Xcel Energy’s Green Pricing May Be Abolished in Colorado

Date: 6 Oct 2006 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

The fact that a small portion of Public Service Company of Colorado’s (Xcel Energy) ratepayers pay a “green premium” on their electric bills to support 60 MW of wind energy while 1000 MW of wind power costs will be spread over all customers is deemed to make “little sense.” The PUC staff have proposed the elimination of Xcel’s Windsource green power program and for the program’s cost to be absorbed by the entire ratebase.

A recent story in The Denver Post said that spreading Xcel Energy’s Windsource program costs among all ratepayers would create a “negligible” increase in rates, a small fraction of 1 percent. The story added, “Customers who buy all their power from Windsource now pay an average of $58.55 a month, not including taxes and franchise fees. Typical customers using conventional power pay $52.58 a month. For a two-month period last year when natural-gas costs rose, Windsource power was priced up to $10 a month less than conventional power.”

To our knowledge this is the first time that a state regulatory agency has advocated that a green pricing program be scrapped and incorporated into the general rate base.

In August 2006 testimony submitted as part of a proceeding (Docket No. 06S-234EG) related to Xcel Energy’s proposed rate increase in Colorado, PUC staff engineer Richard P. Mignogna said, “Windsource comprises approximately 60 MW (actually a total of 61.35 MW to be precise) of wind resources on a system that will soon contain more than 1000 MW of wind generation. Charging a small group of customers a price premium for these 60 MW when the costs of the remaining thousand will be shared by all ratepayers makes little sense.”

Mignogna’s testimony was also critical of Xcel Energy’s cost recovery analysis and accounting of its Windsource program. The PUC staff says that the program is over-subscribed and the utility is generating revenues far above the program’s cost. Xcel claims that the program is not covering its costs and wants to raise the green power premium for program participants.

The PUC proposal to drop the Windsource program is opposed by Xcel Energy, the Colorado Office of Consumer Counsel and Western Resource Advocates.

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John Farrell
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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.