Xcel overbilled for wind plan; Company balks at PUC suggestion to refund more than $1.5 million to program's funders

Xcel Energy overcollected more than $1.5 million from customers who voluntarily pay a premium for wind- generated electricity, according to the Colorado Public Utilities Commission staff.

From 2005 to 2007, the state's largest utility sold credits for more green power than it generated at the wind farms in its Windsource program.

Xcel knew it would have a production shortfall in the program but "failed to act," PUC rate and financial analyst Harry Di Domenico testified as part of an ongoing case related to Windsource.

As such, the PUC staff has recommended that Xcel refund to Windsource subscribers nearly $1.6 million, which includes $57,000 in interest.

The program has 46,800 subscribers, said Xcel spokesman Joe Fuentes.

Xcel contends that it should not have to refund the money because it has generated more than enough wind power to meet the credits sold. However, some of that wind power is not part of the Windsource portfolio of resources.

When regulators approved the launch of Windsource in 1997, Xcel agreed to keep the program separate from the rest of its business operations, Di Domenico said.

The additional wind power Xcel has produced is part of the company's efforts to meet Colorado's Renewable Energy Standard, which requires regulated utilities to generate 20 percent of their power from renewable energy sources by 2020. That mandate came from Amendment 37, which was approved by voters in 2004 and later amended by the state legislature.

Xcel said it is ahead of schedule in meeting the standard and has proposed to offset the Windsource overcollection with that excess wind power.

PUC spokesman Terry Bote said a settlement is expected to be filed by mid-January.

He wouldn't disclose details.

Di Domenico said in his testimony he couldn't calculate how much, if any, Xcel overcollected this year because of incomplete data.

Windsource customers who pay for 100 percent wind-generated power pay roughly $10 more per month than typical customers. Subscribers, however, don't necessarily receive wind- generated power. In reality, they are contributing financially to make wind energy a bigger part of Xcel's power generation.

The looming settlement stems from Xcel's attempt to combine the Windsource program with the rest of its renewable-energy portfolio.

Xcel made the request in June, stating that the move would allow it to purchase wind power at better rates for the Windsource program.