SmartGridCity Decision Nears

The Office of Consumer Counsel has filed its objections to the recommended decision in the SmartGridCity proceeding.  Now the decision is before the Commission.  What will they do?

The clock is ticking down on a decision by the Colorado Public Utilities Commission on whether to grant a certificate of public convenience and necessity to Xcel Energy to enable it to recover its costs in the failed SmartGridCity project.  The Administrative Law Judge hearing the case has recommended full recovery, and of course, the interveners in the case object saying Xcel shareholders not ratepayers should be on the hook for the cost overruns that gave this project a bad rap.

Xcel seeks to recover $44.5 million from its 1.4 million Colorado customers.  The CPUC is bound by the law to make a decision which is supported by the manifest weight of the evidence NOT whether Xcel’s customers are mad about the cost overruns.

For the CPUC this should be an easy decision since the evidence supports issuing the certificate and allowing recovery of Xcel’s reasonable and prudent costs.  Face it, the CPUC was complicit in getting Xcel Energy into this SmartGrid City project and cheered it on from the sidelines like the good politicians they are—until problems developed.  When the costs to remedy the problems went up the CPUC cheerleaders turned to skeptics and now the question before the panel is ‘who will hang for this?’

A fair and balanced regulatory process does not work that way, and despite the consumer advocate’s objections to the recovery, the commission is likely to award some or all of it because if they do not what utility executive will be willing to experiment with new technology, or design a new rate structure, or let the state’s politicians talk it into participating in good news events like cheering for smart grids.

We get it.

The potential for many long term benefits from applications of smart grid technology are real but so are the risks and we must accept both. The lessons from SmartGrid City are also real even in its failure.  It taught us plenty about consumer reaction and behavior where even in one of the most environmentally aware places on the planet, Boulder, Colorado, consumers are unwilling to change their behaviors if it forces them to change their usual and customary lifestyles.  This is a BIG DEAL and well worth the cost of this project to prevent future, larger mistakes.

Xcel Energy should be granted full recovery on the basis that this was a pilot program designed to test the rollout of smart grid technology across its entire system.  The purpose of a pilot—as was clear to the CPUC and everyone else—is to EXPERIMENT and guess what, stuff happens in experiments.

The Consumer Advocate is doing a very good job of forcing the tough issues to the surface and requiring that the regulators face the music and follow the law.  Consumers need to know that only reasonable and prudent costs will be imposed on their utility rates.   That is not to say that the CPUC won’t try to save face by whittling away at some of the cost recovery—these are after all embarrassed politicians who need someone to blame.  But any material disallowance would be unreasonable given the manifest weight of the evidence.   The ALJ called it correctly.

You can keep track of this Smart Grid City proceeding at the CPUC Web site’s search feature; enter 10A-124E into the “proceedings” box and click on “run.”

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