Speaker 1: And if you guys have been listening to the show
Speaker 1: as of late, you know that every time EXCEL asks
Speaker 1: for a rate increase, an angel gets its wings.
Speaker 2: Now I'm kidding wrongmovie.
Speaker 1: It is super frustrating for me and everybody else to
Speaker 1: sit and watch our Public Utilities Commission continue to rubber
Speaker 1: stamp whatever XL asks for. Why do they ask for
Speaker 1: so many rate increases? Well, my next guest has a
Speaker 1: finger on, actually she has all fingers on the pulse
Speaker 1: of energy in Colorado. She's Amy Oliver. Her work with
Speaker 1: the Independence Institute and Always on Energy Research is a
Speaker 1: must read if you want to know not only about
Speaker 1: where we are in energy production and energy distribution in
Speaker 1: Colorado right now, but we are headed in an extremely expensive,
Speaker 1: dangerous direction, and that is headed towards net zero. She
Speaker 1: just wrote a fantastic column on Complete Colorado dot com
Speaker 1: that not only talks about the stuff we're going to
Speaker 1: talk about it here, but explains how XL makes this money,
Speaker 1: which is why we're seeing so much development. She also
Speaker 1: is a co host of a phenomenal program for nerds
Speaker 1: called power Gab and it is on the Independence Institute's
Speaker 1: YouTube channel with Jake Fogelsong super interesting. They're not very long,
Speaker 1: and they are very very informative if you just want to, like,
Speaker 1: turn it on, listen to it. They occasionally have some
Speaker 1: charts and graphs, but you can just listen to it
Speaker 1: if you want.
Speaker 2: It's outstanding. Amy Oliver, welcome back to the show.
Speaker 3: Thanks, and don't be afraid of charts and grass.
Speaker 2: I love charts and grass.
Speaker 1: But sometimes I listen to podcasts in my car when
Speaker 1: I'm driving and they're like, and look at this chart,
Speaker 1: and I'm like, wait, stop, stop for the chart. But
Speaker 1: let's talk about this column specifically, because first of all,
Speaker 1: this column for somebody like if you just moved to
Speaker 1: Colorado and you have no idea what's going on about
Speaker 1: energy in Colorado, this article is like a perfect, perfect
Speaker 1: primer of how the system is set up and why
Speaker 1: we are continuing to see rates go.
Speaker 2: Up and up and up and up.
Speaker 1: And now we're just going to be told when the
Speaker 1: power is going to be out when the wind blows
Speaker 1: by Excel Energy.
Speaker 2: So Amy, let's start with that.
Speaker 1: Because we just went through one of these public safety
Speaker 1: I call it the PIPSPS plan, which you can either
Speaker 1: calling a cat or but EXCEL now in order to
Speaker 1: avoid liability, is turning off the power completely and leaving
Speaker 1: people in the dark. I mean, that's pretty much what
Speaker 1: we're talking about here, right right.
Speaker 4: Well, so just for folks who don't know, means public
Speaker 4: safety power shut off.
Speaker 3: So they are.
Speaker 4: Shutting it off for our own safety, and we should
Speaker 4: I should let everybody know.
Speaker 3: And I know you have Mandy probably.
Speaker 4: A million times, so I'll add it to a million
Speaker 4: times plus one because you can never hear it too much.
Speaker 4: EXCEL can only operate under what the legislature and so
Speaker 4: it has to be some sort of legislation pass signed
Speaker 4: by the governor and then what the Public Utilities Commission
Speaker 4: allows them to do. Now, they are very high paid
Speaker 4: lobbyists and they have a lot of them that persuade
Speaker 4: lawmakers that'll and then they have really good attorneys that
Speaker 4: appear at the PUC.
Speaker 3: To argue their case. So what is this.
Speaker 4: I love that PSPs public safety power shut off. This
Speaker 4: really stems from the Marshall fire. And what the state
Speaker 4: is doing or allowing them to do, is to.
Speaker 3: They are managing risk through.
Speaker 4: These shutoffs rather than hardening the system, which by the way,
Speaker 4: is going to cost money.
Speaker 3: So right, pareers are.
Speaker 4: Going to pony up money, but it is easier and
Speaker 4: it is less expensive to shut off power to affected
Speaker 4: areas that it would be to quote harden the system.
Speaker 4: Now that doesn't mean they aren't doing that, because they
Speaker 4: are there. They've got I don't know, I think I
Speaker 4: put in there there's something one point nine billion dollars
Speaker 4: or something for wildfire mitigation. But there's also just the
Speaker 4: politics involved in all of it as well and the
Speaker 4: finances that are involved. So Excel gets makes a whole
Speaker 4: lot more money if they get to build new capital
Speaker 4: assets rather than just maintain what they already have.
