HB 1365 Update: The Appeals Are in…and Everyone Objects to the PUC’s Decision

January 7, 2011 by williamyeatman
Filed under: Archive, HB 1365 

This week was the deadline to appeal the PUC’s decision on a HB 1365 implementation plan, and judging by the briefs, no one is satisfied that the PUC’s decision passes legal muster.

Here’s a roundup of who argued what, along with links to the appeals:

  • Xcel alleges that the PUC’s decision “fails to put into place one of the cornerstones” of HB 1365. This “cornerstone,” according to Xcel, entails faster rate recovery. The PUC decided that Xcel must wait until each rate case procedure (every 1 to 2 years) for cost recovery of construction work in progress; Xcel claims it is entitled to monthly payment. Legally, Xcel appears to be in the right: Part of HB 1365 awfulness is that it incents Xcel with extraordinary rate treatment. If the PUC holds firm, Xcel can appeal to a state court, or it could walk away from the Clean Air Clean Jobs Act (I’ve discussed that delightful possibility here).
  • Gas Producers objected to the handling of highly confident information, like the long-term gas contract signed between Xcel and Anadarko (this contract is the putative hedge against Colorado’s increased reliance on the mercurial gas market). In particular, Gas Producers sought an amendment to the decision making it clear that the treatment of highly confidential information in the HB 1365 docket would not become precedential for future dockets.
  • Independent Power Producers (“IPPs,” they are power generators that compete with Xcel on the wholesale electricity market) asked the PUC to amend its decision to establish rules that would skew the wholesale electricity market in the IPPs favor, at the expense of Xcel. As HB 1365 skewed the market to Xcel, the IPPs apparently are asking for a quid pro quo.
  • HB 1365 is a bill written by special interests in order to exploit Colorado consumers, yet the feckless Office of the Consumer Counsel had only one complaint with the PUC’s decision (and, moreover, was a non-entity during the hearings). The OCC objected to the PUC’s decision to investigate the use of ratepayer funds to pay for the re-education of Colorado coal miners who lost their jobs because the Governor Bill Ritter picked winners in the energy industry.
  • The most adversely affected parties (Peabody Energy, Coal Miners Association, and the Associated Governments of Northwest Colorado) filed similar appeals. All of them argued that the PUC violated their due process, and they are all correct, IMHO. The PUC seemed to be making up the rules as it went along. Over the weekend, I’m going to write a post about the PUC’s due process problems, but in the meantime, the breadth of the legal challenges described above is the most telling evidence that the PUC was unhinged from any legal moorings.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.

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