BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO * * * * * VERIFIED APPLICATION OF PUBLIC SERVICE COMPANY OF COLORADO FOR INTRODUCTION

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO * * * * * IN THE MATTER OF THE APPLICATION OF PUBLIC SERVICE COMPANY OF COLORADO FOR APPROVAL OF ITS SOLAR*CONNECT PROGRAM ) ) ) PROCEEDING NO. 16A- E ) ) VERIFIED APPLICATION OF PUBLIC SERVICE COMPANY OF COLORADO FOR APPROVAL OF ITS SOLAR*CONNECT PROGRAM INTRODUCTION Public Service Company of Colorado ( Public Service or the Company ), pursuant to Commission Rules 4 CCR (a)(II), 4 CCR , hereby applies to the Commission for approval of Solar*Connect ( SC ), a new voluntary solar program the Company would like to offer to our retail customers. The proposed regulated program will offer participating customers the ability to offset their current supply of energy from the Public Service system with solar energy produced at a dedicated facility or facilities. The Company has included with this Application a direct case consisting of the Direct Testimonies and Attachments of Alice K. Jackson, Kevin Schwain, Steven W. Wishart, and James F. Hill. Through their testimonies, these witnesses support different aspects of this Application and present the details concerning the features of the Solar*Connect Program, including the accounting, the acquisition of a new solar resource, the modeling, the bill credit offered, the tariff supporting the program, and the market potential for customer interest in the program. Ms.

2 Jackson is the policy witness who provides an overview of the Company s proposal in this proceeding. The Company is asking for the authority to offer solar subscriptions to customers who wish to support solar energy that will be generated from a new large solar photovoltaic ("PV") generation facility or facilities (up to 50 MW in size). The Company will purchase the new solar energy through one or more power purchase agreements ( PPA(s) ) resulting from competitive bids through a competitive solicitation or request for proposals ( RFP ) process. This solar product will be offered in addition to the two other solar products currently offered by the Company through third party vendors, our Solar*Rewards and Solar*Rewards Community (solar gardens) programs. In early 2014 the Company filed a Solar*Connect program proposal with the Commission. Expressing concern with the structure and other aspects of this program, the Commission denied the Company s application. We have taken the past year to reshape the program and address the concerns raised by the Commission s order, as well as the other stakeholders that intervened or participated in that proceeding. This present proceeding presents the updated and what we believe to be an improved version of Solar*Connect. The updated Solar*Connect provides a voluntary solar program for our customers that has been designed to minimize if not eliminate subsidies from non-participating customers. The Company simultaneously filed in this proceeding a request for approval to concurrently offer and process an RFP to acquire the energy and capacity associated with a new solar resource up to 50 MW in size through a PPA. Public Service is seeking 2

3 through a concurrently filed motion for Commission authorization to release of the RFP while this Application is pending in order to have indicative program cost numbers available before the end of this proceeding. We will be explicit in the RFP to indicate that we will not actually contract for resources until the Commission approves this application. Under the Solar*Connect program, our customers will have the option to obtain their energy from this solar resource pursuant to terms and conditions set out in a fully regulated tariff, which is included as Attachment SWW-1 to Mr. Steve Wishart s Direct Testimony and which we may only update on an annual basis. The term of a customer s election may be (1) month-to-month; (2) five years; or, (3) ten years. The prices for the various contract year terms will be set forth on the Company s website and may change no more frequently than annually through an advice letter filing. Customers will be able to lock-in their contract price and contract year term at the time of subscription. The price that a customer will pay for this resource is directly tied to the pricing in the PPA that the Company will enter into through the RFP process, which will be reflected in the tariff. This will necessitate that we revise our proposed tariff through a compliance filing once the PPA pricing is known. The bill credit that the customer will receive is dependent on the price for On Peak energy, the customer s elected term of service, and approval of the proposed capacity credit that the Company is presenting. Once again this bill credit will be included in the annually updated tariff for the program. Customers who subscribe to Solar*Connect will pay a SC charge for their solar 3

