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Xcel Energy has requested another rate increase through the Public Utilities commission (PUC). The $240M hike includes $53M to cover carrying costs for excess capacity.
Black Hills Energy recently received $23M in rate increases to recoup costs associated with additional generation construction.
The story behind the capacity increase begins in 2004 when Xcel told Black Hills they would not extend the contract for 300 MW of generation. Xcel energy predicted they would need an additional 1000 MW of capacity by 2010 and could not spare any generation. Since then, the forecast has been cut to 292 MW. Meanwhile, Black Hills built two gas fired plants at the Pueblo Airport of 180 MW and 200 MW, costing them $227M and $260M. The PUC allowed the $23M hike to Black Hills to help recoup the total generation construction cost of $487M and additional transmission costs.
Now Xcel wants ratepayers to pay for the excess generation due to their planning miscalculation.
I received a notice of change of electric rates from Xcel Energy that states the request is for $141.9M. The interim request is $100M or about $2.70 per month for the average residential customer. The new charge will be included in the GRSA line of our bills.

February 16th – a day to remember for all Xcel customers and the solar energy industry. Xcel Energy announced they have filed with the Public Utilities Commission to reduce the current rebates for new solar installations. The current residential rebate of $2.35 per watt (<10kw) includes a rebate of $2.00 and a REC (credit) of $.35. Their proposed total rebate is $1.25 which includes a rebate of $.25 and REC of $1.00. In the interim, before the PUC commission decides, Xcel set the REC at 1 cent and rebate at $2.00. However, Xcel froze all new applications, so the interim is moot.
What frustrates the solar industry most is the action of Xcel to abruptly stop the program when a plan was in place to reduce rebate payments gradually as the renewable energy standard goal was met. The REC component is scheduled to drop to zero as the total residential capacity reached about 100 MW. Renewable Energy Standard Adjustment (RESA) income from a 2% rider on Xcel customer billing provided the funds to continue the Solar Rebate program. We voted to continue supporting renewable energy.
This action will cause a storm before the PUC meeting in May, and most likely the rebates will be restored to some degree, but the damage to the solar industry has been done!

Black Hills Energy suspended its solar rebate program citing internal problems with the administration of the program. In the past Black Hills was criticized by the PUC for lacking specifics in their compliance reports.
I hope that Black Hills Energy somehow gets back on track with the essential solar program. I suggest some program management training for utility employees or have Black Hills Energy subcontract the work to an independent consultant.

Xcel Energy applied for a Certificate of Public Convenience and Necessity (CPCN) as suggested in my blog a few months ago. Xcel is attempting to recoup SmartGrid costs that are now about three times the original budget estimate (the original budget was $15.3M, and costs are estimated at $44.8M). A rate increase was requested in 2009. Approval of the CPCN is necessary to move on the rate increase for SmartGrid.
I think it is time to stop throwing good money after bad. Xcel has shown they cannot deliver on the promise of SmartGrid. Only 43% of the meters in Boulder are converted to the Landis and Gyr (L&G) Focus meter, and customers have found that real-time energy data is not readily available through the Xcel “My Account” website.
Xcel officials claim the extent of the costs could not be fully known before contruction began on the first large scale test of its kind! However, they could have asked or performed some due diligence.
Let’s hope the PUC catches on.

The Sunday Boulder Camera (Feb 21) published a pointed commentary by Anne Butterfield about Xcel’s Smart Grid City. I agree with Anne and the PUC that a certificate of public convenience and necessity is needed to convey to the public if there is some substance to all the SGC hype.
I attended two presentations by Xcel that provided much hype for a smart grid system, but delivered little insight into deliverables. Most of the presentation was pie in the sky talk about shaving peaks with electric vehicle battery storage, and controlling a customer’s thermostat. The only realistic near-term advantage of the SGC is that of monitoring voltage at the customer’s service and locating outages without relying on telephone messages from the customer. This is a huge advantage for Xcel – reduce truck rolls for outages or problems on the customer’s side of the meter.
I worked for Xcel for 8 years on their control and data acquisition systems (SCADA), and in planning department. I have a pretty good idea what is driving them. Xcel management realizes they can use this SGC hype to get money for capital investments for their needs, and worry about deliverables later. However, the “cutting edge technology” excuse for delay and cost overrun is getting thin.
I have 7 smart monitoring systems online and operating, compared to 8 for Xcel! My systems cost only a few thousand dollars instead of millions, but I don’t have the hype!

Xcel announced the REC portion of the renewable energy rebate has decreased from $1.50 to $.85 effective December 2, 2009.
The total rebate and REC from Xcel is now $2.85 per watt ($2.00 rebate and $0.85 REC). The reasons behind the decrease is the small (<10 kw) program has filled up, and prices for equipment (i.e. PV panels) has decreased significantly in the past few months.
This means that the total rebate and REC for a 10kw system decreases from $35,000 to $28,500.