Dear Commissioners,
We have reviewed the rulings on Proceeding 14A-0287E by the administrative law judge (ALJ) and the full Public Utility Commission of Colorado (PUC).
We thank the Commission for correcting the ALJ's original ruling by recognizing that the vast majority of public comment clearly opposes the Pawnee to Daniels Park project proposed by Public Service Company of Colorado (Xcel). We also reiterate based on our review of public comments supporting the project our strong belief that the vast majority if not virtually all parties which sent supporting comments to the PUC have political, business or “social” relationships with Xcel or its employees and representatives. Thank you for correcting the wording of that portion of the judge's ruling.
That said, in the end, we were disappointed in the decision to sustain the remainder of the ALJ's Recommended Decision.
The costly, speculative proposal (building transmission lines before energy generation projects are planned and in place) continues to be of considerable concern to us for several reasons, including:
1) Lack of Project Necessity and of Alternatives Considered
2) Unanticipated Accelerating Pace of Technological Change, Especially Distributed Energy Generation
3) Freedom of Jurisdictions to Reject Routing Not Consistent with the Welfare of Their Communities
4) Grid Stability and Safety
1) Lack of Project Necessity and of Alternatives Considered
The Commission's final ruling states, “The ALJ also determined that Public Service’s application met the transmission CPCN requirements of Rule 3102 of the Rules Regulating Electric Utilities, 4 CCR 723-3, specifically the requirement that the applicant evaluate alternatives to the proposed project.”
In reviewing the citations the Commission used to come to this conclusion, we cannot find in the cited paragraphs (Recommended Decision, ¶¶ 143-159) which the Commission let stand any indication Xcel evaluated appropriate alternatives. In fact, while the ALJ granted the Certificate of Public Convenience and Necessity (CPCN), he raised the fact several times that Xcel did not consider appropriate alternatives.
The judge's main criteria for granting the CPCN seems to be based on the Office of Consumer Counsel (OCC) not challenging the project earlier in the process. The preponderance of the judge's analysis indicates Xcel did not serve the interests of its rate payers by seeking alternative, more-efficient, less-costly alternatives. For examples of the ALJ's concerns, consider these paragraphs from his ruling that were included in the justifying citation of the Commission's final ruling:
144. Despite a lengthy planning process, the evidence of record fails to fully answer some of the very reasonable questions raised by Mr. Neil [of the OCC] about how the Company came to propose this project. This leads one to question the least cost solution to serve projected need through 2024.
146. Notably, the Project is not defined in terms of the most cost-efficient manner to serve identified customer loads. Rather, the Company defined the scope of the Project so that the only solution is the one offered by the Company. No feasible alternative was developed through the planning process.
147. Mr. Neil points to several alternatives to provide transmission to defined energy zones and serve a substantial portion of the projected demand. However, because Public Service’s project not only does the same but also promotes reliability with the 345 kV backbone, those alternatives were apparently not considered.
151. One way the Company defined the Project was as an extension of a prior project. This provides the basis for the Company’s position that there is no alternative to expanding the Project except not to expand the Project. In electric transmission, it is highly improbable that there is only one way to serve load. As a purpose, the position does little to advance any required element of proof to obtain a CPCN.
152. There is no indication whatsoever that the Company considered alternative projects to alleviate the constraint. To the contrary the only alternative considered was to not alleviate the constraint. The cost of an alternative means to alleviate constraint, even if part of a different project scope, would help quantify the benefit of constructing the Project to achieve that benefit.
153. Public Service demonstrated a future need, yet chose to define the project differently than how to plan transmission to most efficiently serve that need. Thus, many questions raised by Mr. Neill might never have been considered.
154. The planning process should not permit a utility to define a project such that customer interests are harmed. For example, it is concerning that the stated objective of the transmission study performed was to determine the amount of additional generation that can be accommodated by the Project. While such a study shows that future generation can be supported by the Project, it does little to support that the Project is the chosen alternative that best serves the public interest.The ALJ notes “the Commission’s process is to engage interested stakeholders early and to streamline the CPCN process as much as feasible.”