Speaker 3: I mean that they are.
Speaker 4: Incentivized by the legislature and by the Public Utility Commission
Speaker 4: to build because if they build, that's an asset that
Speaker 4: goes into what to know is their asset base, and
Speaker 4: then they get a guaranteed rate of return. Now, when
Speaker 4: I say guaranteed, it's usually guaranteed over a certain amount
Speaker 4: of time.
Speaker 3: They have to go back and.
Speaker 4: Reargue it, but it generally goes between nine and ten percent.
Speaker 3: And do the math. So if you can build something.
Speaker 4: Let's say your asset base in twenty twenty five, it's
Speaker 4: ten billion dollars. But if you build, oh, I don't know,
Speaker 4: four or five new generating stations, you can or generating plants,
Speaker 4: and then your asset base by twenty thirty goes to
Speaker 4: fifteen billion dollars.
Speaker 3: Do the math.
Speaker 4: Ten percent of fifteen billions a whole lot better than
Speaker 4: ten percent of ten billion.
Speaker 1: Let me go back to the fact that the choice
Speaker 1: has been made by Excel. Their choice is in order
Speaker 1: to mitigate liability, and then they say, for your own
Speaker 1: safety and protection is to turn off the power. This,
Speaker 1: for me, is the ultimate sort of flex by someone
Speaker 1: who has a monopoly. Because if they didn't have a
Speaker 1: monopoly and they had competition in the market, if their
Speaker 1: competitors said, you know what, we're going to keep the
Speaker 1: power on one hundred percent of the time, we're going
Speaker 1: to bury our power lines. We're going to eat that cost,
Speaker 1: but we're going to make sure you have reliable energy,
Speaker 1: well then it's not really a great choice, is it.
Speaker 1: But because they have no competition, the choice to simply
Speaker 1: say we're going to eliminate our life ability by turning
Speaker 1: off the power. We're so sorry, but it's for your
Speaker 1: own good. That is incredibly frustrating.
Speaker 4: To me, it is it is to avoid another nine
Speaker 4: figure settlement, I mean six hundred and forty million dollars.
Speaker 3: And they didn't they didn't, you know, acknowledge fault.
Speaker 4: They just said, this is what the this is what
Speaker 4: we'll we'll pay out. And by the way, that was
Speaker 4: the apparently two sources that sort of came together. There
Speaker 4: was some burning embers and then there was a down
Speaker 4: power line that sparked and that was the Marshall Fire.
Speaker 3: And we all know what happened there.
Speaker 4: I mean, the devastation was just I mean, it was cataclysmic,
Speaker 4: But that was to that's to avoid a six hundred
Speaker 4: and forty million dollars settlement.
Speaker 3: And it is very much.
Speaker 4: What California does is they shut off power ahead of
Speaker 4: these events. Now, Wyoming does not shut off power. So
Speaker 4: why I'm talking with a friend in Torington. Why if
Speaker 4: you're new to Colorado and you think the wind is
Speaker 4: bad here north to Wyoming.
Speaker 3: Yeah, they've got real wins.
Speaker 2: Yeah.
Speaker 4: And friend, the same time that power was shut off
Speaker 4: in Colorado, they were having really bad wins up in Wyoming.
Speaker 4: And I said, your power shut off, She goes, No,
Speaker 4: wasn't shut off in Wyoming.
Speaker 3: She said, we did have a.
Speaker 4: Slight outage and they were out there and got it
Speaker 4: back up right away.
Speaker 3: Because of course we want to make sure.
Speaker 4: Hospitals are nursing homes which have backup generation.
Speaker 3: But it doesn't last, you know, it's they probably aren't
Speaker 3: going to be able to go three or four or.
Speaker 4: Five days without it. So they got their power back
Speaker 4: on within a few hours. And this is in the
Speaker 4: middle of a wind storm, a wind event.
Speaker 3: That was happening, and that was up in Wyoming.
Speaker 4: But they also just have a different I think, actually, Mandy,
Speaker 4: I think it comes down to this. Elected officials, utilities,
Speaker 4: just people in positions of leadership have had more honest
Speaker 4: conversation with residents of Wyoming than our elected officials than
Speaker 4: our people in positions of leadership have had with Colorado's
Speaker 4: And that is that there's a trade.
Speaker 3: Off, right right, you want the power to stay on.
