And if you guys have been listening to the show as of late, you know that every time EXCEL asks for a rate increase, an angel gets its wings.
Now I'm kidding wrongmovie.
It is super frustrating for me and everybody else to sit and watch our Public Utilities Commission continue to rubber stamp whatever XL asks for. Why do they ask for so many rate increases? Well, my next guest has a finger on, actually she has all fingers on the pulse
of energy in Colorado. She's Amy Oliver. Her work with the Independence Institute and Always on Energy Research is a must read if you want to know not only about where we are in energy production and energy distribution in Colorado right now, but we are headed in an extremely expensive,
dangerous direction, and that is headed towards net zero. She just wrote a fantastic column on Complete Colorado dot com that not only talks about the stuff we're going to talk about it here, but explains how XL makes this money, which is why we're seeing so much development. She also is a co host of a phenomenal program for nerds called power Gab and it is on the Independence Institute's
YouTube channel with Jake Fogelsong super interesting. They're not very long, and they are very very informative if you just want to, like, turn it on, listen to it. They occasionally have some charts and graphs, but you can just listen to it if you want.
It's outstanding. Amy Oliver, welcome back to the show.
Thanks, and don't be afraid of charts and grass.
I love charts and grass.
But sometimes I listen to podcasts in my car when I'm driving and they're like, and look at this chart, and I'm like, wait, stop, stop for the chart. But let's talk about this column specifically, because first of all, this column for somebody like if you just moved to Colorado and you have no idea what's going on about energy in Colorado, this article is like a perfect, perfect primer of how the system is set up and why we are continuing to see rates go.
Up and up and up and up.
And now we're just going to be told when the power is going to be out when the wind blows by Excel Energy.
So Amy, let's start with that.
Because we just went through one of these public safety I call it the PIPSPS plan, which you can either calling a cat or but EXCEL now in order to avoid liability, is turning off the power completely and leaving people in the dark. I mean, that's pretty much what we're talking about here, right right.
Well, so just for folks who don't know, means public safety power shut off.
So they are.
Shutting it off for our own safety, and we should I should let everybody know.
And I know you have Mandy probably.
A million times, so I'll add it to a million times plus one because you can never hear it too much. EXCEL can only operate under what the legislature and so it has to be some sort of legislation pass signed by the governor and then what the Public Utilities Commission allows them to do. Now, they are very high paid lobbyists and they have a lot of them that persuade lawmakers that'll and then they have really good attorneys that appear at the PUC.
To argue their case. So what is this.
I love that PSPs public safety power shut off. This really stems from the Marshall fire. And what the state is doing or allowing them to do, is to.
They are managing risk through.
These shutoffs rather than hardening the system, which by the way, is going to cost money.
So right, pareers are.
Going to pony up money, but it is easier and it is less expensive to shut off power to affected areas that it would be to quote harden the system. Now that doesn't mean they aren't doing that, because they are there. They've got I don't know, I think I put in there there's something one point nine billion dollars or something for wildfire mitigation. But there's also just the politics involved in all of it as well and the
finances that are involved. So Excel gets makes a whole lot more money if they get to build new capital assets rather than just maintain what they already have.
I mean that they are.
Incentivized by the legislature and by the Public Utility Commission to build because if they build, that's an asset that goes into what to know is their asset base, and then they get a guaranteed rate of return. Now, when I say guaranteed, it's usually guaranteed over a certain amount of time.
They have to go back and.
Reargue it, but it generally goes between nine and ten percent.
And do the math. So if you can build something.
Let's say your asset base in twenty twenty five, it's ten billion dollars. But if you build, oh, I don't know, four or five new generating stations, you can or generating plants, and then your asset base by twenty thirty goes to fifteen billion dollars.
Do the math.
Ten percent of fifteen billions a whole lot better than ten percent of ten billion.
Let me go back to the fact that the choice has been made by Excel. Their choice is in order to mitigate liability, and then they say, for your own safety and protection is to turn off the power. This, for me, is the ultimate sort of flex by someone who has a monopoly. Because if they didn't have a monopoly and they had competition in the market, if their competitors said, you know what, we're going to keep the power on one hundred percent of the time, we're going
to bury our power lines. We're going to eat that cost, but we're going to make sure you have reliable energy, well then it's not really a great choice, is it. But because they have no competition, the choice to simply say we're going to eliminate our life ability by turning off the power. We're so sorry, but it's for your own good. That is incredibly frustrating.
To me, it is it is to avoid another nine figure settlement, I mean six hundred and forty million dollars.
And they didn't they didn't, you know, acknowledge fault.
They just said, this is what the this is what we'll we'll pay out. And by the way, that was the apparently two sources that sort of came together. There was some burning embers and then there was a down power line that sparked and that was the Marshall Fire.
And we all know what happened there.
I mean, the devastation was just I mean, it was cataclysmic, But that was to that's to avoid a six hundred and forty million dollars settlement.
And it is very much.
