The Colorado Public Utilities Commission should reject Xcel Energy’s request to weaken penalties the state imposes after utility customers endure power outages.
The issue isn’t just that two weeks ago Xcel had its first wintertime rolling blackouts – we don’t know enough yet to judge Xcel’s decision to trigger the outages. The real issue is that the PUC shouldn’t surrender a tool that can prod Xcel into improving service reliability.
Current rules let the PUC fine Xcel up to $16 million a year for extensive or repeated power outages. The PUC adopted the rules in 1996 when the former Public Service Co. of Colorado went through two mergers that eventually created today’s Xcel, and consumer advocates worried that Xcel might not properly maintain quality-of-service levels. That original 10-year plan expires this year, so in late 2005 Xcel proposed self- serving modifications.
However, the quality-of-service plan has proven effective and shouldn’t be jettisoned.
Xcel customers experienced outages in the summers of 2002, 2003 and 2005. So, over the past six years the PUC made Xcel pay $40.6 million in customer rebates. While the rebates averaged only about $32 per customer, the penalty contributed to Xcel’s decision to invest millions of dollars in system reliability.
But the deals also show the pitfalls when the PUC gives Xcel too much leeway. Last year’s settlement required Xcel to spend an additional $11 million beefing up service and reliability. In exchange, the PUC said it wouldn’t seek fines for outages in 2006. That means Xcel won’t give rebates for the recent blackouts.
But the changes Xcel now proposes are wrongheaded. Xcel’s initial proposal, filed last summer, was so egregious that Denver and many other cities objected. On Feb. 17, the Friday before the blackouts, Xcel filed a revised proposal. While better in some ways, it still envisions loosening rules that have served Colorado well. For example, the plan would let the PUC impose penalties, but only up to $12 million a year.
Bluntly, Xcel hasn’t given the PUC any reason to give up its sledgehammer.