Speaker 4: We've got a hardened the grid and this is what
Speaker 4: it's going to look like now it may go off,
Speaker 4: and they've also limited the amount of liability that because
Speaker 4: they've made those trade offs, They've they've had that conversation
Speaker 4: and they've made those decisions.
Speaker 3: That means that people are saying, yep, got it. We
Speaker 3: want the power to stay on and we won't. We're
Speaker 3: not going to blame you.
Speaker 4: For absolutely everything if you've done all that you can
Speaker 4: to mitigate it. And so they've had those conversations. You
Speaker 4: don't have those in Colorado.
Speaker 1: To your point, let's talk about that mitigation, because even
Speaker 1: when Excel does try to do certain kinds of mitigation,
Speaker 1: people complain they don't want things cut. It's so ugly
Speaker 1: when you cut all the brush around. So we created
Speaker 1: this dynamic where XCEL absolutely has plausible deniability. In my eyes,
Speaker 1: I said after this, I'm like, you know, I think
Speaker 1: what happened in the Marshall fire was a catastrophic natural disaster.
Speaker 1: It wasn't Excel's negligence that created that problem. You know,
Speaker 1: maybe they could have done something a little bit better,
Speaker 1: but it's not like they have, you know, infrastructure that's
Speaker 1: falling apart. It's infrastructure that could be better, but it's
Speaker 1: not horrible. I don't think they should have been held liable.
Speaker 1: I understand want someone to blame, but if there had
Speaker 1: been a lightning strike, there would have been nobody to sue, right,
Speaker 1: and so in that case, I think XL has plausible deniability.
Speaker 1: But their job is to deliver power. So how can
Speaker 1: you ensure that you are going to deliver power consistently?
Speaker 2: And I don't know if you've seen Gabe Evans.
Speaker 1: Bill that requires energy sources to be reliable for thirty days,
Speaker 1: like continuously, which is going to be a real problem
Speaker 1: for green energy. But let me ask you this about
Speaker 1: the PUC, about the Public Utilities Commission, This current commission
Speaker 1: is completely captured by green energy advocates, right, is there
Speaker 1: anyone on the PUC.
Speaker 3: That's not one hundred percent?
Speaker 4: Now I would say this with this caveat one hundred
Speaker 4: percent because and by the way, two people from Boulder,
Speaker 4: one from from Eagle County, so you have very far
Speaker 4: left counties that are represented. So there's no geographical, you know,
Speaker 4: equal representation. There is no diversity of thought, you know, philosophically.
Speaker 4: The one thing I would say is that I do
Speaker 4: think can we talk about Jake and I talk about
Speaker 4: this on power Gap. We do think that Eric Blank,
Speaker 4: who's the chairman, is starting to see it like he's
Speaker 4: and once you see what the problem is, you.
Speaker 3: Can't unsee it.
Speaker 4: So there are times when I think he's blanking sos because,
Speaker 4: in particular on the clean Heat plan, where we have
Speaker 4: to get rid of all of our natural gas appliances,
Speaker 4: He's like, not sure we can force a utility that
Speaker 4: only provides natural gas service essentially to commit suicide.
Speaker 3: Now those are my words.
Speaker 2: Right right, those are kids.
Speaker 4: But you can see by his questioning that he's starting
Speaker 4: to and he's also when you hear him talk, he's
Speaker 4: super concerned about cost. I mean he says this in
Speaker 4: interviews with other with publications and things like that, cost
Speaker 4: is what he is worried about. I'm worried about cost,
Speaker 4: but I'm also worried one hundred percent about reliability because
Speaker 4: we are going to be able to keep the lights on?
Speaker 2: No, we're not, and you know, if we are.
Speaker 1: One of the things I have liked about Governor Jared
Speaker 1: Poulis is his focus on trying to bring tech to Colorado,
Speaker 1: not just you know, workers, but industry and how in
Speaker 1: the world are we going to be able to track tech,
Speaker 1: you know, data centers, things that require huge amounts of
Speaker 1: power on renewable energy. That's insane. Amy, I have another
Speaker 1: question about that though. Right now, if we were if
Speaker 1: we were at one hundred percent renewables, right, and we're
Speaker 1: in the middle of winter and the wind is it
Speaker 1: blowing and the sun is not shining. We can buy
Speaker 1: energy from surrounding states. But if the green energy advocates
Speaker 1: get that all, if the whole country goes green energy,
Speaker 1: where does the energy come from?
Speaker 2: Where does the power come from?
