Transmission Lines for Energy Demand or Just Corporate Profits? You Decide!

Xcel has been pitching the need for the new, disruptive Pawnee to Daniels Park extra high voltage

Is Xcel hoping they can blow some old-fashioned, out-of-date
data our way to "prove" the need for their proposal?

transmission line because of past and future economic and population growth.

Sounds good, doesn't it. After all, the Front Range is expected to grow dramatically in coming years.

But . . .

Trends in energy use are changing: Energy may no longer be tied to economic and population growth. In fact the EPA's goal, according to a recent article in the Wall Street Journal, "is to offset any increases in energy use because of population growth by promoting energy-efficiency measures."

So, why is Xcel really pushing this project?

​The Wall Street Journal article mentioned above and one from January 2013 may offer insight.

From the article noted above:

Even though Americans are plugging in more gadgets than ever and the unemployment rate had dropped at one point to a level last reported in 2008, electricity sales are looking anemic for the seventh year in a row.

Sluggish electricity demand reflects broad changes in the overall economy, the effects of government regulation and technological changes that have made it easier for Americans to trim their power consumption. But the confluence of these trends presents utilities with an almost unprecedented challenge: how to cope with rising costs when sales of their main product have stopped growing.

...​The U.S. Energy Information Administration said recently that it no longer foresees any sustained period in which electricity sales will keep pace with GDP growth. ...​Energy efficiency blunts the impact of population and economic growth, because upgrades in lighting, appliances and heavy equipment reduce energy needs.

...Electricity demand is likely to be even more subdued in coming years. The U.S. Environmental Protection Agency wants to slash greenhouse-gas emissions from power plants, in part by trimming electricity use. Its goal is to offset any increases in energy use because of population growth by promoting energy-efficiency measures.

January 2013 article excerpts:

...Many utilities with regulated and unregulated operations are redirecting spending to their regulated side, where regulators practically guarantee them a profit. PSEG plans to triple its investment in its fully regulated electricity-transmission business to $2.4 billion in 2014 from less than $866 million in 2008.

Ralph Izzo, the company's CEO, recently told investors that he likes spending on power transmission, because "it's not dependent on [electricity] load growth." Part of his motivation is the return on equity of 11.7% to 12.9% set by the Federal Energy Regulatory Commission.

Wow! It's not what we expected when we first started questioning this proposal. Energy demand will not naturally increase as Xcel has been claiming or implying. And how might the company deal with less than robust energy growth: Based on the 2013 Wall Street Journal article, it just might want to invest more in transmission lines where it would be guaranteed a good return.

Is that, then, Xcel's real bottom line? Higher corporate financial returns from an unneeded project? An unneeded project that harms neighborhoods in Aurora and across Parker?

We again challenge the need for (and question the motivation behind) the Pawnee-Daniels Park Transmission proposal.

Is Xcel Just Speculating on the Backs of Rate Payers?

Is Xcel Just Speculating on Our Backs?

Is Xcel's current proposal just “deja vu all over again”? Is the company just speculating on the backs of rate payers--as it appears it tried to do in Southern Colorado just a few years ago?

It's current proposal to build long-distance, extra-high voltage lines from Brush, Colorado to Daniels Park, according to Xcel's project website, is:

“part of the company’s Senate Bill 07-100 portfolio of transmission plans and is a critical component of the Colorado long-range transmission plan. The project will allow for the interconnection and delivery of new generation resources, including renewable energy to Front Range customers to meet new load growth and improve system reliability.”

Sounds convincing, doesn't it? Until you look at what Xcel tried to do in Southern Colorado. Here's what that project website claimed:

It was “needed to meet the challenges identified by the Colorado General Assembly, the Governor's Energy Office, the Colorado Public Utilities Commission, and numerous stakeholders. The project is essential to meeting Colorado's goals of clean, reliable, affordable, and secure electrical power now and in the future.

It sounds the same: Government demands! Essential/Critical! Clean/Renewable Energy! Reliability! New Load Growth/The Future!

It's the same excuses. Why do we say “excuses”? Read on to see what happened when the PUC suggested that Xcel should bear some of the risk if the project didn't live up to Xcel predictions:

We quote from website smartvalleyenergy.com:

Xcel Threatens to Walk Away from Transmission Line
Wednesday, December 22nd, 2010

Xcel has recently threatened to walk away from the Southern Colorado Transmission Line Project if the Public Utilities Commission (PUC) doesn’t give-in to their demands to put public money – and only public money – at risk in the project.

Who is regulating whom?

The PUC will soon decide whether to approve a Certificate of Public Convenience and Necessity (CPCN) application for the transmission line project. In her recommended decision to the PUC, the Administrative Law Judge placed a condition for the CPCN that . . . puts some investment risk on the utility, rather than on ratepayers who have no say in whether or not the line is built. In fact, this condition should be even stronger and provide more protection to ratepayers from abuse by Xcel.

Parties in the case filed responses late last week.

Xcel’s response? “If the Commission does not remove this condition, Public Service will be forced to withdraw from this Project.” That is quite a threat.

Xcel had the audacity to go on in their response and state that,“it would be irresponsible for an investor-owned utility to put shareholder funds at risk…” Xcel is happy to rake-in hundreds of millions of dollars from ratepayers as long as its shareholders’ money is not at risk.

