Xcel ratepayers would get a bum deal under Colorado Energy Plan
Author: Amy Oliver Cooke - August 2, 2018 - Updated: August 1, 2018
Late last summer, and with great fanfare, Xcel Energy announced its proposal to close the Comanche I & II power units in Pueblo a decade ahead of schedule. They offered as replacement the euphemistically titled “Colorado Energy Plan” (CEP), a massive $2.5 billion fuel-switching scheme to move its Colorado customers away from baseload, reliable hydrocarbons in favor of intermittent renewables, predominantly industrial wind.
Flanked by 14 “diverse groups” from renewable advocates to Gov. Hickenlooper’s executive agencies, Xcel and plan supporters claimed the CEP would save ratepayers money. They wouldn’t even move forward unless it did.
The Coalition of Ratepayers, a Colorado non-profit concerned with issues impacting residential and small business ratepayers, was skeptical, believing the CEP would be more appropriately titled as the “Corporate Enrichment Plan.” After nearly a year of being involved, we have proved that to be true.
Here’s some real math.
Even if we use Xcel’s own self-serving numbers, the alleged cost savings are highly speculative and wouldn’t materialize until 2046 – if ever. Rather than save ratepayers money, the Minneapolis-based monopoly utility will force captive ratepayers to cough up at least another $287 million. That’s on top of the modeling errors we already found in their accounting, and Xcel acknowledged.
In other words, ratepayers will pay higher prices for the next three decades, then maybe we’ll see a few bucks in savings. That’s assuming 30 years from now Xcel hasn’t devised some other unjust enrichment scheme, and we haven’t progressed beyond Xcel’s captive market.
Just 15 years ago, Xcel required that its customers “invest” $190 million to drastically improve the environmental performance of Comanche I & II. As a result of these “investments,” over the past five years, Comanche I & II emission rates have been significantly lower than those of their peers. And to cap things off, Xcel recently congratulated Comanche Power Station for being named 2018 Plant of the Year by the Powder River Basin Coal Users Group.
That begs the question: how are customers supposed to believe that spending $2.5 billion (of our money, not shareholders’) is now in our best interest in order to close two well-performing, environmentally superior units when 15 years ago Xcel told us spending $190 million to upgrade them was in our best interest to keep the units running through 2035?
Why the obfuscation? There are two reasons.
First, Xcel executives and shareholders have a vested interest in acquiring more and more assets, regardless of price. Colorado is one of 21 states in which consumers have no choice in electricity provider, so as Xcel increases its asset base, any operational costs it incurs can be reallocated to captive ratepayers.
The company’s executive compensation is tied to stock performance, rather than product performance, as the latter can be unilaterally offset by increased costs on its customers. As such, Xcel’s executives and shareholders, the largest holders of which are Wall Street banks, reap all of the profit, while the general public assumes all the risk.
Second, Xcel executives surely know that the company’s plan won’t save money unless it uses creative accounting, but they also know that they need approval of the Colorado Public Utilities Commission (COPUC) in order to move forward.
As Xcel creates its own picture of green, economic utopia, its allies actively try to suppress the real picture. Just last week, Western Resource Advocates, an Xcel ally and plan supporter, filed a motion with COPUC to suppress testimony from our expert witness Charles Griffey, a thirty-year veteran of the energy and utilities industry and adjunct professor at Rice University in Houston, Texas, following his exposure of the pie-in-the-sky math Xcel used in its Colorado Energy Plan proposal.
This is the very definition of a monopoly stacking the deck in its favor. Xcel has essentially no competition across the enormous swath of Colorado in which it provides power, and its army of lobbyists and financial beneficiaries have silenced almost all dissent among lawmakers and stakeholders. It isn’t just a bully; it’s a corporate oligarchy.
And ratepayers don’t want to pay for it any more. A recent Coalition of Ratepayers poll shows that 85 percent of Xcel customers agree that if Xcel and its co-conspirators want this plan, then Xcel shareholders need to pay for it.
On Wednesday, the Colorado Public Utilities Commission began hearing Xcel’s case for shutting down two of Colorado’s best-performing power plants in favor of a plan that is guaranteed only to benefit Xcel’s out-of-state executives and investors.
Absent the Commission’s ruling in favor of the public interest, ratepayers have no say in the matter. Lower-income Coloradans especially will be the hardest hit by such a dictatorial outcome.
The Coalition has faith in the three-member Colorado Public Utilities Commission that it will act in the public’s and ratepayers’ interest.
We urge you to call the commissioners and ask them to do right by Colorado ratepayers, rather than act on behalf of an out-of-state monopoly behemoth more concerned with its Wall Street investors than with Coloradans.
In terms of what this means for hardworking Coloradans, the Commission’s decision should be quite simple: a resounding rejection of Xcel’s self-enriching proposal. We certainly hope it is.