If the utilities’ proposed project moves forward, Colorado ratepayers will be forced to foot the bill for this overpriced project while Xcel’s shareholders make hundreds of millions in profits over the life of the line.
Sound unfair? It is.
The way Colorado regulates electric utilities, they have no incentive to be cost-conscious in the selection or sizing of their projects. In fact, they have a financial incentive to pursue the most expensive project possible. In Xcel’s own investment presentations, they highlight transmission lines as one of their top money-making opportunities.
Since Xcel’s profit is calculated as a percentage of the project cost, the bigger and more expensive the transmission line is, the larger their profit becomes. It’s no wonder that, despite the fact that Xcel has no current plans to put any new renewable energy on the line, they are still aggressively pursuing this overbuilt project.
The Colorado Public Utilities Commission (PUC) is supposed to be looking out for the utility customer in these situations. After hearing all the facts, the judge overseeing the PUC case recommended a ratepayer protection that would require a minimal amount of energy to be carried on the line within 10 years of its completion. If not, Xcel would be forced to refund half of its cost to ratepayers.
Faced with having to guarantee that there was a need for this money-making transmission line, Xcel threatened to walk away from the project. In yet another example of the disturbingly cozy relationship between the utilities and the PUC, the PUC Commissioners responded by overturning the judge’s ratepayer protection.
For more information on these unfair money-making schemes, please read a Denver Post article written by Louis Bacon, owner of Trinchera Ranch.