates that Xcel pays for power generated by outside power producers and thereby keep the generation of power in Xcel’s Colorado territory under its control.
As background, a Federal law, the Public Utilities Regulatory Policies Act (PURPA), passed in 1978, requires utility companies to buy power from outside producers if the cost is less than what it would cost them to make the power themselves, known as the “avoided cost.” This theoretically allows for small power companies, such as solar, wind, and hydro, to get into the power market. One of the main rubs in this system is determining what the “avoided cost” is, and therefore, what rate the independent power producers get paid for their power. That’s the subject of this docket. Xcel filed paperwork with the PUC that will change the rates they pay for this outside power for systems sized from 10-100 MW as well as the methodology by which they determine what that power is worth going forward.
In the experience of one of the parties, the methodology and rates that are finalized in this docket become the de facto rates and methodology for other power that Xcel buys overall. Avoided cost has been defined to include any number of factors, but Xcel typically keeps avoided cost artificially low, making it hard for independent power producers to get a sufficient return on their investment to make the development feasible. Federal law requires that the rate paid to these outside producers or qualifying facilities (QF), be among other things, not in excess of the incremental cost ( (the cost of producing an additional unit of generation) to the electric utility. There are interesting developments in other states, California being one of them, to include environmental costs in this avoided cost determination. Environmental costs are chief among the factors that need to be considered in these determinations, but Xcel will argue that they don’t directly pay the environmental costs that are being assigned in an avoided cost determination and so that cost cannot be fairly considered. Yet another reason we need to change the entire system, but I’ll try to stay to the docket at hand.
“we don’t know whether the climate really is changing”
while discussing the impact of the 2013 flood and the plans for continuing to rebuild.
Tell Governor Hickenlooper that you agree with the overwhelming scientific consensus that climate change is happening – and is anthropogenic. We need our governor to know that we should be planning for the future – with adaptation strategies to plan for increasing natural disasters, such as floods and wildfires, and mitigation strategies, such as increasing renewable energies and shutting off fossil fuel burning power plants.
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