Speaker 1: I mean, it seems like you would eventually run out
Speaker 1: of places to buy it from.
Speaker 3: Well, so here's what happens.
Speaker 4: Maybe you can buy it from another state, but if
Speaker 4: you're in the middle of a severe weather event, chances
Speaker 4: are its regional. So Wyoming isn't going to send power
Speaker 4: to Colorado if it doesn't have it and it's and
Speaker 4: its residents need it.
Speaker 3: Kansas isn't going to give us power if its residents
Speaker 3: need it. Think about when I seventy is shut, it's
Speaker 3: Kansas are if it's shut them.
Speaker 4: Let's say, you know somewhere in a Rapahoe County to
Speaker 4: the Kansas line. It's also shut from the Kansas line
Speaker 4: to someplace else they need the power. Same thing with
Speaker 4: you know, Arizona or New Mexico or Utah.
Speaker 3: And people have asked me, well, so what do you do?
Speaker 3: And I said, well, get a generator number one, or
Speaker 3: get a couple of them.
Speaker 4: But if I lived near the Utah border, I'd see
Speaker 4: if I could throw an extension quarter over the line
Speaker 4: and see if I could just plug it in, because
Speaker 4: I guarantee you Utah will have power. Utah has is
Speaker 4: really the gold standard of reliable power I think in
Speaker 4: the country. Based on their policy, Colorado is the opposite
Speaker 4: of that, and so we won't we won't have power.
Speaker 4: And we've actually modeled this at AOER. We model cost
Speaker 4: and reliability and based on even the Governor's preferred plan
Speaker 4: that came out of the color Energy Office after twenty forty,
Speaker 4: based on historical weather patterns. Because we look at weather patterns,
Speaker 4: we go back decades and look at weather patterns to
Speaker 4: see what they could look like. There are times when
Speaker 4: Colorado there won't be sun, there won't be wind, and
Speaker 4: we're going to run out of battery backup, and you
Speaker 4: could be out of power for seventy two hours in
Speaker 4: the middle of brutal cold weather.
Speaker 1: Amy, I just asked my assistant chat GPT, the best
Speaker 1: assistant I've ever had to play with you, Yeah, yeah,
Speaker 1: to please tell me what would be required if we
Speaker 1: were on all a renewable energy, what kind of using
Speaker 1: today's battery technology? How many batteries would be required to
Speaker 1: run the Denver Metro for forty eight hours?
Speaker 2: Okay anywhere?
Speaker 1: They said, anywhere between sixty five thousand and eighty five
Speaker 1: thousand giant truck size batteries that would take over three
Speaker 1: acres of just battery, battery, battery, battery. And I just
Speaker 1: think to myself, like, you see how these car fires go.
Speaker 1: Can you imagine a battery backup plantation, which is what
Speaker 1: it would need to be catching on fire? I mean,
Speaker 1: it would be an environmental disaster.
Speaker 2: That would be massive.
Speaker 1: I mean just it would be I just don't think
Speaker 1: people have thought this through all the way.
Speaker 3: And you're putting it into the weather.
Speaker 4: It's not like a battery you keep stored at your
Speaker 4: at your house at seventy degrees a consistent temperature. These
Speaker 4: are batteries that are that are out in the weather.
Speaker 4: And and Mandy, that's just assuming you.
Speaker 3: Could get those batteries right the way.
Speaker 4: The batteries that the Colorado Energy Office is saying they
Speaker 4: want to use these twelve hour batteries, they don't exist.
Speaker 2: Yeah, not for the level that we need to put.
Speaker 4: Yeah, we're putting we're putting our grid into what we're
Speaker 4: relying on technology that doesn't exist.
Speaker 3: That's it. It's nuts.
Speaker 4: And the whole thing about data center, I mean, I
Speaker 4: don't know if you. I'm sure you read it as
Speaker 4: thorough and thoughtful as you are. The I think was
Speaker 4: it the Denver Metro Chamber or somebody who had one
Speaker 4: of these, one of these panels, and there were it
Speaker 4: was all on data centers, and they asked this guy,
Speaker 4: can can you run a data.
Speaker 3: Center on wind and solar and batteries? And he just
Speaker 3: flat he just said, no.
Speaker 2: No, you can't.
Speaker 3: Why that's why. And I was in a I was
Speaker 3: in another.
Speaker 4: I was at a conference listening to a speaker who
Speaker 4: said Excel had been approached by ten data centers.
Speaker 3: Nine of them went to Wyoming.
