Updated by Staff

Both regular citizens and businesses took shots at Xcel Energy’s multimillion dollar Boulder-based SmartGridCity pilot at a Colorado Public Utilities Commission hearing yesterday.

SmartGridCity was cited for not having strong cost controls, according to filings by the commission staff and citizen watchdog groups. An attorney for mining and steel companies asked Xcel’s Mary Fisher, who has been overseeing SmartGridCity, “”Has the company invested money in the program that is not subject to rate recovery?”

“Not that I am aware of,” she replied.

The Climax Molybdenum Co., which operates a mine in Empire, and Rocky Mountain Steel of Pueblo contend in filings that smart grid in Boulder may be a research-and-development proj ect that shareholders and not ratepayers should fund.

A private citizen intervenor by the name of Leslie Glustrom asked whether a rigorous economic and financial analysis of the program was done. “The SmartGridCity pilot was based on value propositions,” said Fisher. Adding “financial hypotheses were made.”

Out of control costs have bedeviled the project launched by Excel Energy in 2008, tripling to $44.5 million.  The program was intended to better manage electrical distribution and give consumers detailed information about their power usage. Xcel Energy is seeking a PUC certificate verifying that its smart-grid investments were prudent.

The hearing before Administrative Law Judge Harris Adams will end on Friday and he will issue a “recommended decision” at some later point. If the decision is challenged, the case will go to the full commission, which would likely rule in late fall, according to commission spokesman Terry Bote.

In a preemptive move late last week, the COPUC staff, the Governor’s Energy Office and Xcel struck an agreement that would cap Xcel’s smart-grid cost recovery at $44.5 million.

While the agreement still has to be approved by the commission, smart-grid charges went into customers bills starting Jan. 1 as part of the last rate increase.

According to the PUC’s Bote, if the certificate is not granted, customers will get a refund.