He concludes that “while questions remain unanswered, [Xcel] still slightly tipped the scale in its favor based upon the body of evidence presented and reliance upon the transmission planning process.”
This is faint praise and weak justification for Xcel's speculative, “$178 million ±30% (i.e., between 124.6 and 231.4 million)” proposal. The Commission let this stand, concluding that the company has proved public necessity and convenience. It suggests to our minds that the Commission is locked more into administrative processes than in seeking the welfare of Colorado citizens and ratepayers.
Timing of input seems the crucial deciding point in the ALJ's thinking, however a significant stakeholder—the most impacted citizens and ratepayers—are noticeably left out of the early process; left out until, under this logic, it is virtually too late to question the project.
Only in late 2013 did Xcel meet with local jurisdictions along its planned routing to share with them their project plans. The company met with local HOAs and other impacted local citizen groups only a few months before filing a request for the CPCN. It is unreasonable to assume that citizens and such community groups continually monitor possible electricity generation and transmission projects. Therefore, if the PUC believes early input from impacted stakeholders is needed in such projects, it and the legislature should alter its energy and transmission planning and approval process to ensure inclusion of potentially the most personally impacted stakeholders earlier in the process. One could argue the OCC carries part of this burden, but it's mandate is relatively narrow and may not consider all citizen concerns.
We believe the OCC, in fact, has done a stellar job in pointing out weaknesses of Xcel's proposal and are again deeply disappointed its work is discounted because it raised important concerns in what we assumed was a forum timed to provide substantial input to the planning process and the ALJ's decision.
While the PUC has chosen to grant a CPCN for the project, couching it in legally established process and terms, the reality is Xcel, based on the judge's own words, developed “no feasible alternative...through the planning process.”
To conclude this point, we are disappointed the Commission chose to let stand a significant, rate-raising project when less costly, more effective alternatives were raised, especially when the project cannot begin before 2020 and there was adequate time to consider the OCC's reasonable concerns.
2) Unanticipated Accelerating Pace of Technological Change, Especially Distributed Energy Generation
Xcel bases its public relations campaign for this project on SB 07-100
(http://sb100transmission.com/projects/pawnee-daniels-park), a law meant to promote and incorporate new, cleaner sources of energy and ensure adequate transmission. However, the industry, as the PUC and Xcel are well aware, is in rapid upheaval and experiencing dramatic market changes, specifically related most recently to solar. As the legislature considered and passed SB 07-100, we suspect no one anticipated the dramatic drop in cost of roof-top and solar gardens (http://www.denverpost.com/business/ci27985150/9-metro-denver-solar-gardens-rooted-another-10-start-to-sprout) over the last two or three years. They were perhaps imagining only government-subsidized wind turbines and solar at the utility level.
As the Washington Post recently reported, “'Grid-connected self-consuming solar will become economic for nearly all customers imminently, with grid-connected solar plus-battery systems following soon after,' notes [a] study” by “the Rocky Mountain Institute, an influential energy policy think tank.” (http://www.washingtonpost.com/news/energy-environment/wp/2015/04/07/study-the-way-we-get-electricity-may-be-on-the-verge-of-a-major-change/)
While watching solar cost decline precipitously, one is left wondering if large wind turbines will be the best long-term energy solution for Colorado consumers and the environment. Yet, Xcel presents gas-fired generation and as-yet-unbuilt turbines as the only basis for this proposal; even as it wrestles before the PUC to decrease payments to roof-top solar customers. (http://www.sierraclub.org/sierra/2014-3-may-june/feature/throwing-shade-how-nations-investor-owned-utilities-are-moving-blot)
Additionally, as battery technology improves (http://www.washingtonpost.com/business/economy/if-the-industry-makes-its-connections-your-next-home-may-run-off-a-battery/2015/04/25/c4a68482-de00-11e4-a500-1c5bb1d8ff6a_story.html) and energy is increasingly generated at the point of use, the need for costly and inefficient transmission lines will, we anticipate, decrease. Promoting this development would be much more in line with the environmental undergirding of SB07-100 and consistent with Xcel's mandate to ensure appropriate transmission capabilities.
