Minneapolis-based Xcel Energy, the largest regulated, investor-owned utility operating in Colorado, is asking the state’s Public Utilities Commission to OK a $157 million rate hike on its 1.3 million Colorado electric customers.
Yet, the PUC’s own staff is recommending that commissioners instead roll back Xcel electricity rates by $57 million. The Colorado Office of Consumer Counsel, which advocates for residential and small-business power users, would go even further, proposing a $69 million rate reduction.
Xcel seeks the extra infusion of revenue primarily to pay for implementation of the General Assembly’s Clean Air, Clean Jobs Act passed in 2010—a costly and debatable policy whose consequences we have warned about for years. The legislation essentially pushed utilities like Xcel and Rapid City, S.D.-based Black Hills Energy, which serves Pueblo, away from coal, requiring the construction of a lot of new infrastructure by the utilities.
The law has allowed Xcel and Black Hills to recover the costs imposed by the conversion. But regulators and critics of Xcel’s request now seem to be saying that Xcel’s request is simply too much.
As reported by The Denver Post’s Mark Jaffe:
The company’s revenue proposal is excessive,” said Cindy Schonhaut, director of the consumer counsel’s office. “The numbers don’t merit the increase.”
In a letter this week to the PUC, the Colorado Consumer Coalition states the case against Xcel’s proposed rate hike even more bluntly, calling it “out of touch with reality”:
On behalf of electricity consumers, from residential customers to small and large business, the Coalition believes that Public Service Company’s request is extreme and unsupportable by any reasonable standard.
At issue is what rate of return on its equity Xcel should be allowed to recover. Xcel wants the rate pegged at 10.35 percent while analysts including the OCC and PUC staffs, as well as our own coalition, say it should be closer to 9 percent.
Arguably, the company just doesn’t have that much of a return coming to it, as critics quoted in the Post’s report this week seem to agree:
In its 2012 rate increase, Xcel got a 10 percent (return). The company consistently exceeded that cap, according to a filing by Charles Hernandez, a PUC financial analyst.
“That is a lot of return for a company that doesn’t have any risk, that gets a guaranteed return,” the consumer counsel’s Shonhaut said.
For our coalition members, though, the real issue is not so much whether a public utility such as Xcel deserves or even needs the money; it’s whether cash-strapped consumers in Colorado can afford it. As we state in our letter to the PUC:
Our coalition believes that fair and stable energy rates are vital to our state’s economic health and to the well-being of all its citizens—from the employers who create our jobs to households on limited or fixed income that struggle to pay their utility bills.
The PUC is holding a public hearing on Xcel ‘s proposed electricity rate increase today from 5 to 7 p.m. at the commission headquarters, 1650 Broadway, Suite 250, in Denver. The PUC also has scheduled hearings on the proposed hike for next January.
We encourage our members, and all power consumers across Colorado, to send comments on the proposal to the PUC via email. Written comments can be sent to the PUC at dora_puc_complaints@state.co.us. Be sure to note Docket No. 14AL-0660E in your comments.
The commission can’t stand up for us unless we are willing to stand up and be counted.