8/6/2019 Brad Klafehn: Objection to PSCo RESA Fee

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Objection of Brad Klafehn to Public Service Company of

Colorados 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 netmetered subscribers under schedule PV in order to replenish the RESA fund. Accordingto PSCo, [c]ustomers with net metering are not currently paying their fair contribution tothe 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 PSCoto impose repeated new charges on Solar*Rewards customers (see Klafehn Testimony inDocket 09AL-299E, August 5, 2009, concerning the attempt by PSCo to levyunreasonable T&D charges on PV customers).

I object to this new fee. We the power generators who are leading the way to arenewable energy future, and who have made PSCos progress in this regard possible -

should not now be subjected to a new fee based on incorrect analysis and misleadingstatements by PSCo.

The RESA fund was established to provide funding to promote the renewable energystandard goals of Amendment 37 and the subsequent amending legislation. Charges of2% were and are assessed against each subscribers electric bill to provide for the QRUsexpenses in implementing the standard. During the intervening years since 2004, PSCohas expended more money on renewables than the RESA fund contained. It now seeks toreplenish 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, thelegislation states that the Commission may ensure that customers who installeddistributed generation continue to contribute, in a nondiscriminatory fashion, their fairshare to their utilitys renewable energy program fund or equivalent renewable energysupport mechanism (Section 3, (1)(g)(IV)(B)). The operable word is MAY, notSHALL.

I show in this testimony that the proposed RESA charge is unfounded. Accordingly, theCommission should suspend PSCos Notice of Revision. If the Commission decides toexplore 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 funda level of renewable energy acquisition by PSCo. In our case, on our average pre-PVelectric 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

8/6/2019 Brad Klafehn: Objection to PSCo RESA Fee

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would not have to, in order to meet the REC standard. We, and other Solar*Rewardsgenerators, have already contributed far and above our fair share of RESA fees becausewe believed strongly in distributed solar generation and have put our money where ourhearts are. To claim that we have not contributed our fair share to PSCos renewableenergy 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 theremaining 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 insolar.

PSCos own statements show that in many ways, Solar*Rewards generators loweredRESA fees are a non-issue. PSCos 2012 RES Compliance Plan shows that the shortfallin 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 theRESA 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 changemore than 10% in size from planning to execution (V. 1, S. 5, P. 17). PSCo also statesthat With the modifications to this program going forward, using pay for performancecontracts instead of up-front payments, the Company does not anticipate the Solar*Rewardsprogram 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, soits like money they have loaned to themselves, at competitive interest rates. (V. 1. S. 1, P.10)

So, what is PSCos true motivation here? I believe that their own statements show that it ispayback for distributed generators having squelched PSCos 2009 attempt to levy outrageous

fees on us for T&D costs. Note the section in the 2012 RES Compliance Plan titled RateStructure Concerns (V. 1, S. 5, Pp. 19-20) where PSCo again raises the subject thatSolar*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 PSCowas withdrawn, PSCo is now using this RESA issue to continue to nickel and dime solargenerators. The effect is continued uncertainty regarding the long-term costs of our energyproduction for PSCo.

I would make an alternative proposal to the Commission. You may allow Solar*Rewardsgenerators to pay PSCos proposed imputed RESA charge if you first credit us the fullamount 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, atthe end of that period, we still have not paid our fair share of RESA (that is, there is nocredit 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.