Standing Up for You

by Tom Walch, Chief Executive Officer

GRAND JUNCTION, COLO. - (Oct. 9, 2023) 

We’re all familiar with the classic schoolyard bully saga. Big guy picks on smaller kids, going so far as to take their lunch money because he’s stronger. The big guy usually gets away with it, as the principal typically looks the other way or shrugs their shoulders because there’s nothing they can do about it. The little kids might stand up to the big guy. In the movies, the little kids often prevail. But as we all know, real life isn’t usually like the movies.

In the Colorado utility schoolyard, sometimes it feels like Xcel is the big guy pushing around the little kids. And the little kids — retail and wholesale customers — include Grand Valley Power. You know the story: In February 2021, Winter Storm Uri hit. Xcel incurred exorbitant costs because of a historically expensive natural gas market. Even though Colorado’s other wholesale providers managed the market without significant consequences, Xcel couldn’t, and passed along almost all of the exorbitant costs to its customers. In a sense, this amounted to a “lunch money grab” from the little kids that netted Xcel’s shareholders more than $500 million. You, Grand Valley Power consumers, paid about $2.5 million of that.

Your GVP Board and management felt that we had to stand up and challenge Xcel. We joined with Xcel’s other three electric cooperative wholesale customers and engaged Federal Energy Regulatory Commission (FERC) attorneys with expertise in addressing this kind of issue. We knew that it would be a tough fight: the burden of proof is difficult to meet. Our attorneys identified legal precedents and outlined a theory for recovery that, from the wholesale customer view, had reasonable prospects to get some of our consumers’ money back from Xcel. So, we filed a complaint with FERC. Unfortunately, FERC handed down its ruling a few weeks ago and it didn’t go our way. Again, in a situation reminiscent of the schoolyard principal, FERC said it understood our complaint but shrugged its shoulders and focused on the unprecedented nature of the February 2021 gas price spikes. It bought Xcel’s argument that it wasn’t “unduly risky” for Xcel to assume it could make inexpensive purchases on the open market.

Every good parent knows, there comes a time when the little kid must stand up for what’s right, even if it isn’t certain you’ll succeed. Even if the immediate fight is lost, at least the big guy gets the message that it won’t be so easy to roll the little kids the next time. If nothing else, we hope that we accomplished this with our FERC action.

Good parents also know that there are other ways to deal with bullies. It could be as simple as taking a different route to school. That’s what Grand Valley Power has done by terminating its power purchases with Xcel and signing on with Guzman Energy. When the Guzman contract takes effect in 2028, Grand Valley Power, and you our consumers, will be in a much stronger position than we are now.

But what about the kids who lose their lunch money? The enterprising ones that don’t want to go hungry try to find another way to pay for lunch. Grand Valley Power is doing this as well. We have submitted detailed applications seeking federal assistance for energy resource development that could significantly reduce our members’ power costs and boost resiliency. These assistance programs are outgrowths of the Biden Administration’s Inflation Reduction Act. They include the Powering Affordable Clean Energy or PACE program, and the Empowering Rural America (New ERA) program. While highly competitive, the benefit for our members could be substantial. We are putting our best foot forward in applying for these grants.

These days it seems like too many people are following the path of least resistance. Taking a stand isn’t always easy. But sometimes it is the right thing to do. At Grand Valley Power we strive to do the right thing, holding true to our values and principles. Even if this puts us against the big guy, we want everyone to know that we are committed to standing up for our members and doing what is best for them.