DENVER — The Colorado Supreme Court has cleared the way for a for a citizen’s initiative that would require monopoly energy providers to set aside a percentage of their profits for new expenses.
Under Initiative 93, investor-owned utilities, such as Xcel Energy and Atmos Energy would be required to pay a minimum of 5 percent of their annual profits toward utility rate hikes, to help offset the rising cost of energy to captive customers.
The official language of the initiative, which was brought by Independence Institute* President Jon Caldara along with Jake Fogleman, an energy policy analyst at the Institute, says:
“It shall be the public policy of the State of Colorado that investor-owned utilities providing electric or gas service or both to residential, commercial or industrial users in Colorado shall bear their fair share of all utility rates set by the public utilities commission.”
The new statute would not apply to cooperative energy providers.
However, Xcel Energy challenged the ruling to the Colorado Supreme Court, saying there were multiple issues with the initiative.
First, they argued the measure contained more than one subject in violation of Colorado’s single subject law. They also argued that the measure was confusing to the public, saying the only reasonable conclusion was that the measure would result in the 5 percent being paid back to themselves.
However, they would not be paying themselves back. Here’s an example of how it would likely work.
Currently, if Xcel made $100 million in profits last year, all $100 million goes to shareholders. If Xcel needed $20 million for increased expenses, the company goes to the PUC and asks for a rate increase to have customers cover the new expenses.
Under the new initiative at the 5 percent minimum, Xcel would have to take 5 percent (or whatever the PUC sets as the amount, but no less than 5 percent) out of its profits to help defray the cost to rate payers.
The PUC will decide after passage how much, in what manner and to whom the money would be paid.
The measure makes Xcel shareholders have a stake in the game, sponsors say.
“It used to be that Xcel Energy made money by selling power,” wrote Caldara in a recent Complete Colorado opinion piece. “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.”
In its filing with the state’s high court, Xcel’s attorney Raymond Gifford called it “Incomprehensible.”
“The title board set a title which is misleading and incomplete as it does not fairly communicate the true intent and meaning of the measure and will mislead voters,” Gifford said in his filing, also claiming, “the title set by the board violates the ‘clear ballot title’ requirement by misstating or omitting critical elements of the measure and will mislead voters.”
Gifford argued voters will not be given clear direction as to timing of implementation or process of implementation.
Attorneys for the sponsors said in their response that future interpretation or implementation of the of the measure “are beyond the functions assigned to the title board.”
“The intentional omission of certain implementing details and delegation of authority to the Colorado Public Utilities Commission (“PUC”) to establish the fair share standard do not make #93 incomprehensible or misleading,” the attorneys wrote. “This simply reflects the Proponents’ intent and tracks similar initiatives that passed muster and went to the voters.”
The court issued its ruling in one sentence on May 26.
“It is ordered that the actions of the title board are affirmed.”
The initiative is now headed to Secretary of State Jena Griswold to approve the petition language so supporters can begin to collect signatures. It is planned for the November 2022 election.
* Independence Institute is the publisher of Complete Colorado.
