The Xcel Energy Efficiency Rebate Program will resume after PUC approved transferring funds from the 2025 budget

Commercial energy efficiency programs that were halted by to close the gap.

In July, Public Service Company of Colorado, an Xcel subsidiary, applied to the Colorado Public Utilities Commission for emergency aid, saying it had spent more than $74 million of its $92.9 million annual budget and was failing to pay commercial expenses Energy efficiency discounts discontinued.

The PUC had approved a residential and commercial real estate demand-side management (DSM) budget of $78 million with a buffer of about 20%. The utility was on track to spend $115.6 million as business programs exceeded target budgets by 144%.

The main drivers were bonuses and rebates for energy-efficient lighting driven by demand from the “indoor agriculture market,” particularly marijuana grow houses.

The shutdown sparked uproar among contractors and suppliers, many of whom are represented by the Energy Efficiency Business Coalition, a trade group. In comments submitted by the coalition, one member stated that more than $120,000 in rebates is pending and is waiting to submit an additional $55,000.

Another coalition member explained that it relies on Xcel Energy’s direct pay programs to cover the company’s operating costs, including the salaries of employees who provide the services covered by those programs.

“Waiting until 2025 for reimbursement payment means waiting approximately 140 days – placing a tremendous financial burden on EEBC members and the DSM industry,” the PUC said in its decision.

An agricultural lighting installer who contacted the Sun said some contractors use short-term loans to complete a project and expect payments to be processed quickly, but they have been caught holding loans while waiting for refunds. The contractor declined to be named because he feared it could damage his relationship with Xcel Energy.

Xcel Energy told the commission that as it resumes its business and energy management programs, it is also conducting an audit of the lighting program to better understand its spending.

The Colorado Energy Office, Southwest Energy Efficiency Program, SWEEP, and the City and County of Denver supported providing additional funds to Xcel Energy.

With funds from next year’s budget, Xcel said in a filing that it is “now positioned to significantly mitigate the over-budget issues identified in the 2024 budget.”

Patricia Rothwell, the business coalition’s executive director, said in an email that her group is “pleased that Xcel Energy resumed nearly all of its electric energy efficiency programs on Oct. 1, including paying rebates so quickly.” as possible for efficiency projects completed during the programs have been paused.”

Program budget vs. annual budget

Despite the stress caused by the closure, the Colorado Office of the Utility Consumer Advocate and PUC staff opposed an increase in DSM’s budget, saying it would reward the company’s mismanagement.

Colorado Energy Consumers, a firm that represents large industrial and commercial customers, also argued that an emergency cash injection would undermine negotiated and approved budget agreements and cost controls.

“In considering the budget request, we must balance two important but somewhat contradictory policy objectives,” the PUC said in its initial decision.

“We recognize that disruptions in rebate administration could unsettle the market and make it difficult to achieve future DSM targets,” the commission said. “However, CEC, staff, UCA and others raise another important point, namely that stakeholders must be able to rely on the finality of the Commission’s decisions.”

The solution, issued in a final order, was to review the budget for the entire three-year energy efficiency plan from 2024 to 2026 — a total of $280 million — and move $34 million to the 2024 budget.

“We note that given our instruction above to maintain payments to suppliers in 2024 and maintain the overall budget agreed in the settlement agreement, the Public Service is likely to exceed its savings target in 2024, but will have a reduced chance of meeting its savings targets in the year 2025 and 2026,” the commission said.

Xcel Energy asked the Commission to reconsider the language to provide more budget flexibility.

“If we bring forward this money from a current year, there is a high probability that there will be a deficit in 2026,” Commissioner Tom Plant said at a meeting in September. “But this now at least gives us a little time to give those involved the opportunity to come together and try to find an amicable solution.”

With its request for reconsideration, Xcel Energy also wants to ensure that its future performance bonuses in 2025 and 2026 will not be affected by the reallocation of funds.

“We are pleased that they have reinstated the incentives in the short term,” Justin Brant, director of the SWEEP utility program, said in an email, “but we definitely still have concerns about deducting funds from future years and “Probably just throw that away down the road.”

Story Type: News

Based on facts either directly observed and verified by the reporter or reported and verified by knowledgeable sources.