As the programs stand now, Xcel argues that non-Boulder customers are being forced to subsidize the city’s creation of a municipal electric utility.
“This is nothing against Boulder,´ said Jerome Davis, regional vice president for Xcel. “This is nothing against municipalization. … This isn’t about Xcel being retaliatory. It’s really about protecting non-Boulder citizens.”
Xcel’s reasoning behind the application to the PUC is that the various rebates and incentives paid to customers for doing things like adding solar panels to their homes or purchasing energy-efficient appliances are funded by all Xcel ratepayers through the Renewable Energy Standard Adjustment and the Demand Side Management Cost Adjustment on their bills.
Boulder customers, Xcel asserted in a press release, “have historically participated in these programs at higher rates than others throughout Colorado,” meaning Boulder customers reap more benefits from the programs than they pay for. The problem, Xcel said in its application to the PUC, is that if the city of Boulder moves forward with creating a municipal electric utility, the city utility would receive the benefits of Xcel’s rebate and incentive programs.
Boulder earlier this month filed a notice of intent to acquire Xcel’s assets necessary to form a city utility, setting the stage for a potential condemnation trial if a deal can’t be reached through good-faith negotiations.
“These investments pay for load reductions, renewable energy supply and emission reductions that that will benefit the city, not (Xcel), upon any transfer of the service territory,” Xcel’s attorneys wrote in the PUC filing. “(Xcel) will seek compensation for these ‘damages’ to our prior investments in the condemnation proceeding. The issue that we bring to the commission’s attention now is how to avoid creating further damages or loss of benefits by continuing these programs in Boulder under their current terms.”
Xcel spokeswoman Michelle Aguayo affirmed that Xcel’s customers in Boulder who already have solar panels installed, for instance, would not be affected by the company’s proposed modifications. Going forward, however, Xcel is requesting a quartet of modifications that would affect any new Boulder participants in the voluntary programs.
One is that the utility would be authorized to include a termination provision in all new Solar Rewards contracts with Boulder residents that would allow the company to terminate its obligations to purchase energy and renewable energy credits from those customers if the city created its own utility. The utility believes such a right might already be implicit in its agreements, but is seeking clarity on the matter from the PUC.
The utility is also looking to modify its Customer-Owned Small Solar Rewards program to pay out benefits to customers over a period of 20 years instead of 10, using more of a “pay for performance” model that other Solar Rewards programs are based on.
Xcel seeks permission to limit new demand-side management investment in Boulder “so that the level of costs that we incur to fund new Boulder DSM participation in each year does not exceed the DSM electric revenue received from all of our Boulder customers in that year.”Demand-side management involves reducing electricity use through activities or programs that promote electric energy efficiency or conservation, or more efficient management of electric energy loads.
Finally, Xcel would defer offering its community solar gardens program to Boulder customers unless the city of Boulder at some point decided not to proceed with municipalization.
Davis said it’s not Xcel’s desire to limit its incentive programs in Boulder. Company officials say they’ve reached out to the city of Boulder repeatedly to come to some sort of agreement that would make the company’s non-Boulder customers whole in the event that the city created its own utility. The Tuesday filing noted that Xcel would be willing to withdraw the application for modifications if such an agreement could be reached.
“(Xcel) has once again made an offer to the Boulder City Attorney to continue all voluntary programs in Boulder without change if the city would commit to compensate (Xcel) for the benefits that a city utility will receive from these programs,” Xcel’s PUC filing stated. “To date, Boulder has not agreed to reimburse (Xcel) for any of these program expenditures.”
Boulder spokeswoman Sarah Huntley said the city’s attorneys were notified of Xcel’s filing on Tuesday afternoon and still needed time to assess its impacts.
She said city officials want to make the sort of agreement Xcel is seeking. But she said the city has also been repeatedly denied when asking Xcel for information about the number of existing contracts with customers, provisions of those contracts and the financial implications of such an agreement.
“Until we get a full accounting of those contracts, which Xcel Energy has refused to give us, it is very difficult for the city to be specific about how we’ll treat each contract,” Huntley said. “Having said that, city council and staff are unified in their commitment to helping solar customers remain whole and not be harmed by their willingness to be early adopters of this important technology.”
This is not the first time Xcel has asked the PUC for permission to modify its programs with relation to Boulder customers due to the possibility of municipalization. Xcel filed a similar request in 2012, but the PUC then determined that it was premature to decide the issue because Boulder was simply in an exploratory mode as it related to municipalization.
Boulder’s notice of intent to acquire, Xcel says, changes the game.
“Given the city’s recent actions taking this formal step toward taking over our business in Boulder, it is now appropriate to readdress this issue,” Davis said.