What California does is they shut off power ahead of these events. Now, Wyoming does not shut off power. So why I'm talking with a friend in Torington. Why if you're new to Colorado and you think the wind is bad here north to Wyoming.
Yeah, they've got real wins.
Yeah.
And friend, the same time that power was shut off in Colorado, they were having really bad wins up in Wyoming. And I said, your power shut off, She goes, No, wasn't shut off in Wyoming.
She said, we did have a.
Slight outage and they were out there and got it back up right away.
Because of course we want to make sure.
Hospitals are nursing homes which have backup generation.
But it doesn't last, you know, it's they probably aren't going to be able to go three or four or.
Five days without it. So they got their power back on within a few hours. And this is in the middle of a wind storm, a wind event.
That was happening, and that was up in Wyoming.
But they also just have a different I think, actually, Mandy, I think it comes down to this. Elected officials, utilities, just people in positions of leadership have had more honest conversation with residents of Wyoming than our elected officials than our people in positions of leadership have had with Colorado's And that is that there's a trade.
Off, right right, you want the power to stay on.
We've got a hardened the grid and this is what it's going to look like now it may go off, and they've also limited the amount of liability that because they've made those trade offs, They've they've had that conversation and they've made those decisions.
That means that people are saying, yep, got it. We want the power to stay on and we won't. We're not going to blame you.
For absolutely everything if you've done all that you can to mitigate it. And so they've had those conversations. You don't have those in Colorado.
To your point, let's talk about that mitigation, because even when Excel does try to do certain kinds of mitigation, people complain they don't want things cut. It's so ugly when you cut all the brush around. So we created this dynamic where XCEL absolutely has plausible deniability. In my eyes, I said after this, I'm like, you know, I think what happened in the Marshall fire was a catastrophic natural disaster.
It wasn't Excel's negligence that created that problem. You know, maybe they could have done something a little bit better, but it's not like they have, you know, infrastructure that's falling apart. It's infrastructure that could be better, but it's not horrible. I don't think they should have been held liable. I understand want someone to blame, but if there had been a lightning strike, there would have been nobody to sue, right, and so in that case, I think XL has plausible deniability.
But their job is to deliver power. So how can you ensure that you are going to deliver power consistently?
And I don't know if you've seen Gabe Evans.
Bill that requires energy sources to be reliable for thirty days, like continuously, which is going to be a real problem for green energy. But let me ask you this about the PUC, about the Public Utilities Commission, This current commission is completely captured by green energy advocates, right, is there anyone on the PUC.
That's not one hundred percent?
Now I would say this with this caveat one hundred percent because and by the way, two people from Boulder, one from from Eagle County, so you have very far left counties that are represented. So there's no geographical, you know, equal representation. There is no diversity of thought, you know, philosophically. The one thing I would say is that I do think can we talk about Jake and I talk about
this on power Gap. We do think that Eric Blank, who's the chairman, is starting to see it like he's and once you see what the problem is, you.
Can't unsee it.
So there are times when I think he's blanking sos because, in particular on the clean Heat plan, where we have to get rid of all of our natural gas appliances, He's like, not sure we can force a utility that only provides natural gas service essentially to commit suicide.
Now those are my words.
Right right, those are kids.
But you can see by his questioning that he's starting to and he's also when you hear him talk, he's super concerned about cost. I mean he says this in interviews with other with publications and things like that, cost is what he is worried about. I'm worried about cost, but I'm also worried one hundred percent about reliability because we are going to be able to keep the lights on?
No, we're not, and you know, if we are.
One of the things I have liked about Governor Jared Poulis is his focus on trying to bring tech to Colorado, not just you know, workers, but industry and how in the world are we going to be able to track tech, you know, data centers, things that require huge amounts of power on renewable energy. That's insane. Amy, I have another question about that though. Right now, if we were if we were at one hundred percent renewables, right, and we're in the middle of winter and the wind is it
blowing and the sun is not shining. We can buy energy from surrounding states. But if the green energy advocates get that all, if the whole country goes green energy, where does the energy come from?
Where does the power come from?
I mean, it seems like you would eventually run out of places to buy it from.
Well, so here's what happens.
Maybe you can buy it from another state, but if you're in the middle of a severe weather event, chances are its regional. So Wyoming isn't going to send power to Colorado if it doesn't have it and it's and its residents need it.
Kansas isn't going to give us power if its residents need it. Think about when I seventy is shut, it's Kansas are if it's shut them.
Let's say, you know somewhere in a Rapahoe County to the Kansas line. It's also shut from the Kansas line to someplace else they need the power. Same thing with you know, Arizona or New Mexico or Utah.
And people have asked me, well, so what do you do? And I said, well, get a generator number one, or get a couple of them.
But if I lived near the Utah border, I'd see if I could throw an extension quarter over the line and see if I could just plug it in, because I guarantee you Utah will have power. Utah has is really the gold standard of reliable power I think in the country. Based on their policy, Colorado is the opposite of that, and so we won't we won't have power.
