The Colorado Public Utilities Commission will review the decision of an administrative law judge that recommended Xcel Energy be allowed to collect $44.5 million from all Colorado customers to pay for its smart-grid project in Boulder.

The judge's recommended decision would have become final Wednesday, but three parties filed "exceptions" to the decision, which challenged Administrative Law Judge G. Harris Adams' conclusions. Those filings force the commissioners to make the final decision.

"There is now a two-week period for responses to those exceptions," PUC spokesman Terry Bote said. "Once that period is over, the commission will schedule deliberation at a future weekly meeting."

Bote said that deliberation will likely happen sometime in December.

In 2008, Xcel announced plans to test the potential of smart-grid technologies by building a large-scale demonstration project in Boulder. Originally, Xcel estimated that the "SmartGridCity" would cost the utility about $15.3 million. But costs ballooned, and Xcel now estimates the project will cost the company about $45 million.

In 2009, Xcel asked the Public Utilities Commission, which regulates state utilities, for permission to recoup its costs from ratepayers, arguing that the lessons learned from the smart grid will ultimately benefit all customers. The PUC granted Xcel permission to raise its rates, but also ruled that Xcel must apply, retroactively, for a Certificate of Public Convenience and Necessity. If the certificate were denied, Xcel would be forced to refund customers for any part of their rates that went to smart-grid costs.


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Such certificates must typically be obtained before a utility begins construction on a large project -- such as a new power plant or transmission lines -- that ratepayers will foot the bill for. The certificate is supposed to ensure that the proposed project is both needed and prudent.

Xcel applied for a Certificate of Public Convenience and Necessity in April, and in August, three of the parties to the case -- Xcel, the Governor's Energy Office and the staff at the PUC -- filed a settlement with the commission. All three parties agreed that Xcel should be awarded the certificate and that Xcel's cost recovery should be capped at $44.5 million.

In late October, after the PUC held a hearing, Judge Adams issued a recommended decision agreeing with the settlement. But this week, three parties not included in the settlement -- the Colorado Office of Consumer Counsel, Climax Molybdenum, and Boulder resident Leslie Glustrom -- filed "exceptions" to the judge's recommendation, which kicks the final decision back into the hands of the commissioners.

The Office of Consumer Counsel, which is tasked with representing the ratepayers' interests, argued in its filing this week that Xcel should receive a Certificate of Convenience and Necessity but that cost-recovery should be capped at the level Xcel anticipated paying before the project started, when the certificate would normally have been applied for.

"The cost cap agreed to by the settling parties is too high," said the filing, which was signed by Attorney General John Suthers, "much higher than what the company would have originally proposed if the application had been timely filed."

Glustrom argued that the PUC should deny Xcel a Certificate of Convenience and Public Necessity altogether.

"The record contains abundant information that the SmartGridCity project was not prudent at the time of its planning and implementation," she wrote. "And that Xcel's Colorado ratepayers should not be responsible for paying the costs for this poorly conceived, planned and implemented project."

Contact Camera Staff Writer Laura Snider at 303-473-1327 or sniderl@dailycamera.com.