Full Cost Recovery for Smart Grid City

You will recall that even in progressive Boulder, Colorado there was a public outcry over the higher than expected cost of the Smart Grid City experiment with smart meter technology.  To assuage the outcry the Colorado Public Utilities Commission opened a proceeding and threatened to disallow the cost overruns by denying Xcel Energy a regulatory permit to pass the costs through to ratepayers.  That permit is called a Certificate of Public Convenience and Necessity.

But now that the outrage has subsided and the facts gathered the hearings officer in CPCN docket # 10A-124E has filed a recommended decision that the PUC grant the CPCN with full recovery of the $44.5 million Xcel spent on the project.  The interveners in the case have 20 days to file exceptions to the recommended decision and the Colorado Commission must decide the case by December 15th.

After the embarrassing black eye Xcel Energy got for the cost overruns this case is turning out to be an example of a public flogging with no lasting damage assuming the PUC accepts the cover of the hearing officer’s recommended decision based upon the legal burden of the “weight of the evidence” standard in place in such proceedings.

It helps that Colorado broadly favors smart grid development as a means for achieving its clean energy carbon emission reducing goals. There were conditions attached to the decision:

1.      Consumer Privacy for Smart Grid City Project Data.  Neither Xcel Energy nor any of the technology partners who invested in the project in hopes of gaining competitive advantage will be allowed to use consumer data collected by Smart Grid City or use it for any other purpose without explicit PUC approval.

2.      Inventory and Track Intellectual Property Created.  Xcel must keep a listing of all the IP created so the PUC can police whether it is following the public disclosure condition and allow others to learn from Xcel’s mistakes.

The outcome could have been worse for Xcel Energy but sticking the utility with the cost overruns for a project enthusiastically supported by the State would have chilled future experiments and would not have been in the public interest.  But the sins of causing a public stink and embarrassment for the PUC still have consequences so Xcel had to endure its trip to the regulatory woodshed.