Holy Cross Energy’s proposed new rate structure is drawing questions and criticism

Holy Cross Energy is planning for the future. Rich Clubine, owner of Active Energies, wonders what is to come of that future.

Active Energies is a solar energy sales and installation company based in EagleVail. Since he bought the business in 2017, Active Energies’ business has boomed. The business now has 31 full-time employees on staff, and hires any number of seasonal workers.

Clubine is worried that a proposed new rate structure from Holy Cross Energy could, at best, seriously hamper the future of his company. He’s worried enough that he recently sent a letter to hundreds of Active customers, urging them to learn about, and comment on, the new plan.

Holy Cross CEO Bryan Hannegan said the proposed new billing structure separates the utility’s various costs and charges.

Hannegan noted that at the utility’s current rate — about 10.5 cents per kilowatt-hour — only about 3.5 cents pays for the electricity. The rest goes to operate and maintain the utility’s grid, including the cost of paying personnel.

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Hannegan said “looking to the future,” Holy Cross needs to recover its costs for operating the grid. Potential changes to building codes in Eagle and Pitkin counties are likely to require more rooftop solar panels.

With that in mind, “It’s not so obvious (customers) will always be buying energy from us,” Hannegan said.

Mike Kruger is the president and CEO of the Colorado Solar and Storage Association, the group that represents and lobbies for the solar industry.

“Holy Cross is solving for a problem that’s a decade off,” Kruger said, adding that the proposed solution would hurt the industry.

Given Holy Cross’s history of working with the solar industry — as well as its drive to get 100% of its power from renewable sources by 2030 — Kruger said other utilities in the state are keeping a close eye on what the utility provider is doing.

Clubine said the Holy Cross proposal will make solar energy a far less attractive proposition.

In the letter sent to customers, Clubine wrote that the new rate system will greatly extend the return on investment for solar users without accompanying battery systems. The letter states there’s currently an 8 to 10-year payback on a system. That payback period would rise to 21 to 22 years under the new structure.

Clubine’s letter used his own EagleVail townhome as an example of what will happen to rates for customers who have solar energy systems. The letter states that Clubine’s home utility bill is now about $153 per year. That bill would rise to $950 per year until the new rate structure.

Hannegan acknowledged that the new structure “affects the value proposition for solar,” but added that Holy Cross is “collaborating” with Active Energies, other companies and customers to work on possible alterations to the rate structure. That’s why the changes were announced March 1, and the comment period stretched to April 30. The final rate structure will take effect in September.

Clubine is urging his clients to share their thoughts with the Holy Cross board of directors.

“Membership has power,” Clubine said, adding that a similar proposal was floated in 2022 by a utility in southern Colorado. That proposal drew an “outpouring” of opposition and the proposal was retracted.

“Holy Cross is trying to get people to change their behavior,” Clubine said. “We’re open to being part of it … (the rate structure) isn’t set in stone.”