Colorado Energy Plan bid rigging?

By |2018-11-28T21:49:36+00:00November 29th, 2018|Energy|0 Comments

The Colorado Energy Plan is a massive $2.5 billion scheme by Xcel Energy that substitutes wind and solar-plus-storage power for existing coal fired generation. The Plan is supposed to be based on a competitive procurement that received a multitude of bids. Only a few were selected and the makeup of these big winners strongly suggests that there was some form of bid rigging on Xcel’s part.

In particular, it looks like Xcel bought off Pueblo County, which was fighting the initial Plan because it would lose the tax revenue from the two running coal plants that were proposed to be shut down. Out of over 400 bids only 11 were selected. They included several monster solar-plus-storage projects in Pueblo County. These projects that will be by far the biggest solar-plus-storage experiment systems ever built in America.

The benefits to Pueblo County from these massive and experimental solar-plus-storage projects are huge. They greatly offset the loss of tax revenues from shutting down the two coal fired power plants. The capital investment is estimated to be a whopping 670 million dollars, which speaks to the unprecedented scale of the proposed facilities.

New tax revenues on these monster facilities will be roughly six times what they were on the coal plants. Plus there are several beneficial side deals between Xcel and the County. No wonder Pueblo County likes the Plan. In fact Xcel has an entire section of their Plan touting the great benefits to the County.

It hardly seems coincidental that Pueblo County, which was fighting the Plan before the bidding, would land this many winning projects out of over 400 bids. In fact it is very unlikely. Thus the result suggests that Xcel engaged in some form of bid rigging.

Mind you we have no hard evidence of bid rigging, just how it looks. CFACT has petitioned the Colorado Public Utilities Commission to investigate this matter, but so far nothing has happened, at least not publicly. It may matter that one of the three Public Utilities Commission members is from Pueblo County.

Bid rigging can take many forms, some quite subtle. To begin with, some bidders can be invited informally to bid, while others are quietly dissuaded. In this case Xcel might put the word out that huge solar-plus-battery projects are favored. That good projects be located in specific places can be suggested, in this case Pueblo County. One can even suggest the best bid amounts, which in this case were deemed incredibly low.

Then too the competitive selection process was very complex, involving a lot of computer modeling. Such models are easily biased. Unfortunately the bids have not been made public, not even the winning ones. This makes it very difficult to evaluate the selection process, but the results are clearly suspicious.

The winning bids were supposed to provide the best portfolio of projects for the Colorado ratepayers, not the best for Pueblo County. Getting the best deal for the ratepayers was the whole point of the competitive process. That process may have failed.