Amy Oliver Cooke, Energy, Environment, Gold Dome

Senate Bill 89 a positive step for residential energy storage

For as much as Colorado might fancy itself the next Silicon Valley, the state is stuck in a time warp when it comes to electricity service providers. Could a modest bill regarding residential battery storage spark change for 1.4 million Xcel Energy and 93,000 Black Hills Energy ratepayers?

Colorado’s investor owned utility (IOU) monopoly model along with a Public Utilities Commission (PUC) to oversee it needs reform. Created nearly 100 years ago when it was believed that a sole provider was the best way to deliver phone and electric service to an area, we’ve since deregulated phone service but not so with electricity.

File photo: Todd Shepherd
File photo: Todd Shepherd

In a December guest column former Denver Post energy reporter Mark Jaffe explained how far behind we are when it comes to electricity, choice, and competition:

“Fast-forward a hundred years, and now with solar panels and large batteries, a home can generate and store its own power. In many states consumers choose among several electricity providers, and people in two-thirds of the country, but not the West, are served by large, regional, wholesale markets that deal in electricity among utilities in many states.”

Take Texas for example. Deregulation of electricity providers gives consumers options based on location, cost, resources, and volume. Visit the Web site PowerToChoose, type in a random zip code, and review the options. I used a random Houston area zip code 77015 and found 352 plans from which to choose.

Jaffe added, “Meanwhile, Colorado, in terms of regulation and market competition, is still in the previous century.”

Fed up with the monopoly model and lack of freedom, an unlikely coalition is coming together to bring the state into the 21st Century. Probably for different reasons, both the environmental left and free marketers want to free Colorado electricity customers and bring more options to ratepayers.

Icon_2016_Op_EdAt the Independence Institute, we still oppose subsidies for solar panels and wind turbines and mandates based on energy source. We do believe ratepayers are smart enough and responsible enough to control their energy destiny. Within the electricity generation industry, that freedom will come from demands for an innovative and free market.

A small step in that direction is SB17-089 sponsored by Senators Steve Fenberg (D-Boulder) and Kevin Lundberg (R-Berthoud). Proving that politics can lead to strange bedfellows, both the Independence Institute and the Sierra Club initially have endorsed it.

We like the intent of bill and its sponsors, which is to affirm the rights of residential ratepayers to install batteries for later use or in case of an outage. It would also prohibit a state regulated monopoly utility like Xcel from throwing up regulatory barriers and charging onerous fees or requiring additional meter installations that it doesn’t currently charge customers without storage.

When peak pricing becomes a reality, ratepayers who invest in storage can charge their batteries during off peak times for use during high peak periods. The ability of an individual ratepayer to store power for later use is an effective way to reduce stress on the grid. Certainly, preferable to excessively high pricing, rolling brown outs, or building wildly expensive additional capacity.

For those with medical conditions, a power outage can be a matter of life or death. A fully charged battery could be the difference.

The bill faces some serious headwinds. The IOUs are opposed. Naturally, Xcel opposes anything that threatens its highly profitable Colorado monopoly.

The company also claims that ratepayers already have the right to install a battery without regulatory interference or excessive fees. If that’s the case, then Xcel shouldn’t be opposed to putting the language in statute. And ratepayers shouldn’t trust that Xcel won’t try in the future. The company has a history of colluding with the PUC, misleading consumers, and questionable influence peddling.

I am sympathetic to the co-ops’ opposition and argument that whatever happens to the monopoly utilities eventually happens to them. Democrat controlled state legislatures have proven that true over the last decade. Still, it’s not enough to persuade me not to advocate for individual ratepayers against Xcel.

Admittedly SB17-089 still needs some work including an amendment to clarify that it applies only to IOUs and tweaking of language so there is no unintended cross subsidization from non-storage to storage ratepayers. The sponsors seem to agree.

Whatever the outcome of SB17-089, Senators Fenberg and Lundberg are on to something. Electricity freedom is bi-partisan, and we’re proud to be part of the conversation.

Amy Oliver Cooke directs the Energy Policy Center at the Independence Institute, a free market think tank in Denver.

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