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O_JSCRUR_2023A 03/20/2023 02:04:11 PM Committee Summary

PUBLIC
STAFF SUMMARY OF MEETING
OTHER COMMITTEE COMMITTEE ON JOINT SELECT COMMITTEE ON RISING UTILITY RATES
Date 03/20/2023
Attendance
Cutter X
Lynch X
Martinez *
Simpson X
deGruy Kennedy X
Fenberg X
Time 02:04:11 PM to 05:27:01 PM
Place LSB A
This Meeting was called to order by Fenberg
This Report was prepared by Nina Forbes
Hearing Items Action Taken
Presentation from Western Resource Advocates Committee Discussion Only
Presentation from Energy & Policy Institute Committee Discussion Only
Presentation from Pearl Street Station Finance Lab Committee Discussion Only
Presentation from Colorado Energy Consumers Committee Discussion Only

02:04:13 PM
Chair Fenberg gave opening remarks.



Presentation from Western Resource Advocates - Committee Discussion Only
02:04:37 PM  
Meera Fickling, Senior
Climate Policy Analyst, Western Resource Advocates (WRA), introduced herself
and explained the mission of WRA.  Ms. Fickling's presentation is
included as Attachment A.  Ms. Fickling gave an overview of Xcel's
base rate increase history, capital investments in gas pipeline infrastructure,
and the amount needed to collect from ratepayers to break even.
02:05:37 PM  
Ms. Fickling went
over what decarbonizing buildings looks like for reducing gas usage by
2050.  Ms. Fickling explained how the potential of using renewable
natural gas (RNG) and hydrogen in buildings is limited by hard physical
and safety constraints.  She continued by explaining how RNG and hydrogen
are expected to cost several times the wholesale price of natural gas now
and in the future.  Ms. Fickling explained that the gas utilities
investment model relies on continued growth of customers into the future.
Ms. Fickling posited that this represents a risk if the customer base does
not grow or does not grow at the rate expected, which could happen with
the movement away from using natural gas. Ms. Fickling discussed the issue
of gas lines being built at the same pace without the customer base growing
in tandem.    
02:23:14 PM  
Ms. Fickling went
over line extension allowances (LEAs). Ms. Fickling gave an overview of
who pays for utility infrastructure and who benefits. Ms. Fickling went
over how the PUC treats gas LEAs.  She then went over steps the General
Assembly could take to eliminate gas LEAs and minimize stranded asset risk.
 Ms. Fickling went over other complimentary policy suggestions.
02:32:57 PM  
Ms. Fickling responded
to questions from the committee about subsidies from utilities for customers
to connect to the gas system.  She also responded to questions about
the costs of decommissioning gas pipeline infrastructure. Ms. Fickling
answered questions about whether the average home can handle installation
of heat pumps or transition away from gas without significant upgrades.
 Ms. Fickling answered additional questions about the modeling of
reduction of use of gas infrastructure.  Ms. Fickling answered questions
about the electric grid load impact from transitioning from gas to electric.
 Ms. Fickling responded to questions about back up power if the electricity
goes out.  Ms. Fickling answered questions about start-up costs for
electric hook-ups similar to gas hook-ups and how she views those differently
in terms of stranded assets.



Presentation from Energy & Policy Institute - Committee Discussion Only
03:06:00 PM  
David Pomerantz,
Executive Director, Energy & Policy Institute (EPI), introduced himself
and explained the mission of EPI.  Mr. Pomerantz's presentation is
included as Attachment B.  Mr. Pomerantz gave an overview of his presentation
on utility use of ratepayer money for inappropriate causes.  Mr. Pomerantz
gave examples from across the United States of illegal bribery and dark
money practices by utilities.  Mr. Pomerantz then went over cases
that were not necessarily illegal, but were unfair or deceptive acts by
the utilities.  Mr. Pomerantz clarified that Colorado has not experienced
any scandals of that level.  Mr. Pomerantz went over utilities' customer-funded
political machines as well as those paid out of utilities's profits in
Colorado.  Mr. Pomerantz explained how political influence costs drive
up rates.
03:17:06 PM  
Mr. Pomerantz then
went over recent Colorado rate case expenses.  He discussed Colorado
utility donations and trade association dues.  Mr. Pomerantz went
over what the American Gas Association (AGA) spends on advertising, public
relations, and social media influencers with Coloradan's money, noting
that none of these activities meet the AGA's definition of lobbying.  He
also went over what Edison Electric Institute (EEI) does with Coloradan's
money.
03:24:11 PM  
Mr. Pomerantz discussed
trade associations lobbying against transparency. Mr. Pomerantz pointed
out that the Colorado PUC has a policy that advertising expenses be taken
out of rates, unlike many other states.  Finally, Mr. Pomerantz explained
that utilities claim they do not charge customers for lobbying, but that
what utilities actually consider to be lobbying is limited.  Mr. Pomerantz
went over utilities's definitions of lobbying and possible gaps in Colorado's
current reporting.  Mr. Pomerantz went over a report EPI put out earlier
this year that may contain some policy actions the General Assembly could
take.  Mr. Pomerantz closed withexamples of actions taken by other
states to hold utilities more accountable.
03:35:39 PM  
Mr. Pomerantz answered
questions from the committee on best practices in other states.  Mr.
Pomerantz answered questions about how to classify misinformation versus
opinions on policy.  Mr. Pomerantz answered questions on whether EPI
has a preferred model.  Mr. Pomerantz answered a question about who
funds the EPI.  Mr. Pomerantz answered a question about whether there
have been studies done on the exact impact on rates of some of these policy
suggestions.



