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Pueblo beware of Xcel’s promise of economic development

Pueblo beware of Xcel’s promise of economic development

Xcel Energy continues to make absurd claims about its Colorado Energy Plan Corporate Enrichment Plan (CEP).

The Coalition and others have debunked the cost-savings scam, but what about the economic development claims? One of our favorites is that the CEP, which will destroy 80 to 90, maybe more, good-paying jobs in Pueblo, is good economics for the city. To lend credibility to the claim, clearly it needs some, Xcel commissioned a self-serving study from the respectable University of Colorado Leeds School of Business.

To Xcel’s delight, the Leeds study painted a rosy picture following the loss of jobs with the closure of Comanche 1 and 2. There’s one huge problem with the study that renders the whole thing useless:

PSCo [Xcel Energy Colorado] provided data that included capital expenditures, operating expenditures, revenue requirements, and taxes for each scenario, consistent with the final Preferred Electric Resource Plan and Preferred Colorado Energy Plan as presented in the June 6, 2018 120-Day report. The research team worked under the assumption that the company provided good-faith estimates for each scenario.

Xcel supplied all the numbers. Leeds should have researched those numbers a little more before simply accepting them as “good faith estimates” because Xcel’s accounting and modeling have been thoroughly discredited in the company’s quest for approval of the CEP.

Colorado Public Utilities Commission Staff doesn’t trust Xcel’s numbers, writing this in public comments:

Staff is unable to conclude that the Preferred CEPP is more likely than not to produce savings. The modeling results presented by the Company contain a number of errors and a fundamental flaw, which are discussed below, that render the results suspect.

Colorado’s largest rural electric cooperative Intermountain Rural Electric Association (IREA) doesn’t trust Xcel’s numbers as former Moffat County Commissioner John Kinkaid pointed out in a letter to the editor that appeared in the Grand Junction Sentinel:

The plan ‘requires ratepayers to pay a premium for renewable generation levels that significantly exceed already-satisfied Renewable Energy Standard levels and is based on a deeply flawed model that inaccurately projects cost savings decades from now.’

The Coalition of Ratepayers has proven repeatedly that Xcel’s numbers are unreliable:

PSCo’s accounting has been riddled with biased assumptions, errors, and changes that are completely self-serving and call into question the Company’s credibility on numerous claims. Simply put, PSCo’s numbers are not trustworthy or accurate.

And the study itself? PUC Staff criticized it writing, “The Leeds report is not transparent, and the Company did not provide sufficient additional support to allow Staff to determine the quality of the results.”

Staff went on to provide an economics lesson that ends with its opinion of the CEP’s possible economic benefits to Pueblo:

Staff concludes that the Preferred CEPP may result in a positive economic impact for Pueblo County in the same way that economic activity is generated if a building is destroyed and rebuilt. The decision about whether a building should be destroyed and rebuilt should be made based on the value of that project, not the economic impact of an exercise that will utilize dollars that could be used for another possibly more beneficial purpose. The magnitude of the economic impact provided in the Leeds report is impossible for Staff to validate, but is likely much smaller than the estimate provided by Leeds.

Beware of Xcel’s false promise of economic development. The International Brotherhood of Electrical Workers (IBEW), Local 111, which represents Comanche employees, pointed out that during a 15 year period of time, the Leeds study indicated Pueblo likely would experience negative GDP growth.

We will know in a couple of weeks if the Colorado PUC will approve Xcel’s massive $2.5 billion fuel switching scheme. If the commission says yes, it will do so knowing that cost-savings and economic development claims aren’t true. In other words, Xcel will be allowed to get away with not telling the truth as it enriches shareholders at the expense of Colorado’s ratepayers and the hard working folks of Pueblo, who face an uncertain future.