Post # 58 - Xcel's SmartGridCity: Boulder, We Have a [Written] Decision

Following up on my prior posts (see here and here), the Colorado Public Utilities Commission finally released its written decision reducing $14.8 million in cost recovery from Xcel Energy SmartGridCity project in Boulder. The CPUC took this action despite a prior settlement, approved by a CPUC administrative law judge, that would have provide for cost recovery of $44.5 million.

Early last month, at its regularly monthly meeting, the CPUC voted to drastically reduce the cost recovery approved by its judge -- but t has taken a while for the agency to issue a written decision.

The written decision finally appeared about one month later. The CPUC criticized Xcel for failing to "articulate and defend a strategic plan for the use of SmartGridCity investment." The CPUC also expressed concern of whether the projected benefits would be actualized.

However, the CPUC will allow Xcel to recover $14.8 million upon demonstrating “the credible promise of consumer and utility benefits” and “the ability of customers to make practical use of [SmartGridCity] on their side of the meter through in-home devices.” But the CPUC wants to see a "robust" plan created with input from "academics, researchers, and customers."

Once again, a utility learns that customer buy-in for smart grid project -- especially smart meter projects -- is esential.

Post # 56: Xcel's SmartGridCity -- Moving Right Along?

My most recent post on Xcel’s SmartGridCity project in Boulder was last fall. At that time, Colorado’s Office of Consumer Counsel (and other parties) appealed a decision of a Colorado Public Utilities Commission administrative judge that would have allowed Xcel to recoup approximately $45 million in installation costs from retail ratepayers – about three times the company's original estimate. See Post No. 50.

The CPUC acted on the appeal a little over two weeks ago – but, interestingly, not in writing. The Denver Post, which apparently was the only publication presented present, reported that, at a January 5, 2011 meeting, the CPUC “sliced by 38 percent the $13 million a year the utility is charging customers for the Boulder-based pilot program.”

Because I don’t like to post about agency decisions I have not read – and because the CPUC normally issues written decisions within a week or so of its meetings – I held off posting. And I assumed the written decision would be available within a few days.

Well, I was wrong. As of today, the CPUC still not issued its decision, which is pretty unusual based on my understanding of its procedures. I don’t want to speculate on the reasons, and I will hold to my policy of not writing about orders that I haven’t read. But I figure at this point I should at least post a link to the Denver Post article, just to be current.

Perhaps some policy pronouncement is on the way. Anyway, presumably we will see something soon.

Post No. 50 - Xcel's SmartGridCity: Still Not Over

As I suggested in my most recent post, Xcel's victory at the Colorado Public Utilities Commission is my no means final.

While a PUC administrative law judge ruled that Xcel should be allowed to recoup approximately $45 million in installation costs from retail ratepayer -- about three times the company's original estimate -- administrative appeals to the full commission have been filed Colorado's Office of Consumer Counsel and two other parties. I do not yet have the filings, but their appeals are summarized here.

So the saga of what has been a smart grid poster child -- on way or the other -- continues.

Post # 49 - Xcel's SmartGridCity Wins Another Round

In another step forward for Xcel Energy's SmartGridCity project in Boulder Colorado, an administrative law judge for the Colorado Public Utilities Commission has ruled that Xcel may recoup nearly $45 million in costs from retail ratepayers -- an amount three time's higher than the company's original estimate. Next stop -- an appeal to the full PUC.

Xcel first announced that the company had chosen Boulder as the location to build its experimental smart grid in 2008. At the time, company officials estimated that the cost to the utility would be $15.3 million. However, the costs incurred by Xcel ballooned over time, causing the company to ask the PUC for permission to increase its rates to pay for the project. Last December, the PUC granted conditionally Xcel's request, but told the company that it must retroactively file for a Certificate of Public Convenience and Necessity, which gives the PUC more authority to regulate the project. The PUC ruled that if the certificate was not granted, Xcel would be forced to refund customers any money collected to pay for the smart grid.

Xcel filed its application last March, leading to contentious litigation before the PUC as to whether ratepayer benefits justified ratepayers bearing the costs. Last August, Xcel, the Governor's Energy Office and staffers at Public Utilities Commission proposed an agreement, recommending that the certificate be granted and that Xcel's cost recovery for SmartGridCity be capped at $44.5 million. It was this settlement agreement that the PUC judge has approved.

But the game is not over -- opponents can appeal the judge's decision to the full PUC. In particular, Colorado's Office of Consumer Counsel -- a state agency charged with representing the interests of residential, small business and agricultural consumers before the PUC -- has strongly opposed the settlement and is expected to appeal.

Post # 38 - Apparent Xcel Victory in Boulder

According to press reports, as part of settlement reached yesterday, staff of the Colorado Public Utilities Commission will not contest $44.5 million in costs associated with Xcel Energy's SmartGridCity project in Boulder. The Governor’s Energy Office also signed off on the settlement.

At issue was whether ratepayers or shareholders should foot the costs of the Boulder-based pilot project, which had tripled in price from initial estimates. Xcel Energy, the state’s largest utility, has attributed the cost overruns (from the initially estimated $15 million to the actually incurred $44.5 million) to unanticipated problems arising from laying fiber optic cable to 23,000 homes and related software expenses.

Overall, Xcel Energy serves approximately 1.1 million customers throughout the state. Despite the overruns and the fact that the improvements in power distribution and metering systems will be limited to 23,000 Boulder homes, Xcel argues that all ratepayers ultimately will benefit and should thus share the costs.

The PUC already had approved the costs as part of broad rate increases that went into effect at the beginning of this year, but had opened a separate case to consider getting back the money. Friday’s settlement apparently ends that challenge as far as PUC staff and the Governor's Energy Office are concerned.

However, the settlement will not apply to any expansions of the SmartGridCity project. Moreover, other parties to the PUC proceeding – Colorado's Office of Consumer Counsel, the community organization ArapaHOPE Community Team and a citizen intervenor, Leslie Glustrom – still will contest the rate increases for SmartGridCity at a hearing scheduled for August 31^st.

So the full implications of the settlement remain unclear, at least at this writing. But at this point, it looks like a potential victory for Xcel.