Opinion: SmartGrid City — You be the judge


The Camera`s story on Nov. 13 “Judge OKs SmartGrid fees” documented Xcel`s efforts to recover $44-plus million in costs on SmartGridCity. The administrative law judge awarded Xcel a Certificate of Public Convenience and Necessity, which may allow Xcel to keep the millions that they are already collecting from Colorado ratepayers. But as this Thursday`s Camera pointed out, the decision will be reviewed by the Public Utilities Commission. And it may go to court after that.
A CPCN is generally required before a project is started. That way we ratepayers are hopefully assured that, at the time of its planning and implementation, the decision is “prudent, in the public interest, and justified by the benefits of the project.” And we are protected from having costs triple, as happened with SGC.
The testimony before the judge was pretty damning. The Office of Consumer Counsel pointed out that Xcel was focused on preserving the Boulder franchise: “In deciding to go forward with the original scope versus a modified [smaller] deployment the Company was also concerned that moving to a modified SmartGrid deployment could affect ‘city perception` and noted that the ‘risk to franchise will need to be managed.` During cross examination, Mr. Wilensky (an Xcel/PSCo witness) acknowledged that this meant that the Company was concerned that if the Project was not what the City of Boulder expected, it might affect the Company`s ability to maintain its franchise agreement.” The OCC concludes, “While there is nothing inherently wrong with the Company considering its franchise agreement in making this decision, it is not fair for Public Service to ask that the cost ramifications of that decision be borne by its customers.”
The Governor`s Energy Office, which endorsed the CPCN, weakly supported SGC and the $44-plus million because for them SGC supports the Governor`s policy objectives. It is certainly nice that Xcel and the Governor have such a back-scratching relationship, but it is hardly a basis for arguing that building SGC was “prudent” or that we ratepayers should pay Xcel three times its original cost estimate.
CF&I Steel and Climax Molybdenum raised a rather interesting objection, which may put Boulder at some risk. They point out that state statute 40-6-103(1) provides, in summary, that no public utility, as to rates, charges, service or facilities, shall grant any preference or advantage, or disadvantage, to any person or corporation. It`s pretty easy to argue that the (very few) direct advantages of SGC accrue to Boulderites, and, if the judge`s decision stands, all Colorado ratepayers will pay, certainly a disadvantage. And I heard that at least one news channel is referring to “Boulder`s SmartGridCity.” All this makes me very nervous.
CF&I/Climax also pointed out that whatever Xcel learns from SGC (other than to not do it ever again) will be used throughout their service areas, the biggest of which is in Minnesota. So why are Colorado ratepayers bearing the full burden? Xcel proposes to track any benefits that are shared out-of-state, and create some form of cost recovery. In other words, Xcel tracks Xcel so it can give money back to the ratepayers. Are you kidding?
Boulder`s own Leslie Glustrom, who works tirelessly in our interest testifying at the PUC, filed against the CPCN and $44-plus million payment. I loved one of her examples of Xcel`s lack of prudent decision-making: “Remarkably, one of the reasons stated by the Company (Xcel/PSCo) for the cost overruns is that the Company ran into rocks in Boulder while drilling. While the Company thought they had enough experience in Boulder to predict drilling costs, that was clearly not the case. It should not be considered out of the ordinary to run in to rocks in a city named ‘Boulder` at the base of the ‘Rocky Mountains.'” And according to Leslie`s filing, the evidence provides clear indication that the decision to install fiber optics, the most expensive part of SGC and the reason to do all the drilling, was in part because of whom Xcel selected as a partner company. And she notes that the “primary architect” of SGC went to work for that partner company soon after it received over $4 million from Xcel.
So … you be the judge. Shouldn`t Xcel bear the costs of this ill-fated experiment, and not us ratepayers? Hopefully, when this goes in front of the PUC, and then perhaps is appealed, someone in power will come to their senses and demand that this occur.


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