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Tuesday May 21st 2019

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Partnering with Xcel


By

photo courtesy Roger Wolvington

As Boulder considers the Xcel franchise agreement it is important to look at their past record and attitude. Consider Boulder’s Carbon Action Program. While Xcel offers a range of energy efficiency programs they are primarily concerned with the continued operation of their coal fired power plants. This is made clear by their policy regarding outdoor lighting. Xcel does not offer rebates for energy efficient outdoor lighting because these lights are on at night. While it is clear that we should be doing all we can to reduce carbon emissions at night as well as in the day time it is in the financial interests of the operator of a coal fired power plant to encourage wasteful energy practices especially at night, Coal power plants cannot be turned off when there is reduced energy use so utilities encourage wasteful energy habits especially at night. Xcel is not going to be a proactive partner in the effort to reform our energy use patterns.

Promises

When Boulder first began to examine the question of the municipalization of our electric energy system Xcel offered a very tempting prize. Xcel would make Boulder Smart Grid City. They were going to spend $100 million making Boulder the showcase of the nation in smart energy use and the development of infrastructure for the introduction of electric vehicles. The use of electric vehicles is crucial for the reduction of our carbon footprint. An electric vehicle can be up to 10 times as efficient as a gasoline powered vehicle and if it is recharged with wind power or solar energy it is a zero emission option for personal mobility. Smart grid allows for several improvements that will help with the transition to clean electric transportation including time of use charging, power tagging and vehicle-to-grid storage of renewable energy.

A Missed Opportunity

Recently representatives of the Chinese car manufacturer BYD were in Boulder. Warren Buffet is a partner in this cleantech company. BYD indicated that if Boulder had an aggressive smart grid program they would be proactive partners in showcasing the benefits of electric vehicles. Unfortunately Xcel’s Smart Grid program has been a bust. Not only have they failed to implement the technology, they spent only $40 million – not the $100 million they promised – and they are trying to get the PUC to let them pass those costs back to their customers in Boulder. Xcel has cost Boulder a key opportunity in reducing our carbon use.

Bad Attitude

Utilities encourage the growth of energy use over efficiency. In a recent article by the Rocky Mountain Institute it was pointed out that if all the utilities in the country were to simply adopt the efficiency standards of California it would reduce our nation’s coal fired power use, the major contributor to our carbon footprint, by 60%. A recent article in the Camera by Steve Pomerance shows that there is a level of corporate arrogance that is unacceptable in any business, much less a utility, that is granted a monopoly. Their inside joke is that since they get a guaranteed return on their investments and are given guaranteed long term contracts, such as the one with Boulder, they see all their new power plants as simply another “billion dollar block of concrete.”  They don’t care if the new power plant is a clean renewable technology or even if it is needed. They can always encourage more wasteful energy use by their customers. They simply are happy to burden people with more debt. Xcel is not the proactive partner that we need to move to an efficient and carbon free energy economy.

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2 Responses to “Partnering with Xcel”

  1. Michael Reid says:

    Steve, a couple of comments.

    (1) Xcel did not promise to spend $100 million of their money (or our money) on SmartGridCity. If you look at their white paper, http://smartgridcity.xcelenergy.com/media/pdf/SmartGridWhitePaper.pdf, you’ll see that they expected to invest $15 million and to get the rest of the project funded by other businesses — a “pay to play” model.

    (2) Investor-owned utilities like Xcel do not receive a “guaranteed return” on their investments. That’s a common misconception. Rates are set to provide a target rate of return, based on forecasted sales and costs, but the actual return varies with the weather, economy, how well they do at controlling costs, and more. In Colorado and most states, utilities have an incentive to sell more energy because it adds to profits; but several states have adopted “revenue decoupling” that removes the sales incentive.

    (3) Utility programs for outdoor lighting often have a promotional effect — they end up encouraging homeowners and businesses to add light fixtures and burn more kWh. I’m not sure the benefit of encouraging people to install *efficient* outdoor lighting is worth the additional consumption that might be stimulated.

  2. Steve Clark says:

    You are obviously a much more careful observer of policy that I am but lets look at what is really going on here.  In all the press articles about Xcel’s push to make Boulder Smart Grid City it says Xcel (and their partners) will spend $100 million dollars to do this. Xcel did nothing to correct this perception mainly because they never intended to make Boulder Smart Grid City but only to stop the discussion of municipalizing the electric system in Boulder. 
     
    Whether or not their guaranteed return is a “common misconception” or a reality this is what Steve Pomerance said in his article “Billion dollar block of concrete” and this  level of corporate arrogance  shows how far they go in abusing their customers for profit. They are not an organization that we should look to for help and leadership in getting to renewable energy. They have fought this every step of the way and we would already be there if not for Xcel. Again the reality is they almost never loose money on big central power plants and when they do they run to the PUC and ask to pass it on as “stranded costs” to the rate payers. They are the coal power industry and part of a very powerful $200 billion dollar a year industry in this country. They do not want to see their profits effected by efficiency or solar power.
     
    Xcel’s rebate program for energy efficiency is flawed because it is geared to meet the needs of a coal fired power plant not the need to reduce our CO2 emissions. As long as this is the case we are slaves to a machine that Xcel cannot turn off at night and that machine is killing the planet while they profit. 
     
    We need a proactive partner in getting down off the peak energy stupidity curve that Xcel has helped push us up. We need to stop using carbon based fuels for electric power and transportation and we have the technology to do this today. If it wasn’t for Xcel protecting their Valmont coal fired cash cow we would be making real progress in cutting green house gas emissions. Xcel has never been a friend of the planet or “responsible by nature” and they are unlikely to change.

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