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Xcel Energy Proposes Early Start on Colorado Solar Power

Posted on: Thursday, 1 December 2005, 21:00 CST

In an effort to jumpstart the development of the solar power industry in Colorado as mandated by the voter-approved Amendment 37 initiative last November, Xcel Energy today made an interim filing that would allow the program to begin in earnest on Jan. 1, 2006.

The filing today with the Colorado Public Utilities Commission (CPUC) sets forth the amount Xcel Energy would charge all customers per month to fund the state's mandated Renewable Energy Standard (RES). It also establishes the rebate amount as required by Amendment 37 that will be paid to those who take part in the solar program.

The CPUC has until March 31, 2006, to establish rules and regulations for the RES in Colorado, including solar power development.

"We need to begin the installation of solar resources as quickly as possible, if Xcel Energy is to meet the mandates approved by Colorado voters," said Fred Stoffel, Xcel Energy vice president for policy development.

Xcel Energy would charge customers an additional 1 percent of their monthly electricity bill to support the renewable energy mandates, through a proposed electricity "rider" known as the Renewable Energy Standard Adjustment (RESA). The Colorado General Assembly approved a charge up to this amount earlier this year.

Based on projected electricity bills as of Jan. 1, 2006, typical residential customers would pay an estimated 59 cents a month and typical small-business customers would pay an estimated $1.14 a month to support renewable energy activity. Larger business and industrial customers also would pay 1 percent of their total monthly bill. In total, Xcel Energy would collect an estimated $22 million a year through RESA to support the mandates.

A second component of the filing today addresses in part the total solar payment for customers who install photovoltaic systems. The total solar payment would be $4.50 per watt.

In its filing, Xcel Energy first seeks to rebate customers $2 per watt installed on customer premises, up to 10,000 watts (or 10 kilowatts, as 1 kilowatt equals 1,000 watts). Also as part of the program, the company would purchase Renewable Energy Credits (RECs) generated by the customer's system, for $2.50 per watt. These credits then would be counted toward the company's RES requirements.

A common size for residential photovoltaic systems in Colorado is 2-3 kilowatts, and payments to customers at this size would be in the $9,000 to $13,500 range. This would cover approximately half of the installation cost, since typical photovoltaic systems are priced at $8,000 to $10,000 per kilowatt.

Under the initial program, customers may install up to a 10-kilowatt system on their premises, for a recovery of up to $45,000. For installations larger than 10 kilowatts, a future program is planned to provide for a competitive solicitation, or bidding process.

Xcel Energy also notes that in another filing today, it would decrease electricity customer bills by $162 million, effective Jan. 1, 2006, and pending CPUC approval. The reduction is an annual rider known as the Electric Commodity Adjustment, which covers costs for generation fuel and purchased energy.

In November, the company also filed its annual Air Quality Improvement Rider, approved by the legislature in 1998 to reduce sulfur dioxide and nitrogen oxide emissions at Denver metro power plants. The company also recently filed its annual Purchased Capacity Cost Adjustment, which pays for independently produced power in Colorado that Xcel Energy uses in meeting its customers' energy demand. If approved, these changes would begin Jan. 1, 2006.

Based on the overall impact of all four riders, typical residential customer bills would decrease by $3.71 a month and typical small-business customer bills would decrease by $7.63 a month.

Xcel Energy -- doing business in Colorado as Public Service Co. of Colorado -- is a major U.S. electricity and natural gas company, with operations in 10 Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers through its regulated operating companies. In terms of customers, it is the fourth-largest combination natural gas and electricity company in the nation. Company headquarters are located in Minneapolis. More information is available at xcelenergy.com .

Source: Business Wire

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