And we've actually modeled this at AOER. We model cost and reliability and based on even the Governor's preferred plan that came out of the color Energy Office after twenty forty, based on historical weather patterns. Because we look at weather patterns, we go back decades and look at weather patterns to
see what they could look like. There are times when Colorado there won't be sun, there won't be wind, and we're going to run out of battery backup, and you could be out of power for seventy two hours in the middle of brutal cold weather.
Amy, I just asked my assistant chat GPT, the best assistant I've ever had to play with you, Yeah, yeah, to please tell me what would be required if we were on all a renewable energy, what kind of using today's battery technology? How many batteries would be required to run the Denver Metro for forty eight hours?
Okay anywhere?
They said, anywhere between sixty five thousand and eighty five thousand giant truck size batteries that would take over three acres of just battery, battery, battery, battery. And I just think to myself, like, you see how these car fires go. Can you imagine a battery backup plantation, which is what it would need to be catching on fire? I mean, it would be an environmental disaster.
That would be massive.
I mean just it would be I just don't think people have thought this through all the way.
And you're putting it into the weather.
It's not like a battery you keep stored at your at your house at seventy degrees a consistent temperature. These are batteries that are that are out in the weather. And and Mandy, that's just assuming you.
Could get those batteries right the way.
The batteries that the Colorado Energy Office is saying they want to use these twelve hour batteries, they don't exist.
Yeah, not for the level that we need to put.
Yeah, we're putting we're putting our grid into what we're relying on technology that doesn't exist.
That's it. It's nuts.
And the whole thing about data center, I mean, I don't know if you. I'm sure you read it as thorough and thoughtful as you are. The I think was it the Denver Metro Chamber or somebody who had one of these, one of these panels, and there were it was all on data centers, and they asked this guy, can can you run a data.
Center on wind and solar and batteries? And he just flat he just said, no.
No, you can't.
Why that's why. And I was in a I was in another.
I was at a conference listening to a speaker who said Excel had been approached by ten data centers.
Nine of them went to Wyoming.
WHOA, yeah, so that there are more out there, there are more, There are more I heard today. I want to say there are five or six out there now, but there have been nine that have gone to Wyoming. And this, this this forced march to decarbonization net zero is it's like a it's like a jobs act for
Wyoming and Utah, in Kansas and everything else. The point is they're going to go where the power is reliable, and even if they want it clean, they want you know, they want to get as close to decurbanization as possible, they still want to have some kind of thermal generation backup they needed.
Did you see that Meta has now contracted with three small modular reactor companies. They're planning their next data center in New Albany, Ohio, which is right next to my husband's hometown. So the next time we go back to my husband's home, Dawn, I'm like, we're going to New Albany. I'm going to check this out. But they're using small They're intending on using small modular reactors, and I think that the data center problem will probably be solved with
small modular reactors. But are those even going to be allowed in Colorado? Because of the anti nuclear sentiment that exists with the environmentalists here. It's like every time we take a step forward, there's somebody to shove us five steps back.
We'd have to change existing law. So Colorado did include nuclear as clean.
But remember in.
Law it says by twenty fifty Colorado will be one hundred percent wind and solar or something renewable. So they don't consider nuclear as renewable, so that law has to change.
Otherwise, why would anybody invest in nuclear?
Yes, it's clean under Colorado statute, and it's listen and it's just clean, let's be honest.
Yeah, and it's a hundred percent reliable.
I mean it is a workhourse that when I was in North Carolina during a power outage, the one power source that was just cranking along was nuclear and ten thousand megawatts all the time, twenty four to seven, three hundred and sixty five days a year. But Colorado, you wouldn't invest in it because by twenty fifty your portfolio must change. It must reflect one hundred percent wind, solar, and I guess battery. So Colorado has to change its law.
Good.
We had a good first step last year, but it's got to go further.
Well, I just got this text message from one of our Wyoming listeners, Amy. I'm speaking with Amy Oliver. She's with the Independence Institute and the host of power gab on IV's YouTube channel. Mandy, we want to thank you profusely for all the economic development you are providing us. There are currently fifteen data centers in Wyoming, five more under construction. So I do have this. Let's see, we
have a couple of questions. One, Mandy, please ask your guests if Xcel's insurance company could possibly be mandating the shutoffs.
What does that look like?
Do you know the inside baseball on those machinations within XL.
I actually don't know that, but I would suspect the answer to that would be yes, because Excel's insurance company was on the.
Hook for a good part of that six hundred and forty dollars.
So I am I'm sure that they are saying to Excel, you need to mitigate this any way possible. And also, you know what it may be too that in the future, your property insurance.
Your homeowner's insurance may.
Be asking the same thing because they don't want to pay for it again.
Amy Oliver a fantastic guest. I'm telling you guys need to watch Power Gap because she goes. She and Jake go just as deep, super interesting, different topics every single and it's like a half hour. It's like a half hour out of your day, and you'll be a million times smarter. Amy, Thank you so much, great great column. I put it on my blog today. I hope everybody reads it. And hopefully we'll talk to again soon.
Hey, thanks many appreciate it.