CMA contends Public Utilities Commission Chair Ron Binz and Commissioner Matt Baker were improperly involved in a "behind closed-doors deal" with Xcel and natural gas companies over the power plant plan. "The commissioners have breached their duties to the people of Colorado by making a private deal with Xcel Energy ... to allow it to 'spend itself rich,'" CMA, which opposed the
bill and Xcel's plan, said in an October 12 PUC filing.
The PUC commissioners negotiated and helped draft provisions of the state's Clean Air-Clean Jobs Act, which directed Xcel to propose a plan that would cut nitrogen oxide emissions by 70% to 80% by 2017 to meet anticipated federal clean air regulations affecting at least 900 MW.
Binz contends that his role in developing the bill were normal and done at the direction of Colorado Governor Bill Ritter, a Democrat. "The commission is routinely involved in the legislative process and our actions were entirely legal and appropriate; indeed, this is a part of my job as chairman," Binz said in an opinion article in the October 13 Denver Post. "My role in the legislative negotiations served one purpose: to protect consumers."
PUC spokesman Terry Bote declined to comment on past commission involvement in legislative matters.
Under Xcel's plan, released in mid-August, the utility would retire and convert two Denver-area coal plants in phases. Xcel would also convert its 111-MW Arapahoe unit four to natural gas by the end of 2013 and retire a 186-MW coal-fired unit by the end of 2017. In addition, Xcel plans to upgrade
the pollution control equipment at the 505-MW Pawnee and 446-MW Hayden plants.
Disqualifiy Binz and Baker, CMA
During talks with lawmakers, Xcel and natural gas companies as the power plant bill was being drafted, the PUC commissioners assured the utility that the commission would grant Xcel "extraordinary cost recovery" for the plan, CMA said. Also, the commissioners encouraged Xcel to submit the most expensive plan possible so the PUC would have a stronger basis to grant
extraordinary cost recovery, CMA said, quoting e-mails from Binz the association got via Colorado's open records act.
For example, in an e-mail Binz sent to Karen Hyde, Xcel's vice president for regulatory affairs, the chairman said, "Here's our bottom line. We will agree to using extraordinary cost recovery in proportion to the pressure that the approved plan puts on the company's financial health ... the larger (and faster) the cost burden in the company's approved plan, the stronger the basis for the commission to adopt extraordinary regulatory measures to assure the company's financial health."
In talks last fall with Xcel and natural gas companies, Binz made clear his preference for legislation mandating a switch from coal to natural gas plants, according to memos from the commissioner.
"The commissioners made their deal with [Xcel] and the gas intervenors knowing they would immediately sit in judgment of [Xcel's] emission reduction and rate recovery plan," CMA said. "Given the sequence of events and the deep involvement of the commissioners in negotiating [the bill], the proceeding appears headed to a predestined outcome."
CMA contends that Binz and Baker should be disqualified from considering the case because they helped advance the private interests of Xcel and natural gas companies, they appear biased toward the companies and there is the appearance of impropriety.
"The fact that the commissioners, who are now functioning as judges in a trial-type hearing to implement the provisions of [the law], were heavily involved in and are currently invested in the deal cut with [Xcel] and the gas intervenors creates, at the very least, the appearance of impropriety
and, at worse, serious bias in this proceeding," CMA said.
Hearings on Xcel's coal plant plan are set to begin later this month and are scheduled to run into early November. The PUC is required to make a decision by December 15.
However, according to CMA, the PUC must stay the proceeding until it rules on the association's motion to dismiss the two commissioners from the case. Bote, PUC spokesman, said the PUC would consider CMA's request but has not scheduled a date to deal with it.
In another possible complication raised by CMA, the PUC needs at least two commissioners to make decisions. If the two commissioners withdraw from the case, the governor could appoint someone to handle the case or the PUC could select an administrative law judge to join the remaining commissioner on the case, the association said.
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