4 energy and in turn the Solar*Connect customer will receive a bill credit commensurate with the on peak ECA plus a capacity credit. Customers who subscribe to Solar*Connect could see higher utility bills to the extent that their locked-in Solar*Connect charge exceeds the Solar*Connect bill credit; conversely, customers could see lower utility bills over time if the locked-in Solar*Connect charge becomes lower than the Solar*Connect credit. The total revenues in comparison to total expenses of the program will be reported to the Commission and in the event total annual revenues exceed total expenses by more than ten percent, the Company proposes to return any amounts above ten percent to the participants in the program. In the event that energy generated from the solar resource contracted through the PPA exceeds the amount of energy consumed by program participants, Public Service proposes to sink the excess energy to the system and be compensated for that energy at the on peak energy plus an incremental capacity credit for the avoided capacity that the resource provides to the system. Overall, the Company believes that the Solar*Connect program broadens the opportunities for participation in a voluntary renewable program to a greater number of customers, at a reasonable cost, and in a way that does not impact non-participating customers. Public Service anticipates that this new solar program, if approved by the Commission, will be available for customers in early In this regard, the Company has conducted outreach and performed multiple studies that support the conclusion that there is strong customer interest in a program like Solar*Connect. Customers who opt for this program will be able to subscribe for 4

5 solar energy to displace a certain amount of kilowatt hours of their electric usage annually. The customer feedback in our studies demonstrate that Public Service s customers have been asking for more options in how their electricity is sourced and many customers are looking for more renewable energy and to reduce their carbon footprints. Public Service is proposing this new solar program to respond to these customer desires. Solar*Connect will allow more of our customers to participate in our solar programs. Many customers do not own property that can accommodate on-site solar facilities, and many do not live in areas where solar garden subscriptions are available. Many customers do not have the ability to make large up-front investments in solar energy; others do not want to commit to solar energy for the long-term. Solar*Connect addresses these problems by providing an optional, short-term solar energy solution to a broad spectrum of our retail customers. Public Service will assume certain risks as part of offering this program. In return, Public Service likewise should have an opportunity to retain a limited amount of excess revenues. To ensure that the Company does not earn excessive profits through this program, the Company proposes to cap the annual revenues of the program to ten percent above the annual program costs. After each calendar year in the Company s Renewable Energy Standard ( RES ) Compliance Report, the Company will include details of the Solar*Connect costs and revenues from the previous year. If the revenues collected exceed program costs by ten percent or more, the excess revenues will be credited back to participants through the 5

6 subsequent year s Solar*Connect credit. The Company is proposing that the Solar*Connect program will not be subsidized by the Renewable Energy Standard Adjustment ( RESA ), and is designed to insulate non-participants from any cost impacts of the program. As such, there is not a RESA impact of the proposed Solar*Connect program. To obtain solar energy for Solar*Connect, we are filing a concurrent Motion with this Application asking the Commission for authorization to issue a targeted RFP for the construction of up to 50 MW of solar facilities for this program. In summary, by this Application and adjoining Motion, the Company requests that the Commission approve the Solar*Connect program and make the following specific findings and determinations: 1. Public Service offering our retail customers a voluntary Solar*Connect product under the terms and conditions set forth in the tariff provisions proposed by Mr. Wishart. 2. We request the Commission issue an interim Decision allowing the release of a targeted RFP for a new solar resource early in the proceeding, subject to the condition that Public Service will not enter into a PPA until the Commission approves the Company s Solar*Connect application. 3. Authorize the annual update of the SC Charge and Bill Credit; 4. Authorize the recovery of unsubscribed energy at the on peak ECA with the incremental capacity credit tracked through the ECA and associated ECA tariff changes; 5. Authorize the Company to retain excess program revenues on an annual basis not to exceed 10% of program costs; and 6. Authorize the inclusion in the annual RES Plan Reports any Solar*Connect reporting. 7. Authorize it to acquire, from one or more of the respondents to the RFP, up to 50 MW of energy and capacity associated with one or more newly-constructed of solar facilities. The proposed targeted competitive solicitation would result in the construction of one or more new PV generation facilities totaling up to 50 MW 6

