Colorado's Electric Utility Market Faces Deregulation Battle Over $205 Million Emission Reduction Plan

A plan to reduce emissions at three metro-area power plants in Colorado is sparking opposition from trade groups, independent power generators, and major industrial electricity users, who claim it is anti-competitive and will unfairly inflate the price of electricity. The proposal, backed by environmentalists and approved by Colorado lawmakers and the Colorado Air Quality Control Commission, requires Public Service Company of Colorado to reduce pollution at its metro-area power plants and charge customers an estimated $205 million over a 15-year period. The company plans to recover its costs through a "wires charge," which opponents argue will give it an unfair advantage over competitors.

Key Takeaways:

• The $205 million plan to reduce emissions at three metro-area power plants in Colorado is facing opposition from trade groups, independent power generators, and major industrial electricity users.
• The plan, backed by environmentalists, was approved by Colorado lawmakers and the Colorado Air Quality Control Commission, but still requires approval from the Public Utilities Commission.
• Public Service Company of Colorado plans to charge customers an estimated $205 million over a 15-year period to cover the cost of emission reductions.
• Opponents claim the company's plan to recover costs through a "wires charge" will unfairly inflate the price of electricity and give it a competitive advantage over future competitors.
• Independent power generators, such as Tri-State Generation and Transmission and the Colorado Independent Energy Association, say the plan will cost them customers if and when Colorado's electric markets are opened to competition.
• Major industrial power users, such as Coors Brewing, are concerned about the additional costs they will incur.
• Environmentalists, led by the Land and Water Fund of the Rockies and the Environmental Defense Fund, are fighting for the emission reductions, citing the plan's environmental benefits.

Statistics:

• $205 million: The estimated cost to customers over a 15-year period to cover the cost of emission reductions.
• 79 cents a month: The estimated monthly increase in electricity costs for customers to cover the cost of emission reductions.
• 15 years: The duration of the payment plan for customers to cover the cost of emission reductions.
• 25 cents: The increase in stock value for New Century Energies, which has a stake in the outcome of the deregulation decision.
• 6 trade groups, independent power generators, and major industrial electricity users: The number of companies opposing the plan.

Sources:

• "Stock Watch" article by News Staff Writer, Jerd Smith (no date specified)
• Public Service Company of Colorado
• Colorado Public Utilities Commission
• Land and Water Fund of the Rockies
• Environmental Defense Fund
• Colorado Independent Energy Association
• Tri-State Generation and Transmission
• Coors Brewing
• New Century Energies