Energy-efficiency savings are becoming more expensive and requiring a robust efficiency program could lead to higher bills Xcel Energy officials told the Colorado Public Utilities Commission.
In three days of hearings before the commission this week, Xcel officials and energy-efficiency advocates sparred over setting a new energy efficiency goal for the utility.
Xcel residential customers pay an extra 3.5 percent of the their total bill to pay for incentives, such as rebates on energy-efficient appliances and compact fluorescent light bulbs.
“This is a story of success,” Xcel spokesman Mark Stutz said. “The low-hanging fruit has been picked.”
Many of the energy efficiency programs Xcel initiated are now widely adopted or part of regulations and can no longer be counted by Xcel.
So the utility wants to reduce their efficiency expenditures by about 50 percent over the next five years.
“Xcel has consistently underestimated the cost of the program and exceeded the goals,” said Howard Geller, executive director of the Southwest Energy Efficiency Project or SWEEP.
The energy efficiency project urged the commission to raise the efficiency targets.
Under a 2007 state law, investor-owned utilities, like Xcel, must finds ways to reduce demand — known as ” demand-side management” — in return for financial incentives.
In 2012, Xcel spent $92 million on energy-efficiency programs and received $23 million in offsets and incentives.
To meet the 2015 target of 411 gigawatt-hours of cuts in 2015 would cost $115 million and that would rise to $185 million in 2020 to meet the 549 gigawatts targeted for that year, according to Xcel.
In those five years, $962 million would be spent to save 2,914 gigawatt-hours.
Those costs would be passed into bills, Xcel’s Stutz said.
A gigawatt is enough electricity to power 230 average residential Xcel customers for a year.
The Colorado Office of Consumer Counsel, which represents consumers and small business before the commission, has called for even deeper cuts in the efficiency program, calculating that the five-year cost of the program will be $1.3 billion.
“Rate impacts of $1.3 billion are not acceptable,” Consumer Counsel analyst Chris Neil said in testimony.
Instead of cutting the target the SWEEP is calling for a 30 percent increase in the target.
Accounting for the program costs — and Xcel’s incentive payments — customers would still reap $600 million in energy savings, Geller said.
“The low-hanging fruit may have been picked, there is new fruit growing,” Geller said.
Mark Jaffe: 303-954-1912, mjaffe@denverpost.com or twitter.com/bymarkjaffe
UPDATED: April 25, 2014 This story has been corrected in this online archive. Due to inaccurate information, the projected bill increase was not correct in the original version of the story.