From Colorado: Xcel Energy’s Green Dreams Are a Farce
My friend Amy Cooke from the Independence Institute in Colorado recently wrote the article below about how Xcel energy is seeking to leave Colorado ratepayers on the hook for coal plants they are shutting down decades ahead of schedule. It’s the same story I wrote about in Wisconsin, where WE Energies is attempting to make $430 million in profits after retiring a perfectly good coal plant.
In Colorado, Xcel wants to close down the Comanche 1 and 2 plants so because it boosts their guaranteed profits by allowing them to build more wind, solar, natural gas, batteries and transmission infrastructure. This is also called padding the ratebase, but I’ve also started to call it Greenplating the grid because most of the new investments are for “green” energy projects.
You can also read Amy’s article here:
Last year, Xcel Energy sought and received approval from the Colorado Public Utilities Commission for its ambitious Colorado Energy Plan, a massive, $2.5 billion fuel-switching scheme that intends to close two Pueblo coal plants decades ahead of schedule and replace them with industrial wind and solar farms. An additional solar farm, proposed during the same period of time, ultimately convinced EVRAZ Rocky Mountain Steel, Xcel’s biggest customer and one of Pueblo’s largest employers, to keep its business in Colorado.
Xcel’s proposals were farcical from their inception, so it’s hardly a surprise that they’re failing before they can even begin. Last week, the monopolistic public utility announced that it will be taking new bids for the EVRAZ solar project after the contractor that originally won the bid at an impossibly low price revealed it couldn’t complete the project at the rate it offered. The same contractor, California-based Coronal Energy, has hinted it may have similar struggles with another 75-megawatt solar project for Xcel.
These are just the beginning. When Xcel unveiled its plan, it boldly claimed that industrial wind and solar had become cheaper than maintaining existing coal power. Xcel even testified that the cost of solar would continue to drop — a prediction that didn’t age well.
But a year ago, this turned the heads of the rate-paying public, an adoring media, and most importantly, Xcel’s Wall Street-based shareholders, who understood that the mere construction of government-blessed projects would pad the utility’s bottom line, regardless of their efficacy.
No group is less surprised than the Coalition of Ratepayers, a Colorado nonprofit concerned with issues impacting small business and residential ratepayers. The coalition intervened during the CEP proceedings and in testimony said repeatedly that those shockingly low bids didn’t include all costs associated with the early plant closures and renewable build-out.
Still, Xcel spent months assuring both the public and the Public Utilities Commission that its grandiose plan would add no new costs to ratepayers. The company’s faulty math was laid to waste almost immediately at commission hearings, but that very commission refused to let the public interest get in the way of the warm and fuzzy feelings that green dreams provide.
Before the vote on whether to approve the closure of the coal-fired Comanche I and II power stations in favor of hypothetical wind and solar fantasies, Commissioner Wendy Moser conceded that the proposal was rooted in misdirection, stating at the time: “The customers of Xcel Energy will pay for the retirement of these plants and it will show up in rates. So, don’t think that this is free and that it’s going to be borne by somebody else.”
Nevertheless, Moser and the other two commissioners Frances Koncilja and chairman Jeff Ackermann voted in favor of the plan. But it was all a charade. As Public Utilities Commission spokesman Terry Bote told the Denver Business Journal last week: “We are expecting a filing from Xcel on possible changes to the (Colorado Energy Plan), but nothing has been filed to date, so we are not in a position to talk about it.” Moser is no longer at the PUC, but Ackermann and Koncilja remain.
Your tax dollars are hard at work, supporting this interminable runaround. Your after-tax dollars stand to work even harder once these presumed revisions to the Colorado Energy Plan are implemented. Xcel and the Public Utilities Commission can’t lose; only the utility’s ratepayers will.
Xcel’s shareholders are certain to profit handsomely regardless of what the end result means for Coloradans’ electricity bills, while the commission continues to receive “atta-boy” pats on the back from its cheerleaders in the media, whose tails wag furiously at any mention of the word “renewable.”
None of this is rooted in the reality that Colorado is blessed with abundant, affordable energy sources today. If, in 20 years’ time, industrial wind and solar prove cheaper than natural gas and coal, then market forces will dictate the switch that Xcel seeks to force upon us right now. But in colluding with the Public Utilities Commission and accepting unrealistic bids from renewable contractors who aren’t even close to ready for prime time, Xcel is moving for the sake of motion at its Colorado customers’ expense.
Amy Cooke is executive vice president of the Independence Institute, a free-market think tank based in Denver. She resides in Greeley.