Statement in Response to Colorado Public Utilities Commission (PUC) Final Order Raising Rates on Colorado Consumers

DENVER, Dec. 16, 2010 /PRNewswire/ -- The Colorado Public Utilities Commission's (PUC) final order creates the worst possible set of circumstances for Colorado consumers, costing ratepayers approximately $1 billion more than other, more cost-effective alternatives. The PUC order ignored input from many parties in the case and finalizes the commission's preordained outcome, mandating implementation of a piecemeal energy plan that will be more expensive, less efficient and less reliable than installing proven emissions control technology on existing coal-fueled plants. In addition to significantly raising electric rates on consumers, this plan will introduce substantial reliability and efficiency risks to our electric system. Because of the cost and reliability concerns, even Xcel Energy recommended against the PUC's mandated fuel-switching plan.

Let's examine the facts:

• In ordering the fuel-switching plan, the PUC dismissed concerns expressed by its own staff and Xcel Energy about electric reliability and cost impacts on consumers.
• The fuel-switching plan means the typical Colorado family will pay approximately $270 more per year for electricity in 2020 than it did in 2010, according to Xcel Energy.
• The plan is dangerously reliant on natural gas. Given the limited gas storage on the Front Range, any disruption to gas supply could force rolling blackouts similar to what we experienced on Presidents' Day 2006, according to un-rebutted testimony at the PUC.
• In testimony, Xcel strongly urged the Commission to "reject all of the fuel switching scenarios," and pointed out that any fuel-switching scenario would be "more expensive" than continuing to use coal.
• Fuel-switching will require that natural gas be burned in power plants designed for coal, including a critical coal-fueled power plant known as Cherokee 4 that serves a central role in system operation for Xcel in the Denver area. Xcel stated the company "does not believe that it makes economic sense to burn natural gas in the Cherokee 4 boiler for an extended period of time." Xcel went on to state, "Our concern … is the inefficient burning of natural gas in coal boilers and the unnecessary emissions that result from this inefficiency."
• Fuel-switching means Coloradans will be entirely at the mercy of highly volatile price swings in natural gas. The cost of natural gas to produce electricity in Colorado rose more than 175 percent between 2002 and 2008, according to the U.S. Energy Information Administration.

Despite these concerns and the devastating impact on the people of Colorado, the PUC issued its final order mandating the fuel-switching scenario. In fact, the current Commission chairman even told the news media that the fuel-switching plan will be "less expensive to consumers than any other course." The facts tell a very different story and Colorado families and businesses will be forced to pay the price. Affordable and Reliable Energy Colorado (AREC) will continue to do all we can to protect Coloradans from this disastrous fuel-switching mandate.

Affordable and Reliable Energy Colorado, chaired by former Colorado PUC commissioners Polly Page and Carl Miller, is a statewide coalition of public and private stakeholders committed to supporting the sustainable use of our state's domestic fuel resources to reliably meet Colorado's growing energy demands in a low-cost and environmentally responsible way.

SOURCE Affordable and Reliable Energy Colorado