7 (AC). To the extent necessary, the Company requests a waiver of Commission Rule regarding acquiring resources outside of the electric resource planning process under the Commission s ERP Rules, 4 CFR 3600, et seq. By approving these requests, the Commission will be granting Public Service the authority to bring solar energy, on a voluntary basis, to a broader spectrum of our customers, requiring no RESA support. We are in an environment where our customers want more choices regarding the sources of their energy. Our Solar*Connect program will provide them an excellent option for achieving their individual goals while minimizing the impact to our remaining non-participating customers. INFORMATION REQUIRED BY RULE 3002 (b) AND (c) 1. Name and Address of Applicant. The Applicant is Public Service Company of Colorado. Public Service s principal office is located at 1800 Larimer Street, Suite 1400, Denver, Colorado Name Under Which Applicant will Provide Service in Colorado. All operations conducted by the Company in Colorado shall be conducted under the name of Public Service Company of Colorado d/b/a Xcel Energy. 3. Representatives to Whom Inquiries Concerning the Application Should be Made. Copies of all notices, other correspondence, and all inquiries concerning this Application should be sent to: Robin Kittel Director, Regulatory and Strategic Analysis Xcel Energy Services Inc Larimer Street, Suite 1400 Denver, Colorado Telephone: (303) robin.kittel@xcelenergy.com 7

8 and Joani Mauro Regulatory Administrator Xcel Energy Services Inc Larimer Street, Suite 1400 Denver, Colorado Telephone: (303) and William M. Dudley Lead Assistant General Counsel Xcel Energy Services Inc Larimer Street, Suite 1100 Denver, Colorado Telephone: (303) Agreement to Comply with Rules 3002(b)(IV)-(VI). Public Service has read, and agrees to abide by, the provisions of Rules 3002(b)(IV)-(VI), 4 Code Colo. Regs Description of Existing Operations and General Colorado Service Area. Public Service provides electric and gas public utility service in numerous areas throughout the State of Colorado. The Company also provides steam utility service within the downtown area of Denver. A full listing of Public Service s existing operations and service area is set forth in Public Service s tariffs on file with the Commission. 6. Location of Hearing. The Company seeks a ruling on this application without hearing. However, if a hearing is held on this Application, Public Service prefers that the hearing be held at the Commission s offices in Denver, Colorado. 7. Acknowledgment. Public Service has read and agrees to abide by the 8

9 provisions of Rules 3002(b)(Xl)(A)-(C), 4 Code Colo. Regs Statement Under Oath. Ms. Alice K. Jackson, Regional Vice President of Rates and Regulatory Affairs, states under penalty of perjury that the contents of the Application are true, accurate, and correct to the best of her knowledge. Her affidavit is attached to this Application. 9. Information Required by Rule 3002(c). Public Service hereby incorporates by reference the following information, which is on file with the Commission in Docket No. 06M-525EG: a. A copy of Public Service s Amended Articles of Incorporation, which was last filed on October 3, 2006; b. The name, business address and title of each of Public Service s officers and directors, which was last filed on March 26, 2015; c. The names and addresses of affiliated companies that conduct business with Public Service, which was last filed on March 26, 2015; d. The name and address of Public Service s agent for service of process, which was last filed on October 3, e. A copy of Public Service s most recent audited balance sheet, income statement, statement of retained earnings and statement of cash flows was last filed on March 26,

10 Dated this 27 day of January, Respectfully submitted, s/ William M. Dudley William M. Dudley, #26735 Assistant General Counsel - Lead Christopher M. Irby, #35778 Assistant General Counsel Xcel Energy Services Inc Larimer Street, Suite 1100 Denver, Colorado Telephone: Dudley: (303) Irby: (303) Fax: (303) Dudley : bill.dudley@xcelenergy.com Irby : christopher.m.irby@xcelenergy.com Andrew Crain, #29659 ARMSTRONG TEASDALE, LLP 4643 S. Ulster St., Suite 800 Denver, CO Fax: acrain@armstrongteasdale.com ATTORNEYS FOR PUBLIC SERVICE COMPANY OF COLORADO 10

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