728 x 90
728 x 90
728 x 90
728 x 90
728 x 90

Advice for Incoming PUC Chair

For 4 years, Public Utilities Commission Chair Ron Binz has been a key driver of the New Energy Economy. Under his watch, the PUC changed its mission, from advancing lowest cost electricity, to fighting climate change with expensive green energy. As was first reported here, Binz is leaving life as an environmentalist PUC Chair, for life as an environmentalist consultant. In the wake of Binz’s agenda-driving chairmanship, however, there’s no heir apparent to lead the PUC.

Commissioner Matt Baker arrived at the PUC directly from the sort of career that Binz soon will adopt. That is, he had been a professional environmentalist; the feather in his cap is his successful lobbying campaign for Amendment 37, a green energy production quota. Thankfully, Commissioner Baker has proven unwilling to assert himself, likely due to the fact that he is a tenderfoot. He was appointed to the PUC despite having no relevant experience.

Recently, I’ve made a point of singling out Commissioner James Tarpey as the most reasonable of the New Energy Economy era PUC Commissioners (see here and here). My almost-exact words were, “A PUC with three James Tarpeys would have been a lot different.” (That’s definitely the gist of it.) And yet, in practice, he’s consistently sought consensus rather than follow through on his knee-jerk incredulity at the costs of the New Energy Economy.

The upshot is that Chair Binz’s successor could shape the PUC, if he or she has a willful personality. With this opportunity (or threat) in mind, I put forth the following, pro-ratepayer platform for the incoming Chair. It’s a simple dichotomy: (1) Listen to the staff; and (2) don’t listen to Matt Baker.

Plank #1: Listen to the Staff

In a recent post, I aggressively questioned the Office of Consumer Counsel’s commitment to protecting consumers. In other posts, I’ve expressed doubt about PUC’s concern for ratepayer well being. Where the OCC and the PUC have let ratepayers down, however, the PUC’s staff has been hard at work trying to inject some common sense into these proceedings.

In almost every docket I’ve followed, I’ve approved of the PUC Staff’s position. I’m not saying that because I think highly of my imprimatur; rather, I cite my approval because my opinions on these matters are so absolutely on the side of the consumer, at the expense of trendy “green” schemes. In this fashion, I’m an extremist, and so is the PUC Staff. Consider,

  • During the HB 1365 docket, it was the staff that discovered Xcel was high balling the cost of emissions controls, and low balling the cost of replacement natural gas generation, so as to make fuel switching seem more affordable vis a vis the status quo.
  • The Independence Institute’s Amy Oliver Cooke and I have gone to great lengths to oppose the $20 carbon adder. The PUC Staff, too, opposes the $20 carbon tax.
  • Amy and I also have exposed the budgeting tricks and accounting gimmicks, authorized by the PUC, with which Xcel has avoided the retail rate impact of the Renewable Electricity Standard. The PUC Staff agrees!

In sum, the PUC Staff’s recommendations aren’t always perfect, but they are pretty darn good. If the staff could make policy, there wouldn’t be a New Energy Economy. So, the most important plank in this ideal platform for the incoming PUC Chair is, “Listen to the PUC Staff!”

Plank #2: Don’t Listen to Commissioner Matt Baker

“Don’t Listen to Commissioner Matt Baker” is superfluous advice, if our ideal PUC Chair follows Plank #1, “Listen to the PUC Staff.” As a rule of thumb, Commissioner Baker supports the opposite of what the PUC Staff recommends, which, as I explain above, is the best policy. Therefore, if you are listening to the PUC Staff, you are almost certainly ignoring Commissioner Matt Baker.

This dynamic was displayed during Xcel’s 2009 Renewable Electricity Standard Compliance Plan deliberations. Staff testimony made mincemeat of one particularly egregious green energy subsidy, the Solar*Rewards program. In the face of these criticisms, Xcel agreed to scale down the subsidy. Problem solved, right? It was until Commissioner Baker issued a Recommended Decision. Here’s what he said (p. 29),

“Given the benefits and future potential for solar resources, the Hearing Commissioner [Baker] is persuaded that [Xcel’s] proposed drop-off in on-site solar acquisitions in 2010 and beyond is too aggressive. Accordingly, the Hearing Commissioner [Baker] shall require [Xcel] to propose much more substantial levels of on-site solar acquisitions in its 2010 Compliance Filing.”

Thus, Commissioner Baker snatched ratepayer defeat from the jaws of victory. Sadly for Xcel customers, this story has an even unhappier ending: At the behest of Commissioner Baker, Xcel went on a solar binge. This year, the Solar*Rewards program will cost at least $97 million, or twice the statutory retail rate impact limit, all in order to subsidize wealthy environmentalists.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.