Mergers and the Public Interest: Saving the Savings for the Poorest Customers

 

How Colorado's settlement in the Xcel merger builds a case for treating needy ratepayers as a separate class entitled to merger benefits.

Low-income consumer interests frequently get lost in the shuffle when utilities merge. Believing that the needs of low-income consumers are neither caused nor exacerbated by the merger itself, the companies and the regulators who oversee them instead focus on traditional merger-related issues such as market power, the ratemaking implications of acquisition costs, and the extent to which merger-related efficiencies should be shared between investors and ratepayers.

Not so in Colorado's recent consideration of the proposed Xcel Energy merger that would combine New Century Energies - and its operating subsidiary Public Service Company of Colorado (PSCO) - with Northern States Power Co. (NSP). In February, the Colorado Public Utilities Commission (PUC) approved a groundbreaking settlement between PSCO and a low-income advocacy alliance of Catholic Charities of Metropolitan Denver (CC) and the Colorado Energy Assistance Foundation (CEAF). The settlement addressed a host of low-income issues.