Speaker 4: WHOA, yeah, so that there are more out there, there
Speaker 4: are more, There are more I heard today. I want
Speaker 4: to say there are five or six out there now,
Speaker 4: but there have been nine that have gone to Wyoming.
Speaker 4: And this, this this forced march to decarbonization net zero
Speaker 4: is it's like a it's like a jobs act for
Speaker 4: Wyoming and Utah, in Kansas and everything else. The point
Speaker 4: is they're going to go where the power is reliable,
Speaker 4: and even if they want it clean, they want you know,
Speaker 4: they want to get as close to decurbanization as possible,
Speaker 4: they still want to have some kind of thermal generation
Speaker 4: backup they needed.
Speaker 1: Did you see that Meta has now contracted with three
Speaker 1: small modular reactor companies. They're planning their next data center
Speaker 1: in New Albany, Ohio, which is right next to my
Speaker 1: husband's hometown. So the next time we go back to
Speaker 1: my husband's home, Dawn, I'm like, we're going to New Albany.
Speaker 1: I'm going to check this out. But they're using small
Speaker 1: They're intending on using small modular reactors, and I think
Speaker 1: that the data center problem will probably be solved with
Speaker 1: small modular reactors. But are those even going to be
Speaker 1: allowed in Colorado? Because of the anti nuclear sentiment that
Speaker 1: exists with the environmentalists here. It's like every time we
Speaker 1: take a step forward, there's somebody to shove us five
Speaker 1: steps back.
Speaker 4: We'd have to change existing law. So Colorado did include
Speaker 4: nuclear as clean.
Speaker 3: But remember in.
Speaker 4: Law it says by twenty fifty Colorado will be one
Speaker 4: hundred percent wind and solar or something renewable. So they
Speaker 4: don't consider nuclear as renewable, so that law has to change.
Speaker 3: Otherwise, why would anybody invest in nuclear?
Speaker 4: Yes, it's clean under Colorado statute, and it's listen and
Speaker 4: it's just clean, let's be honest.
Speaker 3: Yeah, and it's a hundred percent reliable.
Speaker 4: I mean it is a workhourse that when I was
Speaker 4: in North Carolina during a power outage, the one power
Speaker 4: source that was just cranking along was nuclear and ten
Speaker 4: thousand megawatts all the time, twenty four to seven, three
Speaker 4: hundred and sixty five days a year. But Colorado, you
Speaker 4: wouldn't invest in it because by twenty fifty your portfolio
Speaker 4: must change. It must reflect one hundred percent wind, solar,
Speaker 4: and I guess battery. So Colorado has to change its law.
Speaker 2: Good.
Speaker 3: We had a good first step last year, but it's
Speaker 3: got to go further.
Speaker 1: Well, I just got this text message from one of
Speaker 1: our Wyoming listeners, Amy. I'm speaking with Amy Oliver. She's
Speaker 1: with the Independence Institute and the host of power gab
Speaker 1: on IV's YouTube channel. Mandy, we want to thank you
Speaker 1: profusely for all the economic development you are providing us.
Speaker 1: There are currently fifteen data centers in Wyoming, five more
Speaker 1: under construction. So I do have this. Let's see, we
Speaker 1: have a couple of questions. One, Mandy, please ask your
Speaker 1: guests if Xcel's insurance company could possibly be mandating the shutoffs.
Speaker 2: What does that look like?
Speaker 1: Do you know the inside baseball on those machinations within XL.
Speaker 4: I actually don't know that, but I would suspect the
Speaker 4: answer to that would be yes, because Excel's insurance company
Speaker 4: was on the.
Speaker 3: Hook for a good part of that six hundred and
Speaker 3: forty dollars.
Speaker 4: So I am I'm sure that they are saying to Excel,
Speaker 4: you need to mitigate this any way possible. And also,
Speaker 4: you know what it may be too that in the future,
Speaker 4: your property insurance.
Speaker 3: Your homeowner's insurance may.
Speaker 4: Be asking the same thing because they don't want to
Speaker 4: pay for it again.
Speaker 1: Amy Oliver a fantastic guest. I'm telling you guys need
Speaker 1: to watch Power Gap because she goes. She and Jake
Speaker 1: go just as deep, super interesting, different topics every single
Speaker 1: and it's like a half hour. It's like a half
Speaker 1: hour out of your day, and you'll be a million
Speaker 1: times smarter. Amy, Thank you so much, great great column.
Speaker 1: I put it on my blog today. I hope everybody
Speaker 1: reads it. And hopefully we'll talk to again soon.
Speaker 3: Hey, thanks many appreciate it.