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Pueblo and Xcel Energy’s Colorado Energy Plan:

Economic Development, or a Job-Killer?

Xcel Energy’s plan includes the closure of two of Colorado’s highest-performing, lowest-cost power plants,
costing Pueblo dozens of high-quality jobs.
 Employees at the Comanche I and II Power Stations can earn up to $100,000 per year. These are
well-paying jobs in Pueblo, where the average salary is roughly $20,000 less than the statewide
average. 1
 80 of these high-quality jobs will be lost if the Colorado Public Utilities Commission passes the
Colorado Energy Plan Portfolio (CEPP). 2

Xcel claims that its proposal will lead to economic development in Pueblo, leaning heavily on a single, self-
commissioned study that outside experts and Public Utilities Commission staff have found dubious.
 Xcel commissioned a report from the University of Colorado Leeds School of Business in order to
bolster their claims, which Leeds conducted under the following assumptions:
o “PSCo provided data that included capital expenditures, operating expenditures, revenue
requirements, and taxes for each scenario, consistent with the final Preferred Electric Resource
Plan and Preferred Colorado Energy Plan as presented in the June 6, 2018 120-Day report. The
research team worked under the assumption that the company provided good-faith estimates
for each scenario.”3

The Leeds research team worked under a false assumption, as various groups have pointed out that Xcel
Energy’s numbers are flawed and biased, rendering the entire study suspect.
 According to the Intermountain Rural Electric Association (IREA), “…the Company introduced flaws
and biases into the 120-Day Report that undermine the report’s fundamental reliability.” 4
 The Coalition of Ratepayers shared in IREA’s position: “PSCo’s accounting has been riddled with
biased assumptions, errors, and changes that are completely self-serving and call into question the

Colorado Public Radio, Coal-Fired Past or Green-Powered Future? Pueblo Looks for a New Economic Leg Up (July 30, 2018)
The Pueblo Chieftain, Xcel touts spending plans (June 28, 2018)
Leeds School of Business, Economic Impacts of the Preferred Colorado Energy Plan (June 20, 2018)
Intermountain Rural Electric Association, Comments on Public Service Company of Colorado’s 120-Day Report, Proceeding
No. 16A-0396E (July 23, 2018)
The Coalition of Ratepayers, Statement of Position, Proceeding No. 17A-0797E (August 14, 2018)
Colorado Public Utilities Commission, Staff’s Comments on PSCO’s 2018 120-Day Report, Proceeding No. 16A-0396E (July
23, 2018)
International Brotherhood of Electrical Workers, Local #111, Comments on 120-Day Report, Docket No. 16A-0396E (July
Company’s credibility on numerous claims. Simply put, PSCo’s numbers are not trustworthy or
accurate.” 5

After examining the Xcel-commissioned Leeds study, Colorado Public Utilities Commission Staff
provided comments questioning the reliability of the study because it’s based on Xcel’s numbers that aren’t
trustworthy in the first place.6:
 Page 3: “… [PUC] Staff is unable to conclude that the Preferred CEPP is more likely than not to
produce savings. The modeling results presented by the Company contain a number of errors and a
fundamental flaw, which are discussed below, that render the results suspect.”
 Pages 44-46: “Economic studies of this type are determined largely by the quality of the inputs and
assumptions, with particular importance placed on the magnitude of the multipliers and the
methodology used to apply them. The Leeds report is not transparent, and the Company did not
provide sufficient additional support to allow Staff to determine the quality of the results. Even an
input as simple as the discount rate is unclear. The report simply stats that the ‘impacts are
presented in fixed, 2018 dollars and discounted by the model using industry price deflators.’ Staff is
left to observe that, at the least, the base year of 2018 in inconsistent with the 120-Day Report, as is
the time horizon of the study, and the discount rate is simply unknown.”
 “The Leeds analysis was dependent on data provided by Public Service, including capital
expenditures, operating expenditures, revenue requirements and taxes for each scenario. As the
Leeds Study notes, ‘the research team worked under the assumption that the company provided
good-faith estimates for each scenario.’ The Company provided no written explanation and support
for the model inputs provided to Leeds, indicating that explanation and support around these data
was provided to Leeds by teleconference. Thus, Staff could not evaluate these forecasts.”
 “That said, there are a few input numbers referenced in the report that Staff did attempt to verify.
For example, the report refers to a total reduction in revenue requirement of $431.5 Million. This is
included in the economic benefits calculus as a benefit to customers through lower utility bills.
However, Staff has no idea how this estimate of the change in revenue requirements is derived.
PSCo's 120-Day Report consistently refers to the difference in revenue requirements between the
Preferred CEPP and Preferred ERP as $213 Million, and Staff believes even that estimate is overly
optimistic. In addition, the Leeds Report evaluation period is only 23 years, through 2040, as
opposed to the ERP evaluation period through 2054. Using PSCo's estimate of the revenue
requirement differences through 2040 yields a total CEPP savings estimate of $71 Million, a far cry
from $431 Million.”
 “The Leeds Report explains that the $431.5 Million in revenue reduction is ‘mostly due to the net
decrease of $970 million in lower fuel costs...’ Again, Staff is unable to verify this amount of fuel
savings. As shown in Figure A3 of Appendix A of this response, Staff estimates that the fuel savings
from Company generation in the CEPP is a total of $373 Million. The source of an additional $597
Million in fuel savings is unclear.”
 “In addition to these large questions surrounding the veracity of the model inputs, the model used
for analysis by Leeds is provided by an outside consultant (REMI) and is the proverbial ‘black box,’
preventing Staff from evaluating the methodology or inputs. When Staff requested support for the
model, the Company did not provide population or other forecasts used to calibrate the REMI
model, saying that Public Service ‘does not have access to such data from REMI.’ The Company also
stated that there was no documentation or support provided by REMI.”
 “Staff concludes that the Preferred CEPP may result in a positive economic impact for Pueblo County
in the same way that economic activity is generated if a building is destroyed and rebuilt. The
decision about whether a building should be destroyed and rebuilt should be made based on the
value of that project, not the economic impact of an exercise that will utilize dollars that could be
used for another possibly more beneficial purpose. The magnitude of the economic impact provided
in the Leeds report is impossible for Staff to validate, but is likely much smaller than the estimate
provided by Leeds.”

