Posted on 07/26/2021 7:53:27 AM PDT by george76
If the Public Utilities Commission OK's Xcel’s largest ever rate increase, electric bills for Colorado customers will have increased 20% since the start of the year..
Xcel Energy has proposed a massive transmission project to help move power from rural areas to the urban Front Range.
Xcel Energy is pushing for a record $344 million rate increase it says it needs to build a smarter, greener electric grid. But consumer advocates and state regulators are pushing back over the price tag.
A major concern is that along with an earlier rate increase and other pending requests since the start of 2020, Xcel’s 1.3 residential million Colorado customers could see as much as a 20% increase in their bills.
At the core of the rate case are questions of how much it will cost to move to a cleaner, more resilient electricity system and who will pick up the tab.
The Colorado Public Utilities Commission has rejected a request for an expedited decision on the rate request and set a hearing in August to determine how to proceed in the case, while consumer groups are focused on the size of the request — more than double the company’s last rate case in 2019. Xcel is the largest electricity provider in the state.
“We’ve focused on our core principles leading the clean energy transition,” Alice Jackson, CEO of Xcel’s Colorado subsidiary, said in an interview. “These are all things we are investing in and they do take dollars.”
Xcel is in the process of spending $4 billion on things such as wind farms, solar installations, battery storage, smart meters, cybersecurity and modernizing its distribution system, according to filings to the PUC.
The utility has also submitted a clean energy plan, as required by law, to the PUC that aims to cut the utility’s greenhouse gas emissions 85% from 2005 levels by 2030.
Moving to cleaner energy and reduced carbon emissions are necessary, said Gwen Farnsworth, a policy advisor with the environmental group Western Resource Advocates. But, she added, “we don’t want clean energy and the need for resiliency in the face of climate change used as a blank check.”
The proposed rate hike would add $9.49 to the average residential customer’s bill and bring it to $83.22 a month. Small commercial customers would see a $14.49 increase to $126.62 a month. Each represents about a 13% increase.
That comes, however, after a 2020 residential rate increase of $1.03 per month and also with a pending request by Xcel to add $2.86 a month to residential electricity bills for the next two years to help recover the $650 million in increased fuel costs as a result of February supply disruptions from Winter Storm Uri.
In addition, there are several surcharges, known as riders, that could also increase monthly bills. Taken together all these increases and requests could lead to about a 20% increase in the average bill since the beginning of 2020.
“This could represent a 13% rate increase and coupling that with Storm Uri impacts plus the other new riders we can expect we could be looking at some very significant impacts on customers’ bills,” Commissioner John Gavin said at a recent PUC meeting. “That’s my biggest worry in this whole thing.”
“Here we are emerging from COVID and we have a shaky economy and we want to slam a 20% to 25% increase in rates on ratepayers?” Gavin said. “It is going to be a very, very important thing we deliberate.”
Xcel’s Jackson said that “65% of the investment is something the commission has already seen, walked through, approved.” This includes approving a $24.7 million wildfire mitigation plan and $100 million electric vehicle charging station plan.
PUC Chairman Eric Blank said that while he has voted on some of those individual programs, this approach was becoming “too piecemeal for me and too short term.”
“We’ve never had a record before us that quantified the cumulative impact of these rate approvals,” Blank said. “I’ve been frustrated by the lack of understanding and visibility into where we are going on rate impacts.”
It is something that Blank said he hopes long-term rate impacts over five to 15 years might be able to be addressed in this rate case.
While not discounting Xcel’s cleaner energy goals, consumer advocates express skepticism about the utility’s approach.
“The question is, is there a more cost-effective way to do this,” said Cindy Schonhaut, the executive director of the state Office of Consumer Counsel, which represents residential and small commercial customers in rate cases. “The company isn’t going to put on the table a proposal that costs less. That’s up to us and others.”
There are two parts to establishing the size of a rate increase. First, the company makes investments in projects approved by the PUC – this is called the rate base. It then seeks to get a percentage return — set by the PUC — on those investments or equity. Referred to as ROE, it is not a profit margin.
There is a relentless drive by the company to add to the rate base,” Schonaut said.
A Minneapolis-based, investor-owned utility, with subsidiaries, including Public Service of Colorado, Xcel serves customers in parts of eight Midwestern and Western states.
In 2020, the company posted nearly $1.5 billion in net income, up 7% from the year before, after an 8.8% rise in profits in 2019 and a 10% increase in 2017. In 2020, Public Service of Colorado, accounted for about 40% of Xcel’s earnings on a per share basis, according to company financial filings.
Among investments Xcel is making and that it wants to see in its rate base are: $735 million for Cheyenne Ridge wind farm; $295.5 million for advanced grid technology; and $495 million in upgrades to the distribution system that carries electricity homes and businesses. Some of its components go back to the 1950s.
Not reflected in the rate case is a projected $120 million in fuel savings that Xcel customers will gain as a result of Cheyenne Ridge’s operations. The 500-megawatt wind farm, located in Cheyenne and Kit Carson counties, went into operation in August.
Xcel is seeking a 10% to 10.5% return for the investments it is placing into its rate base and this leads to the $344 million price tag. Cheyenne Ridge, the advanced grid systems and the distribution system account for 70% of the requested rate increase.
