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Guest Commentary, Leslie Glustrom, Denver Post: Xcel customers must band together to fight hikes

As published on 4/30/2012 in the Denver Post, excerpts from a guest commentary by CEA Research Director, Leslie Glustrom,

“Colorado’s Public Utility Commission has just approved another rate increase for Xcel. If you are an Xcel customer, your electric bill will go up yet again on May 1.

The residential rate increase will be about 5.5 percent phased in over a three-year period and add about $114 million to Xcel’s annual revenue. This is on top of rate increases in 2007, 2009 and 2010 that raised residential bills by about 20 percent. Commercial and industrial customers will see lower percentage increases.

So what is driving these rate increases? The answer is clear: Most of the hikes are associated with Xcel’s investments in fossil-fuel resources. The 2007, 2009 and 2010 rate increases were largely driven by the need to begin recovering the nearly $1 billion that Xcel spent on the new Unit 3 coal plant in Pueblo, which helps serve Xcel’s Denver metro load.

The largest driver for the May rate increase has been Xcel’s decision to terminate its wholesale contract with Black Hills Energy, which serves Pueblo and the Arkansas River Valley. Xcel’s request to have retail ratepayers make up for the lost revenue was strongly opposed by many experts testifying on Xcel’s current rate increase. These experts pointed out that business decisions made on Xcel’s wholesale side should not add to the financial burden of Xcel’s retail customers who bore no responsibility for Xcel’s decision.

Why are the Public Utilities Commission and the Office of Consumer Counsel — which are supposed to represent residential, agricultural and small-business ratepayers — not fighting these rate increases harder? The staff at the PUC and the OCC include many hard-working and dedicated analysts, but Xcel is a very large monopoly with more than $3 billion in revenues each year. Moreover, all of Xcel’s rate case costs are referred to as “costs of business” and are passed on to ratepayers.

There are solutions, but in order to achieve them, ratepayers will have to band together in the face of Xcel’s tremendous financial and political strength.”

Leslie Glustrom (lglustrom@gmail.com) is director of research and policy for Clean Energy Action.

For original article in its entirety: Guest Commentary: Xcel customers must band together to fight hikes – The Denver Post

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