Colorado Wind Power and Regulatory Logic

Michael Giberson

I’m having trouble following the logic of the utility regulatory staff in Colorado on the issue of wind power, at least as described in the Denver Post article. Xcel Energy has a popular program through which they sell windpower at a premium to some of their customers — “more than 34,000 Colorado participants and a waiting list of about 1,000” paying a premium that averages about $6/month. Over the next year, Xcel will open several new wind farms and expanding its total wind power capability from 60 MW to 1000 MW.

So what does the staff at the Colorado Public Utilities Commission want to do? Abolish the wind power program and roll the costs of wind power into everyone’s bill.

Let’s see: a popular wind power program leads to company expanding supply … therefore regulators want to abolish the program and mandate purchase of wind power. What logic connects the dots here?


3 thoughts on “Colorado Wind Power and Regulatory Logic

  1. Easy, the PUC can’t stand to have anything succeed outside of the PUC.

    Or, more charitably, they’re just completely clueless about economics and incentives, and want to “help” with a “good thing”, with the inevitable effect of destroying it.

  2. The existing 60 mW is dedicated to specific customers. According to the DP article, the additional ~1000 mW will be ratebased and the incremental kWh cost rolled-in. The article does not explain the reason for the different treatment. My guess, the PUC does not believe the demand exists for the new capacity at an incremental cost. They are probably also concerned that only certain customers would be protected if natural gas prices rise again, especially since the customers protected would also be those who are willing/able to pay for green power, access to “Lexus lanes”, etc.; ie, the “hated” “rich”.

    Interestingly, I read here recently that wind power was competitive with conventional utility power. Apparently that is not the case in CO.

  3. The existing 60 mW is dedicated to specific customers. According to the DP article, the additional ~1000 mW will be ratebased and the incremental kWh cost rolled-in. The article does not explain the reason for the different treatment. My guess, the PUC does not believe the demand exists for the new capacity at an incremental cost. They are probably also concerned that only certain customers would be protected if natural gas prices rise again, especially since the customers protected would also be those who are willing/able to pay for green power, access to “Lexus lanes”, etc.; ie, the “hated” “rich”.

    Interestingly, I read here recently that wind power was competitive with conventional utility power. Apparently that is not the case in CO.

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