The International Brotherhood of Electrical Workers, Local #111 provided their own comments to the
Commission, expressing similar skepticism as Commission Staff7:
 Page 3: “Nor is there any real information that would allow the Commission to evaluate the impact
of the bidders’ employment policies on the long-term viability of Colorado’s communities.”
 “There are 80-90 well-paid Local 111 bargaining unit jobs that will be lost from the Comanche plant
under either version of the CEPP. Many of the individuals holding those jobs will be lost to the
Pueblo community. While PSCo offers broad assurances that it will work with the Local to address
these issues, it offers not a single specific proposal.”
 “Colorado’s median household income for 2012 - 2016 was $62,520. $20/hour for full time work
would represent an income of $21,600. What does that income do for, or to, the long- term
economic viability of the community?”
 Page 4: “Three of the preferred CEPP bids are from a single company that assures us that its salaries
are ‘competitive in the industry and commensurate with experience,’ with ‘a Competitive Benefits
Package.’ (‘Competitive’ and ‘commensurate with experience’ are scarcely even ordinal descriptors
in a situation that demands cardinal numbers – What salaries and what benefits are ‘competitive’ or
‘commensurate with experience’? Minimum wage? $25/hour? $50? Do the ‘competitive’ health
benefits more closely resemble an ACA Exchange bronze plan, or a gold? What is the employer-
match structure of its 401(k) plan?) We are also assured that the small number of projected
operations and maintenance employees will ‘have the opportunity to establish a career with [the
Employer], which offers competitive salaries, full benefits packages that includes medical, dental
and vision insurance, 401K and pension retirement plans, and paid vacation and holidays,’ but
without any specific information about what this employer views as a ‘competitive’ salary and the
nature of the actual benefit designs within those ‘full benefits packages,’ we are confronted with the
functional equivalent of an assurance that the bidder’s check is in the mail. (And of what does ‘the
opportunity’ consist? Is there specific training for specific jobs? How many openings for long-term
jobs are in the communities where plants will be built are anticipated?) The economic impact of the
Preferred CEPP’s proposed dispersed energy generation development rests in great measure on
actual numbers – how much money will flow to employees; how many jobs will be gained (or lost) in
local communities? Generalizations about ‘opportunities’ for ‘competitive’ salaries and ‘full’ benefits
omit that information.”
 Page 5: “One preferred CEPP bidder will ‘work closely’ to maximize its ‘enormous’ employment
benefits (which it defines as five full-time jobs once construction is complete, representing a
peculiar definition of ‘enormous’.)”
 Page 6: “Both quantitative and qualitative impacts should be taken into account: as important as the
number of jobs created in a specific area is their continuity. This depends on, both, the stage of the
renewable energy project and the type of renewable technology considered. For example,
employment creation and income generation during the construction stage is significant, but
generally temporary. In contrast, local employment creation in the O&M stage is more permanent
but modest, particularly in the case of wind farms.”
 “Even if PSCo avoids laying off individuals, the larger impact on the community is undisputable.
There were 26 full-time bargaining unit employees at the Cameo Station in 2004 and none there
now. Whatever the current employment status of those 26 individuals, Palisade lost those well-
paid jobs.”
 Page 12: “If 25-year projections were considered reliable, new ERPs would only need to be made
every 25 years.”
 Pages 17-18: “The Executive Summary [Leeds] further states at p. 2 that ‘Real GDP increases by an
average of $57.8 million during the study period and an increase of $48.2 million in disposable
personal income when including the dynamic economic impact on the economy.’”
 “These numbers have the same problems that the employment numbers do in terms of the timeline
of the reported increases, including the heavily front-loaded benefits during the construction-boom
portion of the CEPP. Indeed, it is notable that the GDP number actually turns negative in the last 11
years of the forecast for the state although, again without adequate explanation, increases
dramatically for Pueblo in the last three years (or four, based on Figure 8). Take away the Year 1-5
and Year 21-23 GDP bumps in Pueblo, and the CEPP has a negative GDP impact (-$1.6 million during
those middle 15 years.) If Pueblo is going to experience a negative GDP impact for 15 years under
the CEPP as compared to the ERP, this requires more explanation than attributing it to a ‘change in