State regulators charged with protecting consumers of electricity made a big mistake earlier this year, and now they’ve got to figure out how to save face. They helped to craft a bill that was a gift to Xcel Energy and natural gas producers, a bill that legislators then rushed into law in order to deflect concern about its effect on residential bills.
But this week the chickens came home to roost.
Under the law, Xcel was expected to retire several coal-fired plants by the end of 2017 and replace them with natural-gas facilities. But the company now confirms that it can’t mothball one of the plants by then — at least not if it intends to replace the facility with a brand-new gas-fired plant.
In fact, Xcel warned on Tuesday that it is “unable to continue to reliably operate our electric system and retire Cherokee 4 by the end of 2017.”
Savor that for a moment, please: A law Xcel helped to write can’t be fully implemented without putting the electrical grid at risk.
What were its lobbyists and executives thinking when they signed off on House Bill 1365?
The more interesting question, however, is how regulators at the Public Utilities Commission will save the company’s bacon. Because make no mistake: The three commissioners — and particularly chairman Ron Binz and Matt Baker — are deeply vested in the law’s success. As early as last December, Binz and Baker had talked with natural gas interests about possible legislation and have been touting it since.
They’re probably as surprised as anyone by what’s happened.
Who would have thought that when Xcel turned in its plan in August, it would extend the program into 2022 — five years after the law’s drop-dead date?
Who would have predicted the commission would be boxed into admitting, as it did last week, that the law “clearly requires the emissions reduction plan be fully implemented by 2017”?
Finally, who would have anticipated the Colorado Department of Public Health and Environment declaring, as it did Monday, that Xcel’s “truncated plan” — meaning everything in it up to 2018 — failed to “meet all reasonably foreseeable air pollution requirements,” as the law requires?
Until Monday, commissioners had an obvious exit option: Claim the truncated plan was good enough and leave it at that. But the health department’s opinion would seem to strip them of that option.
What will they do?
Here’s what Binz and Baker, at least, should do: Disqualify themselves from any further role in this case. Binz in particular was up to his eyeballs in crafting parts of the bill, as revealed in e-mails released in response to an open records request by the Colorado Mining Association. At one point, for example, he exulted, “The eagle has landed. The Commission and Xcel have agreed on language for cost recovery.”
Three days later, on March 11, Binz sent a “final version” of the bill to the other commissioners, noting, “I was working with Karen Hyde” — a top Xcel official — “up until 9 last evening to hammer out the final language in a couple areas.”
These two commissioners are so compromised by their role in crafting HB 1365 that they have no business searching for ways to resolve the current impasse, let alone assessing the likelihood that Xcel can spend $1.3 billion in replacing existing power plants with new construction while switching to a fuel that historically has been more costly without putting significant pressure on consumer bills.
State law requires commissioners to disqualify themselves “in any proceeding in which their impartiality may reasonably be questioned.” With the implementation of the natural-gas law now on life support, it’s time for commissioners to do the right thing.
E-mail Vincent Carroll at vcarroll@denverpost.com.
