Tag Archives: PUC

HELP US STAND UP FOR COLORADO RATEPAYERS!

​Dear Renewable Energy Advocates–We have an AMAZING opportunity to move clean energy forward in Colorado–but we need your help to “get it right.” ​​Please come to a training below and then to the PUC hearing on Feb 1, 2018. (Docket 16A-0396E “Stipulation” hearing) 

Here are the key dates so far: ​​

Monday January 22, 2018–6 pm,  ​Boulder ​Training

Meadows Public Library,
Boulder​, Colorado​
 (4800 Baseline, behind the Safeway)
Thursday January 25, 2018–6 pm, Denver Training
​Epic Brewing​
3001 Walnut St. Denver, CO 80205 Phone: 720-539-7410 ​
Monday January 29, 2018–​6 pm Lakewood/Jeffco Training
Belmar Library
555 S. Allison Parkway, Lakewood, Colorado
THEN ​HOPING EVERYONE WILL COME….​
Thursday Feb 1, 2018–4​-7​ pm
PUC Public Hearing 16A-0396E

Coal plant retirements, payment plans & replacement options1560 Broadway, #250,Denver 

The February 1, 2018 PUC hearing ​is a critical 
opportunity for the public to help shape the PUC’s response to the need to retire Xcel’s coal plants long before their expected retirement dates. 
This hearing will be about moving the retirement of ​the ​Comanche 1 and 2 ​coal plants in Pueblo ​up about 10 years ​into the ​
2020s. This is, of course, a step in the right direction, but we need your help to make the PUC understand the following:
  • ​Move Faster on Coal Retirements: ​ We are in a crisis on climate change. We can and must move faster by retiring these coal plants ​even ​earlier and working to retire ​the rest of Xcel’s coal fleet much ​sooner also.
  • ​Don’t Rush to Build More Natural Gas: ​Replacing coal plants with wind, solar, storage and demand side options makes good economic and environmental sense. This is not true for building new natural gas capacity which will likely just become stranded in its own time.
  • ​Don’t Make Xcel’s Customers Pay for All of Xcel’s Poorly Considered Expenditures on Coal: Xcel has poured hundreds of millions of dollars into their old coal plants in ​Colorado in this century–including into Comanche 1 and 2. Now Xcel wants us to pay for all of this–and pay them their return​ (think “profit,” at their​ Weighted Average Cost of Capital or WACC) on the ill-considered ​coal plant ​expenditures they have made in recent years. This isn’t a just or equitable solution for ratepayers. If we are to set a ​fair and equitable ​precedent for how we dig ourselves out of the very deep ​hole ​we’ve dug on coal in Colorado, it will be up to the ​informed ​citizens who testify on February 1, 2018 at the PUC to get it done!
 
​Just come to a training and we’ll walk you through 
​the key parts and make sure your statement is on-point and powerful! ​In case you haven’t noticed, climate change impacts are already getting really serious. Please help us move Xcel further, faster on the clean energy path–and when we move Xcel, we move all of Colorado utilities and the entire US utility industry. 
But….We can’t do it without YOU!

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.

Public Hearing for Performance-Based Ratemaking

Tell the House Committee that Utilities Should be Rewarded (or Penalized) Based on their Carbon Emissions
March, 25th, 1:30 pm
Colorado State Capitol, Room 0112
200 E. Colfax Ave, Denver

The Colorado House Transportation and Energy Committee will decide whether to move forward with HB 15-1250, which seeks to initiate an investigation into performance-based ratemaking. Tell the legislature that performance-based ratemaking should reward the utilities for reducing their carbon emissions.

Currently, most utilities’ profits are determined by how much capital they deploy, plus their allowed rate of return on that capital. In other words, the more they spend on their infrastructure, the more they are able to make. The idea behind performance-based ratemaking is to regulate the utilities’ profits according to how well they meet goals that we set for them. The goals or metrics can range from increasing reliability of the grid to reducing costs to increasing energy efficiency to reducing carbon emissions.

Once the metrics are determined, the utility either gets rewarded or penalized based on how well they adhere to the goals, as opposed to how much capital they deploy. The tricky part is making sure the goals explicitly include things that are important to us, like reducing their carbon emissions.

Colorado State Representative Max Tyler has introduced a bill that would require the PUC to investigate performance-based ratemaking based on a variety of metrics, including reducing carbon emissions.  We are happy to see that reducing carbon emissions is included in the list of metrics. It is crucial that minimizing carbon emissions remains a top priority.

If this bill passes, it will be the beginning of a process that can integrate metrics beyond short-term costs into the ratemaking process, including climate.

Tell the committee that regardless of whether or not they go forward with this bill, we need to integrate climate and public heath impacts into our electricity planning.

If you can’t make it to the hearing, please email the committee members:

max@maxtyler.us, diane.mitschbush.house@state.co.us, perrybuck49@gmail.com, jon.becker.house@state.co.us, terri.carver.house@state.co.us, don.coram.house@state.co.us, daneya.esgar.house@state.co.us, reptracy29@gmail.com, jovan.melton.house@state.co.us, dominick.moreno.house@state.co.us, patrick.neville.house@state.co.us, dan.nordberg.house@state.co.us, faith.winter.house@state.co.us

Want to learn more about performance-based ratemaking?

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