Columnists, Energy, Jon Caldara, Uncategorized

Caldara: Xcel’s legalized theft

Xcel Energy is the goliath power monopoly “serving” a vast number of Coloradans. And their mission is to put the interest of their ratepayers, euphemistically called “customers,” well behind that of their shareholders.

I’ve mentioned this before, but it deserves repeating: Your electric rates should be the lowest in 20 years. Demand for electricity is at its lowest thanks to conservation and technological, power-saving advancements. You are using less power than you ever have.

At the same time the cost of the fuel that creates electricity is at an all-time low. The floor has fallen out of the coal market, just ask the unemployed folks in coal towns like Craig. And technology, namely hydraulic fracturing, has unlocked massive and inexpensive reserves of oil and gas.

Riddle me this then. Demand for electricity is at a mind-boggling low and supply is at a mind-boggling high. By every law of economics your utility bill should be the lowest it has ever been. But it is the highest and growing higher.

Why? Because Xcel’s business model isn’t to just sell you power after adding their legally guaranteed profit margin to it. That would just keep them rich and give you affordable power.

They figured if they could get into the “building stuff” game they could charge you for that too, with of course their legally guaranteed monopoly profit. And Xcel’s lock hold over state government did the job.

With some crony Republicans in their pocket, they passed a “fuel switching” bill a few years back mandating that they rebuild their coal-fired power plants near Pueblo — which they had just rebuilt to make the LEAST polluting coal plants in the nation — into natural gas power plants.

So, you get to pay three times over in your electric bill: You’re still paying the mortgage on the original plants, then you’re still paying the mortgage on the rebuild to make them super-non-polluting, and now the mortgage to switch them from coal to gas.

As one Xcel insider told me, if the plants were already powered by natural gas Xcel would have passed a law to switch them to coal.

Xcel isn’t in the energy business. It’s in the capital expansion business. That’s why they are so happy to help pass every goofy mandate for feel-good renewable energy. They get to build the stuff and charge you for it — and their legally guaranteed profit on it — while they’re still charging you to pay off the old stuff.

When they build wind power, they depreciate it and add to your bill, plus their mark-up. Then since the wind doesn’t blow all the time, they need to build back-up natural gas generators and new power lines, which they depreciate, add their profit to, and pass along to you.

And what the hell are you going to do about it? Take your business to the other competing utility? There is none.

Now, if you lived in Texas, you could shop around among a slew of competing power companies easily through a website. Want to pay more for feel-good green energy? Do it. Want to shop purely on price? Do that, instead. The ratepayer is in charge.

Well, this ain’t Texas.

Our Public Utilities Commission is supposed to protect us from this monopoly manipulation of political power. Sadly, appointed by the governor, they are just part of it.

The first written principle of the PUC was to guarantee least cost power to ratepayers. They recently voted to remove that first principle.

So, it is no surprise that Xcel worked with the governor and PUC to approve a $100 million scheme to build electric vehicle charging stations all over the place, and pass the cost to you ratepayers, not its shareholders.

Remember, these are fueling stations for cars. I don’t remember having to pay more in my utility bill for someone to build a gas station.

And now Xcel wants you to pay (through your electric bill) another $30 million so they can redistribute it to rich guys who want to buy Teslas. And with the PUC in their pocket, they might pull it off.

The solution to this legalized criminal activity is simple. Either open Colorado up to true competition, like Texas, or mandate that Xcel pay for their own capital expansions.

Until then, the electricity mob has all the power over government and you.

Jon Caldara is president of the Independence Institute, a free market think tank in Denver.

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