Opinions

June 2017

  • Xcel Energy grid modernization should be kept in check
    The Denver Post - June 23, 2017
    The Colorado Public Utilities Commission this week took two steps to bring the state’s electric system into the 21st century. The commission agreed to a new revenue plan for Xcel Energy that isn’t simply tied to selling kilowatt-hours and it approved a $612 million plan for the utility to modernize its grid. “We are in a rare spot when it comes to the electricity market,” PUC Chairman Jeff Ackermann said. The old model in which all customers consumed electricity in pretty much the same way is vanishing as some add solar panels, others electric vehicles and others energy-efficient lights and appliances. “There is a substantial change to that one-size-fits-all approach.” The commission’s actions try to address that changing market. The revenue change, called “decoupling,” is aimed at encouraging Xcel, the state’s biggest electricity provider, to promote energy efficiency and put more rooftop solar on its system. As the utility does that, it sells less electricity and makes less money. To counter the trend, the PUC will set a fixed revenue target for the utility for the residential portion of revenues, where the utility says it has seen the most sales erosion. If Xcel exceeds that mark, the following year, the utility has to give the extra money back to customers in reduced rates. If it falls short, it gets to add a surcharge on bills. This should help remove any disincentives Xcel faces in expanding those energy-efficiency programs or rooftop solar installations. The grid upgrade will add voltage controls and monitors to the system, which will save energy, and so-called smart meters to every home. The meters can read household-electricity usage in real time and communicate with the utility. The ability to monitor the grid and track energy use as it is happening are keys to better managing the electrical system and developing new rates. Time-of-use rates, for example, charge customers more for kilowatt-hours when demand is high and less when it is low. Such rates can help reduce peak demand, shift electricity use to low-demand periods — better to charge that Chevy Volt in the middle of the night — and diminish the need for building new generation. Xcel also has a time-of-use rate pilot planned. These are big changes, and the commission has to be alert to unexpected costs and unintended consequences. Decoupling is being done as a five-year pilot with a cap of 3 percent on how much rates can be hiked. That is a good start. But we urge the commission to be ready to intervene if problems arise — particularly if rates show no sign of decreasing, which could impact families that already have trouble paying their electric bills. As for the grid modernization, it is a lot of coin. One of the ways Xcel makes money is by building infrastructure, getting the expenses into rate base and charging customers for it. The penchant for utilities to do this and the rate hikes they lead to can be a problem. Commissioner Frances Koncilja noted that in the last few years, the PUC has given Xcel the green light on about $2 billion in spending. The approved grid plan requires semi-annual reporting on progress. Encouragingly, the commission agreed to look for additional oversight measures. The price tag includes $110 million in “contingencies” because Xcel says that the price of adding this new technology are not well known. We urge the PUC and its staff to keep a sharp eye on costs. Commissioner Wendy Moser said that giving Xcel the go-ahead doesn’t mean costs won’t be challenged and that Xcel will have to justify them. We second that.

March 2017

  • APS rate hike has critical flaws, consumer groups say
    Arizona Rrepublic - March 23, 2017
    Arizona Public Service Co. has won over the state consumer advocate and the staff for utility regulators regarding its need for a rate increase, but the proposed hike still has a number of opponents, including AARP, energy conservation advocates and individual consumers. "We think it takes away choices from consumers,” said Steve Jennings, associate state director for AARP. “Forcing new customers on a time-of-use rate, that is a concern for us,” said Jeff Schlegel, the state representative for the Southwest Energy Efficiency Project (SWEEP), a conservation group.
  • State funding for public transit absolutely needed
    Colorado Statesman - March 5, 2017
    SWEEP Transportation Program Director Will Toor explains why Colorado needs state funding for its transit systems.