Category Archives: PUC

URGENT: SAVE BOULDER’S BID FOR A MUNICIPAL UTILITY

This week could prove critical in determining Boulder’s energy future, and CEA needs your support.

Xcel Energy has launched a bid to stop Boulder’s 7-year effort toward municipalization in its tracks. One April 17th, the Boulder City Council considers two proposals from Xcel designed to dissuade us from our quest to control our own energy destiny.

Two days later, on April 19th, the Public Utilities Commission is holding an equally critical hearing on a motion to dismiss Boulder’s municipalization case outright.

We need your help to keep municipalization alive!

This is a critical moment for the future of independent municipal utilities in Colorado, so we ask not just Boulder residents but all Coloradans to step up to the plate.

Email the PUC at dora_PUC_complaints@state.co.us​​ with your support for Boulder’s constitutional right to form a municipal utility. A few things to mention:

  • Communities should have a right to determine their energy future and should not be constrained by Xcel’s thinking and corporate constraints
  • Under the law of Colorado, Boulder has a constitutional right to form a municipal utility, and it is up to the Commission to protect that right, and make sure it means more than words in a statute book
  • At this defining moment in the history of our planet, we need more options than a profit-driven monopoly that remains dependent on fossil fuels for more than 70% of its power generation.

We also ask our supporters to contact the City Council at council@bouldercolorado.gov and tell them to stay the course! We encourage you to remind them that:

  • Boulder Energy Future has worked for seven years to build a realistic, reasonable alternative to continued partnership with Xcel.
  • Boulder voters have weighed in on this issue not once but several times. In ballot measures in 2011, 2013, and 2014 Boulder’s residents asserted their demand to control their own energy future.
  • The two deals proposed by Xcel are both unacceptable, and do not reflect the best interests or desires of the rate-payers of Boulder.

Most importantly, there is a Stay the Course Rally outside the Municipal Building at 1777 Broadway, Boulder CO 80302 from 5:00-6:00 pm before the City Council hearing on Monday April 17th. Please come and show your support for Boulder’s Energy Future and the municipalization effort. Wear green and bring signs or posters. A couple ideas for signs and poster slogans:

  • “STAY THE COURSE!”
  • “Just Say NO (To Xcel)!”
  • “Don’t Give Away Our Energy Future!”

Finally, we ask all of our supporters to be polite and respectful when communicating with the PUC and the City Council. We cannot overstate the importance of addressing our officials in a way that is clear and concise, and also gracious and polite.

Thank you for your support. Together we will make a difference!

CEA Leads Coloradans in Challenging XCEL

The effort to decarbonize Colorado’s largest electricity supplier, Xcel Energy, advanced in Denver last month as Coloradans lined up to speak at the Colorado Public Utilities Commission hearing on Xcel’s 2016 Electric Resource Plan. Members of CEA led Coloradans from all walks of life in voicing their concerns about Colorado’s electricity future.

The hearing room at the Public Utilities Commission was overflowing as the people of Colorado addressed the three PUC Commissioners. They expressed a host of concerns about Xcel’s plan,  and asked for more focus on the abundance of cost-effective renewable energy available in Colorado, in accordance with Colorado’s laws and regulations.

The PUC is a part of the Colorado Department of Regulatory Agencies, and is responsible for regulating many parts of our state’s utilities, transportation, and telecommunications.

 

Issues raised during the public testimony included the need to:

  • Consider climate change and the urgency of reducing carbon emissions
  • Increase the reliance on renewable energy in order to reduce both emissions and costs
  • Accelerate the adoption of storage technologies to support the integration of higher levels of renewable energy
  • Begin contingency planning in the event of future coal bankruptcies and potential coal supply constraints
  • Allow new, cleaner resources to replace energy generation from older, dirtier, more expensive fossil fuel resources

Citizen witnesses also discussed the need to analyze the choices between renewable energy (with no future fuel costs) and fossil fuel resources (with billions of dollars of future fuel costs) using lower discount rates. A lower discount rate will show increased savings from cost-effective renewable energy because future fuel costs won’t be so heavily discounted.

Discounting the approximately $60 billion in future fuel costs associated with Xcel’s Electric Resource Plan at Xcel’s Weighted Average Cost of Capital (“WACC”) will have the effect of shrinking these future fuel costs and also shrinking the savings that will come from cost-effective renewable energy resources like wind and solar that don’t have future fuel costs.

More details on Xcel’s Electric Resource Plan and the key issues, including the importance of the choice of discount rate, are available in the public comment filing made by Clean Energy Action Board member Leslie Glustrom.

CEA is grateful that the new appointees to the Colorado PUC , Chairperson Jeff Ackerman and Commissioner Wendy Moser, along with Commissioner Frances Koncilja, are dedicated to hearing from the public and that the public is well enough informed to provide useful and compelling testimony!

You can also check out Christi Turner’s comprehensive article in Boulder Weekly and learn more about this important step froward in the fight for cheaper, cleaner power.

Decoupling & Demand Side Management in Colorado

Utility revenue decoupling is often seen as an enabling policy supporting “demand side management” (DSM) programs.  DSM is a catch-all term for the things you can do behind the meter that reduce the amount of energy (kWh) a utility needs to produce or the amount of capacity (kW) it needs to have available.  DSM includes investments improving the energy efficiency of buildings and their heating and cooling systems, lighting, and appliances.  It can also include “demand response” (DR) which is a dispatchable decline in energy consumption — like the ability of a utility to ask every Walmart in New England to turn down their lights or air conditioning at the same time on a moment’s notice — in order to avoid needing to build seldom used peaking power plants.

