Xcel's Colorado Energy Plan "Stipulation" - Another Xcel "Deal" That is not a Deal at All
In late August 2017, Xcel-Colorado (Public Service Company of Colorado or “PSCo”) submitted a plan to the Colorado Public Utilities Commission (“PUC”) which it named the Colorado Energy Plan or “CEP.” The Colorado Energy Plan was submitted to the PUC as a “Stipulation” in Docket 16A-0396E and the CEP is sometimes referred to as “The Stipulation.” While Xcel’s Colorado Energy Plan includes moving up the retirement date for two coal plants—Comanche 1 and 2 in Pueblo, Colorado—the Plan also contains a number of adverse provisions including:
Reducing Xcel’s Renewable Energy Standard Adjustment which is supposed to be used to support renewable energy additions and using the “head room” created by that reduction to pay off the undepreciated portion of Comanche 1 and 2.
Paying Xcel their full level of profit (known as “return at the WACC” or Weighted Average Cost of Capital of about 7 %) on the now stranded coal plants.
Establishing ownership targets for Xcel ownership of replacement generation, potentially reducing the competitive nature of Colorado’s energy market.
Including natural gas in the replacement generation and potentially constraining the analysis of the over 50,000 MW of very cost-effective wind, solar and storage bids that Xcel received in November 2018. The CEP would consider adding about 2000 MW of wind and solar to Xcel’s Colorado system, leaving over 90% of the wind, solar and storage bids “on the table.”
Clean Energy Action Board member Leslie Glustrom submitted extensive comments on the “Stipulation” and a final statement.
Photo Courtesy of Alan Best
In addition, Clean Energy Action hosted several trainings on the CEP/Stipulation in late January 2018 and numerous citizens that attended the trainings testified at the Colorado PUC on February 1, 2018 in Docket 16A-0396E. Many citizens pointed out that Xcel’s Colorado Energy Plan “deal” was not as good a “deal” as Xcel wanted the Commission to believe it was.
On Wednesday March 14, 2018 the Colorado PUC allowed Xcel to bring forth a plan that retires Comanche 1 and 2 early, but did not accept many other parts of the Colorado Energy Plan “Stipulation.” The decision is here.
Unfortunately the Colorado PUC did not specify that Xcel should develop a plan that no longer uses “must-run” requirements for Xcel’s Colorado coal plants, but it did require a “least-cost” modeling run which should begin to show the vast potential for lowering utility costs by incorporating low-cost wind, solar and storage onto Xcel’s Colorado system. Importantly, the sensitivity runs with lower discount rates should show even greater savings from adding wind, solar and storage resources. The modeling report is expected in late April 2018.
The mission of Clean Energy Action is to “accelerate the transition to the post-fossil fuel world,” and we are strong supporters of retiring coal and natural gas plants, but we will also advocate for a “just transition” that does not unduly burden utility ratepayers. The Colorado Energy Plan, while containing some admirable proposals, transfers too much accountability for stranded fossil fuel assets from Xcel to its customers.