Ratepayer backlash for Xcel?

SmartGridCity cost recovery continues

Phil Carson | Feb 14, 2012

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It may be February, but Colorado's Front Range is heating up a bit as the regulatory wheels creak back into action over Xcel's continued cost recovery efforts for its SmartGridCity investment.

Boulder also has been active on its effort to municipalize, selecting a Denver law firm to represent it in condemnation proceedings—should they be necessary, which few doubt, if the city moves ahead.

The two cases technically are only tangentially related but, politically, they're first cousins, if not Siamese twins. Some believe that Xcel located its smart grid experiment in Boulder to mollify local interest in rejecting Xcel as local provider when its franchise agreement came up for renewal last year. Boulderites rejected franchise renewal anyway.

The next milestone comes in a pre-hearing conference on Feb. 22 to establish a procedural schedule and discovery protocols for an actual evidentiary hearing, which is yet to be scheduled. (The cost recovery case is proceeding number 11A-1001E. Go to the Colorado Public Utilities Commission site, enter the proceeding number in the search e-filings tab and hit "search.")

(For a list of our latest articles on this subject, see the links at the end.)

Participants must address how the cost recovery case relates to Xcel's current rate case (docket 11AL-947E). The roster of participants in this phase of cost recovery remains much the same as the last: the Climax Molybdenum Company, CF&I Steel L.P., the Colorado Office of Consumer Counsel, the city of Boulder and one citizen.

Though a surprising number of ordinary ratepayers have weighed in on this cost recovery case (those on record are quoted below), only one, Leslie Glustrom, has attempted to master the arcana of the case and has sought and been granted status as an intervener.

Boulder has petitioned to intervene to possibly address "whether the capabilities of SGC have been or will be realized, whether SGC will become an integral part of the distribution system on a going-forward basis, pricing and in-home smart device strategies, ongoing pilot projects related to SGC, SGC value propositions and the costs of the SGC program"—in short, the basis the CPUC set for this final phase of cost recovery. 

Ratepayer comments are useful to reference here for several reasons. First, ratepayers rarely are heard. Second, all utilities should recognize that times are changing much faster than they understand. Are we looking, as one citizen below suggested, at a tsunami of change sweeping out old regulatory models and bringing a new dawn of oversight? Doubtful. What's changing is that Americans who pay the bills have seen their assets and income erode while those entities with Machiavellian opportunities pushed hard for what they can get. Ratepayers, in many cases, are tired and angry. Despite attempts to market itself as a neighbor, Xcel seems to have produced significant resentment in Colorado and the whole industry could learn a lesson here.

From the tenor of the remarks, however, that lesson is not wholly about overreach around cost recovery. I sense that the letter writers are the "skeptics" often discussed in smart grid demographic discussions. Keep in mind that incensed ratepayers are the likeliest to comment publicly, so our sample, while homogenous and perfectly representative of comments on record at the CPUC, is skewed. Still, everyone in clean energy should listen for the embedded nuances.

"The entire state should not pay for Boulder's Smartgrid. Boulder should pay for it," wrote William Newell. "I live in Evergreen and I get nothing from a Smartgrid [in Boulder]. If I had been asked about it before they started, I would have said no. Also, if Xcel went over budget, let them pay for it."

"There was discussion about who would pay for this in '08," wrote Jim Fuxa of Frisco, Colo. "Now Excel [sic] wants all of the state consumers to pay for Boulder's desire. Boulder Excel customers alone should pay for the cost of the smart grid. Our rates have already increased much higher than the inflation rate due to government regulations."

"When will utilities ... take responsibility for the[ir] cost over-runs?" asked Gladys Rey Mendez, whose email subject line read: "Cash cow = Customer." "In this case the utility could have installed a wireless mesh network with RF transmission ... But they chose to trench and lay fiber for a distant, radially fed area. Now the utility wants to rate-base the balance of the cost of an experiment and collect from the customers who had no association with the experiment."

"I am a rate payer and have lived in Colorado for over 45 years," wrote Judy Falco. "And I am appalled at EXCEL's attempt to recoup the full cost of the City of Boulder's Smart Grid project by charging Colorado ratepayers another $16.5 million. We were told in 2008 that the cost would be $15 million and that investors would fund the rest of the project. The total is now about $45 million. And, where are their investors? The PUC should make Excel come up with their overages ... Can't believe the PUC is letting Excel do whatever they can get away with. Where is any kind of consumer protection??? The PUC is allowing them to recover $27.9 million ... Why??? This is a terrible way to run one of the most important elements of our economy. Excel has way too much influence and power! When will it stop? Do we need to get rid of the people at the PUC and design a less corrupt 'commission' to handle publicly funded utilities? Excel is never told 'no'—they gouge their subscribers any way they can and I am sick of it. If I could move somewhere else or just be able to use a different utility company I would jump at the chance."

Listening to your customers is recommended. But what result could possibly be expected in this case? There is severe lack of accountability at Xcel's executive helm, no doubt. Yet Xcel's leaders will reap bitter fruit from this case if they look to invest further in smart grid in the utility's eight-state service territory.

Too harsh? We here in Denver all know wonderful, hard-working people who work for Xcel, some of whom put their lives on the line to ensure we have power. Those employees should be disappointed in their leadership that it has deemed fit to place its failures on the backs of ratepayers rather than taking responsibility for their mistakes. 

"Xcel: SmartGridCity Value Established"

"SmartGridCity: Did Xcel Get Results?"

"The Trouble With (For) IOUs"

"Boulder Rejects Xcel"

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757

 

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