Hacked off about your spiraling monthly power bills? Wouldn’t it be nice if you could fire your power company and do business with another one that offers lower rates?

Imagine shopping around for your household’s electricity in the same way you do now for your cellphone or internet service. Making the change could be as easy as going online or making a phone call.

Maybe someday. But for now, at least, the state of Colorado is looking into a more modest version. Cities and other local governments in parts of the state that are served by public utilities Xcel Energy or Black Hills Energy – i.e., much of the Front Range and beyond – would be able to turn to other suppliers for wholesale electricity for their residents. Supporters call it “community choice energy” and say it could lower rates through competition.

As The Gazette reported the other day, a bill approved by the Legislature last year ordered the Colorado Public Utilities Commission to conduct a study of the model. Last week, the commission held a hearing to take public comments on it.

“Community choice energy is just an alternative to the investor-owned energy supply system that we currently have,” state Sen. Kerry Donovan, D-Edwards, who sponsored the 2021 legislation, explained to The Gazette.

“The big goal of a CCE is to lower the cost of energy for consumers by just having greater control of the energy mix.”

Under the proposal, a local government could negotiate for power from any power producer, and the investor-owned utility would be obligated to deliver the electricity using its transmission infrastructure.

Several states including California have comparable programs in place.

The proposal is intriguing if modest. It’s worth noting that it wouldn’t go nearly as far as a more extensively deregulated “retail model” – in effect in Texas and some other states – in which individual electricity consumers could buy power from any producer they choose.

Colorado’s legislation explicitly rejects that approach, contending it “does not promote the stable revenue conditions needed for development of high levels of renewable energy.”

The Democrats who control Colorado’s Legislature not only have hung their hats on renewable energy but also aren’t the most avid fans of a free market for many goods and services. So, it’s no surprise they don’t want to go further down the road of power deregulation.

Colorado Democrats also haven’t proven themselves very business-friendly of late, so it’s no surprise, as well, that the study is aimed only at investor-owned utilities rather than the state’s municipally owned ones, including Colorado Springs’ massive city-owned utility.

Yet, it pays to remember there’s no free market for electricity in Colorado right now as it is. That’s true for the power that comes from private providers such as Xcel, serving places like Denver, and government-run, citizen-owned utilities like in Colorado Springs.

Citizen-owned utilities typically have a board – in Colorado Springs, it’s the City Council – that sets rates and other policies. The Public Utilities Commission sets rates for the investor-owned utilities.

In either case, the utilities function as monopolies and are insulated from competition. Ratepayers can protest the rates, but it typically does as much good as complaining about the hand you’re dealt in a poker game.

The public utility’s staff always seems ready to back up its case for a rate hike with lots of spreadsheets and complicated accounting. In the absence of competition in the marketplace, the spreadsheets and accounting usually win.

In that light, community choice energy seems worth further exploration.

Denver Gazette Editorial Board