For reasons that will be obvious if you’ve read our previous posts on revenue decoupling, getting utilities to invest in these kinds of measures can be challenging, so long as their revenues are directly tied to the amount of electricity they sell.  Revenue decoupling can fix that problem.  However, reducing customer demand for energy on a larger scale, especially during times of peak demand, can seriously detract from the utility’s ability to deploy capital (on which they earn a return) for the construction of additional generating capacity.  That conflict of interests is harder to address.

But it’s worth working on, because as we’ll see below, DSM is cheap and very low risk — it’s great for rate payers, and it’s great for the economy as a whole.  It can reduce our economic sensitivity to volatile fuel prices, and often shifts investment away from low-value environmentally damaging commodities like natural gas and coal, toward skilled labor and high performance building systems and industrial components.

The rest of this post is based on the testimony that Clean Energy Action prepared for Xcel Energy’s 14AL-0660E rate case proceeding, before revenue decoupling was split off.  Much of it applies specifically to Xcel in Colorado.  However, the overall issues addressed are applicable in many traditional regulated, vertically integrated monopoly utility settings.

Why can’t we scale up DSM?

There are several barriers to Xcel profitably and cost-effectively scaling up their current DSM programs.  Removing these impediments is necessary if DSM is to realize its full potential for reducing GHG emissions from Colorado’s electricity sector.  Revenue decoupling can address some, but not all of them.

  1. There are the lost revenues from energy saved, which impacts the utility’s fixed cost recovery.  If the incentive payment that they earn by meeting DSM targets is too small to compensate for those lost revenues, then the net financial impact of investing in DSM is still negative — i.e. the utility will see investing in DSM as a losing proposition.  Xcel currently gets a “disincentive offset” to make up for lost revenues, but they say that this doesn’t entirely offset their lost revenues.
  2. Even if the performance incentive is big enough to make DSM an attractive investment, the PUC currently caps the incentive at $30M per year (including the $5M “disincentive offset”), meaning that even if there’s a larger pool of cost-effective energy efficiency measures to invest in, the utility has no reason to go above and beyond and save more energy once they’ve maxed out the incentive.
  3. If this cap were removed, the utility would still have a finite approved DSM budget.  With an unlimited performance incentive and a finite DSM budget, the utility would have an incentive to buy as much efficiency as possible, within their approved budget, which would encourage cost-effectiveness, but wouldn’t necessarily mean all the available cost-effective DSM was being acquired.
  4. Given that the utility has an annual obligation under the current DSM legislation to save a particular amount of energy (400 GWh), they have an incentive to “bank” some opportunities, and save them for later, lest they make it more difficult for themselves to satisfy their regulatory mandate in later years by buying all the easy stuff up front.
  5. It is of course the possible that beyond a certain point there simply aren’t any more scalable, cost-effective efficiency investments to be made.
  6. Finally and most seriously, declining electricity demand would pose a threat to the “used and useful” status of existing generation assets and to the utility’s future capital investment program, which is how they make basically all of their money right now.

Revenue decoupling can play an important role in overcoming some, but not all, of these limitations.  With decoupling in place, we’d expect that the utility would be willing and able to earn the entire $30M performance incentive (which they have yet to do in any year) so long as it didn’t make regulatory compliance in future years more challenging by prematurely exhausting some of the easy DSM opportunities.

Continue reading Decoupling & Demand Side Management in Colorado

Public Hearing for Xcel’s Rate Increase

Thursday, November 20th, 5:00 pm – 7:00 pm
Public Utilities Commission, Hearing Room A
1560 Broadway, Denver, CO 80202

Xcel is asking to pour a billion dollars into fossil fuel infrastructure, which is completely incompatible with a stable climate.

Colorado will feel the effects of an unstable climate through  dramatically increased wildfires, reduced water availability for agriculture,  flooding and other extreme weather events. These are real impacts that Coloradans are already experiencing.

Making these investments further commits us to burning fuels for decades.

Cost for wind, solar, energy efficiency and storage continue to plummet which makes new investments in long term fossil fuel infrastructure absurd.

New Capital Investments Xcel is Requesting
  • $ 2.04B for new capital investments:
    • $1.1B of production investment;
      • $ 950M for CACJA (Clean Air Clean Jobs Act of 2010)
      • $ 175M for other plants
    • $251.8M of transmission investment;
    • $470M of distribution investment; and
    • $187.6M of other types of capital investment.

For more information see our Rate Case Workshop Presentation or contact us at info@cleanenergyaction.org

If you can’t make it to the hearing, you can send comments for the PUC  to dora_puc_complaints@state.co.us with the proceeding number, 14AL-0660E in the subject line.

Utilities Decoupling to Cover Their… Assets

Last month, Xcel Energy subsidiary Public Service Company of Colorado (PSCo) filed a rate case at the Colorado Public Utilities Commission (Docket: 14AL-0660E).  A lot of the case — the part that’s gotten most of the press — is about PSCo recovering the costs of retiring and retrofitting coal plants as agreed to under the Clean Air Clean Jobs Act (CACJA) of 2010.  However, there’s a piece of the case that could have much wider implications.  Way down deep in the last piece of direct testimony, PSCo witness Scott B. Brockett:

…provides support and recommendations regarding the initiation of a decoupling mechanism for residential and small commercial customers.

This recommendation has captivated all of us here at CEA because it could open the door to Xcel adopting a radically different business model, and becoming much more of an energy services utility (PDF), fit for the 21st century.

To explain why, we’re going to have to delve a ways into the weeds of the energy wonkosphere.

Continue reading Utilities Decoupling to Cover Their… Assets