In another recent PUC filing, the PUC’s own staff complained about Xcel’s many attempts to improperly control the Commissioners: “Staff is troubled by what has become an all too familiar theme of [Xcel] that the sky is falling and urgency prevents [Xcel's] proposed actions from being properly vetted and approved” by the Commissioners. Staff asked, “…who is in charge in Colorado, the utility or the Commission.”

The Denver Post reported,

Xcel Energy has threatened to drop plans for a controversial transmission line that it seeks to build in southern Colorado because of regulatory conditions that might be imposed on the project.

In a filing this week with the Colorado Public Utilities Commission, Xcel took issue with an administrative law judge's recommendation that Xcel face financial sanctions unless it keeps the $180 million line supplied with large amounts of power.

...The line is intended to help carry power from solar-energy generating stations in the San Luis Valley to Colorado's Front Range and other population centers.

Xcel said its main concern is a provision that would require it to refund 50 percent of the development costs it collects from ratepayers if the transmission line fails to carry at least 700 megawatts of power within 10 years of completion.

In its filing, Xcel said the power requirement "is clearly not in the public interest" and is "arbitrary and unreasonable."

Xcel eventually pulled out of the project.

Is the Pawnee-Daniels Park project just the same—a speculative effort to keep control of energy along the front range, at a time when market forces and technology are moving in other directions? Is this just speculation on the backs of rate payers (raise their rates) for the benefit of Xcel shareholders? As they say, "Follow the money."

We make the same point folks in Southern Colorado made: “We shouldn’t have to foot the bill for an overbuilt, overpriced, unnecessary project.”

Will Xcel's Pawnee to Daniels Park Proposal be Quickly Obsolete?

Hundreds came out in Denver to protest Xcel's plan
to decrease payments to rooftop solar customers.

The energy business is changing—dramatically and rapidly--and changes are already impacting Xcel. For proof, just look at Mark Jaffe's recent Denver Post article on the conflict solar panel customers and installers are having with the Minnesota-based Utility company in Colorado because Xcel wants to lower its payments to solar customers for energy they contribute to the grid.

Current and coming changes raise a core question: Is the Pawnee to Daniels Park extra high voltage long-distance transmission line necessary, or is Xcel's proposal just a head-in-the-sand, monopole-in-the-air wish to keep us in the 1890's?

If the PUC approves the transmission line as currently proposed and it's not needed, Coloradoans will be stuck with unnecessary power transmission? If so, the poles and wires will stay uselessly in place and rate payers will be paying for them for decades. (Even under the best circumstances, this proposal raises Xcel customer rates.) Are Xcel managers and investors the real beneficiaries here?

In a blog on the website www.yourenergyblog.com, Jessica Kennedy writes:

Developed nations all over the world take pride in the technological advancements of the twentieth and twenty-first centuries, as they should, but, the United States is functioning in 2014 with essentially the same power delivery system developed in the 1890’s. The electricity we depend on every day travels along a transmission system based on nineteenth century technology. ...Historically, energy infrastructure has been maintained to preserve the status quo instead of improved to keep pace with technology. ...there is no excuse for the system to have stagnated and decayed for over a century.

...We can’t expect electric utilities in 2050 to operate in the same fashion they do today. Energy industry practices are already outdated, and there is a big shift in energy distribution and generation on the way.

In order for utilities to remain profitable as our grid transforms they need to adapt, and fast. ...The biggest change for utilities by 2050 will be the emergence of distributed energy resources (DERs)...[,] a competitive threat to the traditional utility model because consumers will soon have a choice between buying power through the grid, or investing in onsite generation and producing their own power. ...As consumers gain diverse and low cost choices in renewable and distributed generation resources, utilities will need to integrate DERs, and carefully blend the needs of customers with their own, in order to stay relevant.

...David Crane, CEO of NRG Energy . . . said, “[i]n the future I see an at-home, disaggregated system, with the home like a brain, with supply and demand of electricity being generated in that home.”

Morgan Stanley published a report in early March 2014 that predicts a realization of Crane’s vision of homes powering themselves with solar panels and batteries. The financial firm points to the already enormous distributed solar market, and electric car company Tesla’s innovative battery production concept as indicators that consumers may soon choose to abandon the electric grid altogether. Tesla’s “gigafactory” will drive down costs of energy storage exponentially once it is built and in operation. Morgan Stanley states in the report that Tesla’s proposed battery production can not only make off-grid energy cost-competitive with utilities, but it will likely evolve to be more inexpensive over time. ...It seems to be a matter of when, not if, renewable and battery configurations are the power systems of choice for homes and businesses across the country.

Energy development, production and transmission are entering a new era. Is Xcel's Pawnee to Daniels Park project, even if it were solely based on leveraging wind power, just a way to hold on to Xcel's monopoly in many parts of Colorado, even as energy production shifts closer to your home? If so, who will be the losers? Rate payers, who will see their bills increase if this proposal goes through--even if the line never performs as promised--and residents of Parker and Aurora who will see additional power lines and poles installed even if they are quickly obsolete.

Xcel needs to look to the future, innovate and develop projects that integrate with the independence we will increasingly have in our energy production. Nineteenth Century transmission technology has no place in our 21st Century neighborhoods.