NewsCovering Colorado

Actions

AARP voices concern over renewable energy costs for consumers

New state laws allow power companies to pass through costs to ratepayers
Comanche Units 1 and 2.jpg
Posted at 9:46 PM, Jan 20, 2022

DENVER, Colorado — The AARP of Colorado this week raised concerns about rising utility bills and the costs associated with the conversion to renewable energy in our state.

While the group strongly supports the transition to renewable energy, leaders said they fear that residential ratepayers are being asked to absorb an unfair percentage of the costs of the transition.

Bill Levis, a retired lawyer and former executive director of the Office of Consumer Counsel (now the Office of Utility Consumer Advocate), gave testimony Wednesday on behalf of the AARP to the Colorado Public Utilities Commission.

The Commission is currently hearing a proposed settlement agreement in a rate increase case involving Xcel Energy customers.

"AARP supports clean energy," Levis said. "It's going to be put on those to a large extent who can least afford it and that's where our concern is."

In his arguments to the PUC, Levis listed a number of recently passed state laws that allow power companies to pass on their costs associated with the transition to renewable energy to ratepayers.

For example, Senate Bill 21-072 calls on electricity providers to create a Regional Transmission Organization under the newly created Colorado Electric Transmission Authority. Under this law, the PUC can allow power companies to recover subscription fees and other participation costs associated with joining the RTO.

Under Senate Bill 19-077, utilities can charge customers up to 0.5 percent of their total cost required to develop electric vehicle charging stations.

Senate Bill 19-236 allows utilities to charges customers a fee equivalent to 1.5 percent of their annual electric bill to pay for costs associated with the early retirement of coal-burning power plants through the year 2030.

"If the plants haven't been paid off, which they won't be by then because they have a useful life of at least 2040, and in the case of Commanche 3 in Pueblo 2070, the cost of those will be put in the rate base," Levis explained. "And who is going to be left to pay for the rate base but those who can least afford it?"

He noted that many businesses and affluent households can afford to avoid these extra costs by simply switching to solar. However, the cost of a solar installation is not practical for someone living on a fixed income.

"Those who can least afford the network are those that are going to be stuck with the bill," Levis said.

Keith Hay, the director of policy for the Colorado Energy Office, previously worked in an advisory role for the Public Utilities Commission.

He pointed out that the PUC, as a regulatory body, is responsible for reviewing the costs of utility investments and ensuring that the costs are reasonable.

"We are seeing an energy transition, I would say overall the state has been able to do that in a way that actually has kept costs quite reasonable," Hay said.

He added that the Polis administration has worked with lawmakers to pass a series of bills to help consumers reduce energy costs.

"Expanding the definition of customers who qualify for income supports, enabling investments in customer homes through energy efficiency that will reduce energy costs, and expanding the state's weatherization program," Hay said.

He also noted that the commission approved of the plans to close coal-power plants early because the replacement cost of renewable energy replacement was cheaper.

"When it looked at the evidence before it, it found that it was reasonably likely that customers would save a significant amount of money and that in any case, customers would not pay any more than they would otherwise pay."

The PUC has not yet made a determination in the current rate adjustment settlement case. Xcel asked the commission to increase the residential base rate by 13 percent. That increase has been reduced to 6.44 percent in a proposed settlement agreement.

Levis said the soonest the rate increase could reach customers' bills is in April.