Thus we ask the Commission to closely monitor and continuously review in the coming months and years the need for Xcel's project in view of these powerful trends. As rate payers and citizens, we worry that increased locked-in costs associated with these lines will come at the same time that even the claimed need for these lines decreases or evaporates completely.
“Electricity use is barely growing” (Smith, Rebecca. “U.S. Electricity Use on Wane.” The Wall Street Journal. 2 January 2013.) and distributed energy generation is at a crucial threshold. Thus Xcel's proposal will not only negatively impact communities and property owners, it will impact ratepayers who will be left paying for them long after their speculative usefulness (if it ever comes to fruition) ends. But Xcel will be protected, because as the Wall Street Journal reported last week: “Utilities have another incentive for heavy spending: It actually boosts their bottom lines -- the result of a regulatory system that turns corporate accounting on its head.” (Smith, Rebecca, “Utilities' Strategy: Just Spend More.” The Wall Street Journal. 21 April 2015). In Colorado, we can look at SB07-100 for an example of this in its wording, “authorizing expedited cost recovery [for energy companies] for the construction of transmission facilities.”
3) Freedom of Jurisdictions to Reject Routing Not Consistent with the Welfare of Their Communities
We highlight the Commission's noting in the hearing and ruling that it is was neither considering nor ruling on routing in granting this CPCN. We encourage the Commission to let local jurisdictions decide for themselves whether Xcel's transmission lines are consistent with the character of the communities they will impact, especially as it is clear that these communities were not included early in the project development and review process. We encourage the Commission to ensure the proposed project, if it ever is built, be routed in such a way as to impact the smallest possible number of citizens and residences.
4) Grid Stability and Safety
Finally, we recall that in paragraph 86 of the ALJ's Recommended Decision it was noted the OCC raised the “lack of geographic diversity if the Project is approved because approximately half of Public Service’s 2014 [2024?] peak demand will depend upon three transmission lines running in one transmission corridor. [The OCC] contends this risk was not given proper consideration in Public Service’s analysis because of the absence of less risky alternatives considered.”
The current path of Xcel's proposed routing takes the lines through a suburban corridor, especially in Parker, that already includes ultra-high voltage transmission lines, a substation and a gas main. We do not believe such needless corridor-packing in heavily populated areas is in anyone's best interest.
If these costly, speculative lines are eventually constructed—in an age of increasing physical
(http://legalinsurrection.com/2014/02/california-electric-grid-attack-was-terrorism/) and cyber
(http://www.washingtonexaminer.com/energy-secretary-electric-grid-under-attack-major-target-of-cyber-hits/article/2563646) terrorism against the Electric Grid and major weather events—diversification of routing would better promote Grid stability and decrease the likelihood such lines and facilities and the communities where they are sited become targets of devastating attacks or unfortunate mishaps.
While the ALJ and the Commission have focused on sound impact and EFM safety, we note there are neither legally established safe limits for EFM nor full understanding of the association between EFM from ultra-high voltage transmission lines and childhood leukemia. Thus, in the current ignorance of that relationship, we emphasize the need to, if the lines are built, to site them where they will have minimal impact on children. We note the current intended path is adjacent to at least two Parker schools and through many family residential neighborhoods.
We close hoping the Commission will find justification to recall the CPCN it has extended (if that's possible), continually reassess the need for this proposed project, and if the project is ever built, support local communities in having a fair say in siting issues. We ask that it be sited to impact the fewest possible citizens, especially children, those most vulnerable in our communities.