Presentation from Pearl Street Station Finance Lab - Committee Discussion Only
03:45:37 PM  
Albert Lin, Executive
Director of the Pearl Street Station Finance Lab, and Ron Lehr, Former
Chairman of the Public Utilities Commission (PUC), introduced themselves
and began their presentation.  Mr. Lin and Mr. Lehr's presentation
is included as Attachment C.  Mr. Lin went over how the United States
and Colorado got to the current state of utility provision, including the
1973 Oil Embargo and advancements to the ways we generate and manage electricity.
 Mr. Lin went over how the motivation to harm consumers is high under
the current system.  Mr. Lin went over how electricity is the number
one customer to natural gas.  Mr. Lin discussed what the General Assembly
could do to to align policy and the real world.  Mr. Lehr went over
additional strategies to improve planning into the future.
04:04:20 PM  
Mr. Lehr continued to explain how to optimize planning for a better future.
04:09:44 PM  
Mr. Lin went over
some examples of other states who are trying to get off the "zero
bound" 0 percent exposure utilities have to these costs and share
the risks between utilities and the consumers.  Mr. Lin stated that
the fuel cost adjustment has lost its applicability in the current world.
04:14:33 PM  
Mr. Lin answered
questions from the committee about coal and natural gas.  Mr. Lehr
 answered a question about the PUC's planning model. Mr. Lehr answered
a question about multi-year rate plans.  Mr. Lehr and Mr. Lin answered
questions about sharing risk and how to apportion exposure.  Mr. Lehr
 and Mr. Lin answered questions about managing the transition away
from natural gas. Mr. Lin answered a question about the ability of utilities
to attract capital and capital at favorable rates.



Presentation from Colorado Energy Consumers - Committee Discussion Only
04:38:56 PM  
Michelle King, Partner
at Holland & Hart LLP and Counsel for Colorado Energy Consumers (CEC),
introduced herself and began her presentation.   Ms. King's presentation
is included as Attachment D.  Ms. King explained what the CEC is and
who it serves.  The CEC serves larger entities not represented by
the Office of the Utility Consumer Advocate.  Ms. King went over the
balancing of interests involved in the regulatory compact.  Ms. King
went over the inherent tensions between the public's interest and the utility's
interest. Ms. King discussed how to re-balance the interests, including
avoiding automatic ownership, promote competitive bidding, sharing risks/
rewards, cost predictability, accountability in forecasts and provided
estimates, and discernment with performance incentive mechanisms (PIMs).
   
05:05:48 PM  
Ms. King answered
a question about demand-side management programs and who should administer
them.  Ms. King answered a question about how to improve information
asymmetry.  Ms. King answered a question about when in the past there
has been re-balancing.  Ms. King answered a question about other states
and their level of stakeholder interest.  Ms. King answered a question
about which recommendation would be the most impactful.  Ms. King
addressed a question about what should be confidential or withheld in rate
cases with public utilities and only available through legal discovery
versus what should be public information.  Ms. King answered questions
about PIMs and how often the PUC actually considers them when they are
included in legislation. Ms. King answered a question about potentially
switching to the retail-choice model.
05:26:49 PM  
Chair Fenberg gave
closing comments.


05:27:01 PM   The committee adjourned.






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