“The commission will have to look closely that those costs,” Western Resource’s Farnsworth said. “We have to be careful of utilities presenting all of their investments as needed for clean energy.”
There are also elements in the rate increase that address Xcel’s transition from fossil fuels, such as $43 million in accelerated depreciation for the early closing of its Comanche 1 and Comanche 2 coal-fired plants in Pueblo, and $13.5 million to deal with Comanche coal ash ponds.
Xcel currently is receiving a 9.3% return on equity. “It is the height of chutzpah to ask for 10%,” Schonhaut said.
If past rate cases are any measure, Xcel will not receive the requested ROE or the dollar figure. In its 2019 rate case Xcel sought $158 million and got $41.5 million.
“It is part of a game,” said Bill Levis, former OCC executive director and now a rate case consultant for AARP, which represents retirees and older citizens. “Xcel usually gets 50% to 60% of what they request.”
“This state has not had a return over 10% as long as I remember,” Levis said. “It seems like the company is not focused on or cares much about the impact on their customers.”
“It is going to be hard for consumers to understand that the transition to clean energy is going to cost them more,” Levis said. “On the other side, costs may go down, but this shouldn’t be used as an excuse for windfall profits.”
As a regulated monopoly, Xcel is guaranteed Huge profits... Xcel does not care about the rate payers.
https://freerepublic.com/focus/f-news/3973787/posts
Colorado Ping ( Let me know if you wish to be added or removed from the list.)
Rate payers ALWAYS, ALWAYS pay the bill.
Technology exists to use solid state fuel cells to covert NG to electricity at about 0.05 per KWhr. With Colorado’s cheep NG prices and price increases during the day, I am wondering if I need to move up my generator project and go off grid even though I live in the city.
Add to that the future black outs - soon to be caused by the political closing of already paid for, reliable, 24/7 power plants... in favor of not reliable solar panels that do not work at night, when it snows, nor when it is cloudy... and wind mills that also do not work 24/7..
The Dims lie their butts off when they say things like we'll get completely off of fossil fuels and such. They also lie when they say green energy projects they force onto you are the best way and for your own good. In reality it's to enrich their crony capitalists.
But if you buy a solar system that's customized for your specific energy consumption behaviors, it'll at least remove some of the control the Dims have on your energy needs. My solar system in Alabama produces about 3/4ths of the power I need. Thus I worry less if the govt will force my power company to shut down another coal plant. Nor do I worry much about the fact that natural gas is about twice as much on the commodities market as it was this time last year (due in large part to Biden starting a fracking ban, that impacts my power bill because my power company now produces more electricity from burning gas). All that stuff impacts me only 1/4th as much as it used to.
“put solar onto their homes”
I think an attractive storage building with a solar panel roof might be the way to go.
But it won't produce a high portion of your energy consumption if your home is fairly large. The surface area of a storage building isn't enough even with 400 watt panels. So you'll still fuss and grumble a lot when the Colorado power company finds reason to raise your rates.
https://www.qwant.com/?client=ext-edge-sb&q=Passivehaus&t=images
Most Passivehauser are quite ugly, but there are exceptions.
Xcel is a Minneapolis- based monopoly ... Xcel is guaranteed a profit on every dollar it spends building new facilities. This is a tremendous incentive for Xcel..
Rural electric bills from IREA in Colorado just went up about $40/month.
“...build a smarter, greener electric grid”
Whenever someone uses catch phrases you know they are lying to you.
Hey, lets have customers pay more to get less reliable and more ugly looking energy. Hopefully this will get cut back to size like most of their prior attempts.
Make the people pay. Make the voterd mad. They wont do anything about it....haven’t since Carter...beyond whining. The profits are up and the politicians get voted in again. System works great for those with the clipboards.
Colorado libtards need to shut up and pay the bill. They advocate green but want others to pay for it. Time to pay the piper.
The HELOC I took out to buy my solar will be paid off in 11 years with the savings I have in my power bill. That assumes an inflation rate of 2% to 3% per year on the kWh charge. If the inflation rate is higher because their being a monopoly has only the state standing in their way, I'll put even more energy savings into my HELOC.
Every month I calculate what my true kWh rate is with all the invisible riders they put into it. That's because I still buy some power from the grid, thus I get a bill showing the kWh purchased, how much my bill is, and I know what the monthly flat rate is just to stay connected. Meanwhile, my solar system also tracks what I buy from the grid. It also tracks how many kWh I consume, regardless of if it came from the grid or solar. The amount I consume minus the amount I buy from the grid equals the number of kWh I saved with solar. I multiply that by the rate and it tells me how many dollars I saved that month. That's how much I pay into my HELOC that month, which pays it off sooner than if I paid just the minimum payment.
When my HELOC is paid off any money I save beyond that will be to expand/repair my solar system to make me a little more independent, then a little more, and a little more. Eventually I might be 95% independent from the energy monopolies and their state and federal crooks.
There will come a time that you will be taxed for the sunshine you use.
There is no getting away from them.
They want you to have nothing.
Solar panels are ugly, not happening at my house. Besides, I’ll need new roof shingles in 3-4 years. Might reconsider after that.
Fine. So you know who to blame then if the grid fails.
We have no choice in the matter. Wholly captive we are.
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