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Objection of Brad Klafehn to Public Service Company of

Colorado’s Proposal to Revise the Renewable Energy Standard


Adjustment, May 19, 2011

Public Service Company of Colorado proposes to institute a monthly rider on bills of net
metered subscribers under schedule PV in order to replenish the RESA fund. According
to PSCo, “[c]ustomers with net metering are not currently paying their fair contribution to
the RESA because their energy consumption has been reduced through net metering.”
(Notice of Revision, March 10, 2011). This Revision is merely the latest gambit by PSCo
to impose repeated new charges on Solar*Rewards customers (see Klafehn Testimony in
Docket 09AL-299E, August 5, 2009, concerning the attempt by PSCo to levy
unreasonable T&D charges on PV customers).

I object to this new fee. We – the power generators who are leading the way to a
renewable energy future, and who have made PSCo’s progress in this regard possible -
should not now be subjected to a new fee based on incorrect analysis and misleading
statements by PSCo.

The RESA fund was established to provide funding to promote the renewable energy
standard goals of Amendment 37 and the subsequent amending legislation. Charges of
2% were and are assessed against each subscriber’s electric bill to provide for the QRU’s
expenses in implementing the standard. During the intervening years since 2004, PSCo
has expended more money on renewables than the RESA fund contained. It now seeks to
replenish those coffers, and so obtained authorizing legislation as part of HB10-1001.

PSCo states that as part of HB10-1001 “lawmakers added the requirement that
Solar*Rewards customers contribute their ‘fair share’ to the RESA” (undated letter,
Pamela J. Newell to Solar*Rewards customers). This is a mis-statement. In fact, the
legislation states that “the Commission may ensure that customers who installed
distributed generation continue to contribute, in a nondiscriminatory fashion, their fair
share to their utility’s renewable energy program fund or equivalent renewable energy
support mechanism…” (Section 3, (1)(g)(IV)(B)). The operable word is MAY, not
SHALL.

I show in this testimony that the proposed RESA charge is unfounded. Accordingly, the
Commission should suspend PSCo’s Notice of Revision. If the Commission decides to
explore this proposed revision further, they should conduct a full evidentiary hearing to
determine whether the proposed RESA charge is in fact justified.

The RESA was established so that all PSCo subscribers would, at a minimum, help fund
a level of renewable energy acquisition by PSCo. In our case, on our average pre-PV
electric bill, the 2% RESA charge would have amounted to about $14 a year (2% of
$700). In matter of fact, by installing a PV system at our expense, we contributed some
$17,000 of our money, upfront, to provide PSCo with renewable energy resources,
including on-going credit for our RECs. We absorbed the initial capital costs so PSCo
would not have to, in order to meet the REC standard. We, and other Solar*Rewards
generators, have already contributed far and above our ‘fair share’ of RESA fees because
we believed strongly in distributed solar generation and have put our money where our
hearts are. To claim that we have not contributed our ‘fair share’ to PSCo’s renewable
energy efforts is ludicrous. Our existing contribution would pay for the proposed RESA
fees for over 1,200 years! ($17,000/$14)

The issue is not that the proposed RESA fee is onerous – at $2.05 per month over the
remaining 17 years of our generation contract with PSCo, it will amount to only some
$400 – a pittance compared to what we have already spent to provide solar generation.
The issue is that it is unnecessary and unfair given our existing monetary investment in
solar.

PSCo’s own statements show that in many ways, Solar*Rewards generators’ lowered
RESA fees are a non-issue. PSCo’s 2012 RES Compliance Plan shows that the shortfall
in the RESA fund is a temporary occurrence and that it will be eliminated by 2017
(Volume 1, Section 1, Page 6). PSCo is diverting many other revenue sources to the
RESA fund, including premiums from the Windsource program (V. 1, S. 1, P. 7),
forfeited reservation fees (V. 1, S. 5, P. 6), and reservation fees for projects which change
more than 10% in size from planning to execution (V. 1, S. 5, P. 17). PSCo also states
that “With the modifications to this program going forward, using pay for performance
contracts instead of up-front payments, the Company does not anticipate the Solar*Rewards
program costs to be a significant issue for the RESA account in 2012 and beyond.” (V. 1, S.
7, P. 8). Plus, PSCo continues to earn imputed interest on the ‘deficit’ in the RESA fund, so
it’s like money they have loaned to themselves, at competitive interest rates. (V. 1. S. 1, P.10)

So, what is PSCo’s true motivation here? I believe that their own statements show that it is
payback for distributed generators having squelched PSCo’s 2009 attempt to levy outrageous
fees on us for T&D costs. Note the section in the 2012 RES Compliance Plan titled “Rate
Structure Concerns” (V. 1, S. 5, Pp. 19-20) where PSCo again raises the subject that
Solar*Rewards generators are not paying their fair share of T&D charges. (see also V. 1, S.
5, Pp. 14-15). Since this 2009 attempt to change the terms of our provision of power to PSCo
was withdrawn, PSCo is now using this RESA issue to continue to ‘nickel and dime’ solar
generators. The effect is continued uncertainty regarding the long-term costs of our energy
production for PSCo.

I would make an alternative proposal to the Commission. You may allow Solar*Rewards
generators to pay PSCo’s proposed imputed RESA charge if you first credit us the full
amount that we have invested to provide PSCo with renewable resources. Against our initial
$17,000 contribution, deduct the piddling $2.05 per month until our contract expires. If, at
the end of that period, we still have not paid our ‘fair share’ of RESA (that is, there is no
credit balance left), then it would be appropriate for us to contribute the imputed amount.
Otherwise, we already gave at the office!

Thank you for your consideration of these comments.

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