Colorado clings to an old “monopoly” model for power utilities. Texas, for instance, empowers consumers to choose any power company they like. If you want to pay a lot for energy solely generated by bunny flatulence, go for it.
But here we have had a “grand bargain” on power — the state would grant monopolies to investor-owned utilities, like Xcel Energy, in exchange those companies would provide least-cost power to their captive customers.
If you’re the monopoly, this is spectacular. You get a guaranteed, risk-less profit. And your captive clients can’t escape.
If a recent Denver Business Journal article is right, it seems Xcel’s guaranteed profit is nearly 14%. Your savings account is riskier than investing in Xcel. Is your bank paying you 14%?
The protector of this grand bargain is our Public Utilities Commission, three governor’s appointees. A few years back they changed their stated mission from making sure we captive customers got the least expensive power to something fluffy and impossible to measure — environmentalism and “social values of our state.”
Massive corruption followed.
It used to be that Xcel Energy made money by selling power. Not anymore. Now they make money by building stuff and then double-, triple-, sometimes quadruple-charging us for it.
If you get a guaranteed profit from whatever you make, the way to double your profit is just to make twice as much stuff whether it is needed or not.
Take Xcel’s Comanche power plant near Pueblo. They took out a mortgage to build the plant in the first place and charged us for it in the rates we pay. Fine.
Now, they want to shutter that plant, which they said would be operational for the next several decades, to build a natural gas plant to replace it. Which means while we’re still paying off the last two mortgages, we get to pay off a third. That’s risk-free, three-times profit for the same electricity.
The PUC won’t protect us.
Consider the PUC commissioners preside over a court to ensure fairness for customers who have no choice but to buy from Xcel. In this analogy, you, the captive customer, are the defendant.
Xcel comes in as the prosecutor and tells the judge it’s time to punish these ratepayers with more rate increases as we build yet more stuff.
Under the original rules, the PUC would say, “Sorry, Xcel, but no. We protect customers. Now go enjoy all the risk-free profits on what you already built.”
But now the PUC is merely a working cog in the anti-ratepayer machinery. Polis’s PUC is Xcel’s bitch.
Can’t we defendants defend ourselves in this kangaroo court? Not really.
Years back my organization, Independence Institute, put together a coalition of ratepayers and asked permission of the PUC to represent customers. (Think of that: you must ask permission to speak up for yourself.) Back then, the PUC allowed it.
But last year we asked to do it; Jared Polis’s new PUC said no. They took Xcel’s request to deny us the ability to speak on behalf of ratepayers.
If we’re using a court analogy here, doesn’t the accused at least get a public defender? Absolutely. And in this court, it’s called the Office of Consumer Council (OCC). Their job is to stand up against monopolies trying to pillage us.
They were feckless to begin with, but now thanks to a new bill, signed by our “affordability governor,” the OCC has changed from being independent to being subservient to the governor. The governor’s appointee to the Department of Regulatory Affairs now calls the shots.
So, we are faced with a system where the judges work for the prosecutor. Our court-appointed attorney works for the prosecutor.
And we aren’t even allowed to represent ourselves.
And that’s why we ratepayers are always found guilty and sentenced to higher and higher power bills.
Something needs to change.
I’ve introduced a citizen’s initiative that, should it make the ballot, would give voters the opportunity to require privately-owned utilities to pay a portion of their rate increases back to their captive customers.
Shouldn’t they have at least a little skin in the game?
Jon Caldara is president of the Independence Institute, a free market think tank in Denver.
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