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Energy

February storm eats up much of Cripple Creek schools’ energy budget for an entire year

A five-figure shocker has the tiny mountain district asking if anybody can help while they try to figure out where to cut.

Cripple Creek-Victor School District finance manager Tammy Bruntz stands in a hallway at the Junior / Senior-High School Tuesday, April 13, 2021. Bruntz expected the school district's February energy bill to be about $6,500 but the bill the district received from Wolf Creek Energy was $45,000. (Mark Reis, Special to the Colorado Sun)
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Tammy Bruntz had a sum in mind just before she opened her monthly email from Wolf Creek Energy detailing the February energy bill for her Cripple Creek-Victor School District. 

The figure in her head was about $6,500, a typical midwinter bill for the district in the mountains west of Colorado Springs, and roughly what Bruntz, the district finance manager, had paid in January. 

So when she clicked on the email and saw the bottom line — $45,000 for February — she yelled for her assistant and asked if somebody had read the meter wrong. 

They hadn’t.  

The February storm whose financial whirlwind continues to cut broader and broader swaths through the Southwest had finally arrived in Cripple Creek, population 1,021. The schools’ gas supplier was passing on costs from an enormous spike in natural gas costs, blowing away three-quarters of the district’s entire annual energy budget in just one month. 

The entire annual budget to run CC-V Schools is about $5 million. 

“I had a little heart attack,” said Bruntz, who was suddenly learning the fine print of an energy contract signed with Wolf Creek Energy, a subsidiary of Summit Utilities, long before she arrived at the school district. 

The shock was all the deeper because February in Teller County was warmer than January, Bruntz said. And CC-V’s supplier never managed to warn customers that gridlocked energy grid a thousand miles away would spike gas prices and translate to bewildering charges for Coloradans.

When Bruntz finally found someone at Wolf Creek Energy and asked why the school had no warning, they said “they forgot to send their Colorado customers the notification,” she said.

They forgot?

“They forgot. That’s what we were told,” Bruntz said. 

Just how badly the Texas-centered February freeze messed with the financial lives of some Coloradans becomes clearer every week, as energy customers ranging from rural homeowners to ski areas to nonprofits and government agencies learn more than they ever wanted to about commodity costs.

While storm-surge pricing for customers of big, shareholder-owned utilities including Xcel and Black Hills Energy are on hold as state regulators investigate, customers with other kinds of power contracts get no reprieve.

Bruntz and people in positions like hers have asked the state Office of Consumer Counsel for advice. The OCC doesn’t directly control rates, but can advocate on behalf of individual and institutional customers in rate increases and investigations by the Public Utilities Commission. 

The Cripple Creek-Victor School District offices are in the district’s Junior / Senior-High School. The district’s finance manager, Tammy Bruntz, expected the school district’s February energy bill to be about $6,500 but the bill the district received from Wolf Creek Energy was $45,000. (Mark Reis, Special to The Colorado Sun)

But buyers like Cripple Creek’s schools aren’t protected by the PUC because they chose to purchase power from distributors, like Wolf Creek, which are overseen by the Federal Energy Regulatory Commission, the OCC said. 

Colorado is moving fast toward renewables and a consumer-responsive energy market, “but we are really not as a state keeping up with issues of governance,” said Joseph Pereira, deputy director of the OCC. “We’re not really keeping up with issues of customer protection.”

Though Bruntz is new enough to CC-V that she’s not sure how the current energy contract was negotiated, the OCC said such arrangements often come about when deregulation allows utilities to compete for business. A distributor will tell a customer they can save money up front, but the customer isn’t steeped in utility fine print or used to negotiating complex contracts.

“The state has basically decided this is far too risky for residential customers,” Pereira said, but for commercial and industrial customers, lawmakers assume “these are savvy entities and they should be able to play the market to their advantage. The truth of the matter is, Cripple Creek-Victor School District is in no position to understand the play, the energy market.”

CC-V’s bill comes from Wolf Creek Energy. Wolf Creek is a sister company of Colorado Natural Gas. Wolf Creek and Colorado Natural Gas are owned by Summit Utilities, based in Centennial. Summit Utilities is one of many utilities and generators owned by the JPMorgan & Chase-created Infrastructure Investments Fund. That fund is advised by asset managers at JPMorgan & Chase, which reported $120 billion in revenue from $3.4 trillion in assets in 2020. 

In an emailed statement, Summit Utilities spokesperson Lizzie Reinholt said its subsidiary Wolf Creek Energy buys gas on behalf of the school district. 

“Unfortunately, unusually cold temperatures in February caused by Winter Storm Uri drove up gas prices to unprecedented levels across much of the United States,” the statement said. “For customers that have their gas purchased on the spot market, like Cripple Creek & Victor School District, that caused unusually high bills this month. We have been in contact with Cripple Creek & Victor School District to discuss billing support and are always happy to work with customers on payment options given the unusual circumstances.”

Bruntz said she is still trying to track down details of the full contract with Wolf Creek, and understand why CC-V can be charged extra because of a storm in the Midwest and South that had no impact on Colorado’s high country.

She has no idea yet whether Wolf Creek will change the bill, or let the schools pay a little bit each month over a long period of time, as Xcel and other large utilities are proposing to do for Front Range customers. 

“Yes, so that’s quite a chunk,” she said. The February bill looks like a whole teacher’s salary in a place like Cripple Creek. “That,” she said, “and then some.” 

The school board, she said, was “in complete shock. It is what it is, we have to deal with it, but you know we’ll have to make budget adjustments and changes and some things are going to get cut.”

Each week seems to bring news of a new group of customers stunned by the February storm prices. Xcel, Black Hills Energy, Colorado Springs Utilities and others have told the Public Utilities Commission hundreds of dollars extra from the average customer over the next two years to pay for their extra fuel costs during the storm. Gov. Jared Polis has urged the PUC to rigorously investigate the requests and review whether the utilities did enough to protect consumers from price surges

Utilities regulated by the PUC — not all in the state are — have the right to pass on higher fuel costs to consumers if they can prove they are necessary. The utilities have argued their costs went out of control because natural gas prices spiked when demand in Texas and other states peaked in the storm, and because natural gas distributors were also impacted by the weather. Colorado Attorney General Phil Weiser and others have asked federal authorities to also investigate whether financial manipulation and profiteering made gas prices far worse for consumers.

It takes a big storm and energy-use spike to expose the harsh details of many utility contracts, the Office of Consumer Counsel’s Pereira said. 

“These customers are sitting in contracts that either they don’t know they have or they don’t know are to their disadvantage,” he said. “And with climate change, these events are becoming more frequent.” 

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