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Irresponsible by ratepayers: bill looks to rein in Xcel’s abuse of power over developers

Irresponsible by ratepayers: bill looks to rein in Xcel’s abuse of power over developers

Working with Xcel Energy, the state’s largest monopoly utility, is worse than working with the State of Colorado because at least there is way to hold the state accountable through elected officials. Since Xcel is a private monopoly and PUC puppet master, it’s the only game in town. Residential and business ratepayers have no choice and no voice.

A courageous group of developers have had enough. They support SB17-271 “Investor-owned Utility Cost Recovery Transparency.”  I use the word courageous because some fear their support will lead to Xcel retaliation.

Here’s what is happening. A developer wants to build homes on a plot of land. In order to get a true cost of the project, he brings together everyone he needs, including infrastructure personnel, to get an accurate estimate. Everyone shows, everyone contributes, everyone provides cost estimates except Xcel.

Xcel shows up at the last minute with an invoice for whatever amount Xcel wants and says pay-it-or-else. Because Xcel is the only game in town, the developer has no choice but to pay the ransom cost estimate otherwise the project doesn’t move forward.

SB17-271 simply imposes some balance and requires Xcel and other monopoly investor owned utilities to provide cost estimates in a timely manner and a true up bill on those costs once the service is complete. In other words, standard business practice.

Not surprisingly, Xcel is lobbying hard against it. According to sources, Xcel claims the five-page bill is complicated. Here is meat of it:

(2) (a) WITHIN THIRTY-FIVE DAYS AFTER A UTILITY RECEIVES A WRITTEN REQUEST FROM AN APPLICANT TO EXTEND SERVICE TO THE APPLICANT’S PROPERTY, THE UTILITY SHALL PROVIDE THE APPLICANT WITH A WRITTEN ESTIMATE OF THE ACTUAL COSTS OF THE WORK INVOLVED IN EXTENDING SERVICE AND A SCHEDULE SETTING FORTH THE ESTIMATED TIME TO COMPLETE EACH ACTIVITY INVOLVED IN EXTENDING THE SERVICE. THE APPLICANT MUST SIGN AND RETURN TO THE UTILITY THE COST ESTIMATE AND SCHEDULE ALONG WITH THE AMOUNT OF MONEY INDICATED IN THE COST ESTIMATE BEFORE THE UTILITY BEGINS THE WORK TO EXTEND SERVICE TO THE APPLICANT’S PROPERTY. WITHIN THIRTY-FIVE DAYS AFTER THE UTILITY HAS COMPLETED THE WORK, THE UTILITY SHALL PROVIDE THE APPLICANT WITH A WRITTEN, ITEMIZED STATEMENT OF THE ACTUAL COSTS REASONABLY INCURRED IN COMPLETING THE PROJECT.

(b) IF THE ACTUAL COSTS LISTED IN THE ITEMIZED STATEMENT ARE MORE THAN THE ESTIMATED COSTS THAT THE APPLICANT PAID FOR THE PROJECT, THE APPLICANT SHALL PAY THE DIFFERENCE TO THE UTILITY WITHIN THIRTY-FIVE DAYS AFTER DELIVERY OF THE ITEMIZED STATEMENT.

(c) IF THE ACTUAL COSTS LISTED IN THE ITEMIZED STATEMENTARE LESS THAN THE ESTIMATED COSTS THAT THE APPLICANT PAID FOR THE PROJECT, THE UTILITY SHALL REMIT TO THE APPLICANT, WITH THE ITEMIZED STATEMENT, A REFUND OF THE DIFFERENCE.

In a competitive market, ratepayers wouldn’t even need this type of legislation because it would be negotiated between private parties. If the service is costly or slow, the developer would find another provider. But we don’t enjoy a competitive market so we’re stuck with whatever Xcel offers.

In theory, we shouldn’t need this bill in our regulated market because we have the PUC and the Office of Consumer Counsel (OCC) as ratepayer watchdogs. Yet, here we are with legislation that requires Xcel Energy to do the right thing because we can’t count on the PUC or the OCC. Furthermore, this bill has nothing to do with the PUC process anyway.

Sources say some of the rural co-ops are opposed because “what happens to Xcel ends up happening to us.” I’m not sympathetic to that argument because the language is perfectly clear that it doesn’t include the co-ops. We have a legislature so lawmakers can make these types of distinctions.

It’s important that principled lawmakers continue to challenge Xcel’s abuse of power, and that we, as ratepayers, support them when they do. We should also support ratepayers – in this case developers – who challenge Xcel. They aren’t asking for anything unreasonable. They simply ask that Xcel be required to follow standard business practices.

Reason should prevail, but this is Xcel and its army of lobbyists, who are paid a lot of money to make sure Xcel rather than reason gets its way. But this time could be different. The bill enjoys bi-partisan sponsorship with Republican Senator John Cooke (full disclosure, he is my husband) and Democrat Representative Dan Pabon. Testimony is this afternoon in Senate Agriculture, Natural Resources, and Energy Committee.

Amy Cooke
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