Xcel Energy's $15 Billion Proposal Raises Concerns Over Additional Transmission Costs
Xcel Energy-Colorado's proposed $15 billion blueprint for delivering electricity through 2030 is facing criticism from the Colorado Public Utilities Commission (PUC) due to nearly $3 billion in additional transmission costs.
The PUC expressed concern over the significant increase in expenses compared to the first phase of the proposal, which could potentially lead to large rate increases for customers.
The proposal, which aims to add approximately 6,500 megawatts of wind and solar power and storage on Xcel's system, has been hailed as "transformational" by commission members. The proposal state it will cut greenhouse gas emissions by an estimated 87% from 2005 levels by 2030, marking a significant transition from fossil fuels.
However, the PUC is raising eyebrows at the substantial increase in transmission costs, particularly the $2.8 billion allocated for upgrades in the Denver area.
The Office of the Utility Consumer Advocate criticized Xcel Energy's portrayal of the Power Pathway as the solution to its transmission needs, arguing that the company did not indicate the billions of dollars in additional transmission costs.
The PUC staff and the consumer advocate's office warned that the higher transmission costs could potentially result in significant rate increases for customers, contrary to Xcel Energy's claims of an average annual rate increase of 2.3%, below inflation.
The PUC also expressed concerns about the timing and cost of Xcel's proposed power projects in relation to the required transmission infrastructure. Commission Chairman Eric Blank suggested that some projects could be delayed to better understand the costs and necessity of new transmission.
Parties involved in the proceedings have challenged the fact that Xcel Energy would own approximately 66% of the new facilities under the plan.
READ MORE:
XCEL ENERGY PROPOSES $15 BILLION PLAN TO ADD RENEWABLE ENERGY TO ITS SYSTEM
XCEL CUSTOMERS FACE $66 MILLION HIKE IN GAS BILLS THIS WINTER
COLORADO’S ENERGY POLICY SHOULD INCLUDE LESS POLITICS AND MORE POLICY
Critics argue that a 2019 law aimed at clean energy plans set a target of utilities owning about half of the infrastructure, with the other half privately owned. The costs of Xcel-owned facilities are added to the rate base, increasing the financial burden on customers.
Another point of contention is Xcel Energy's plan to build three new natural gas plants, which has raised concerns about stranded assets and their impact on ratepayers. Some believe that the technology will be phased out over the next 25 years, leaving customers to pay for plants that may become obsolete.
These concerns have led to opposition from community and environmental groups, who rallied at the state Capitol against the construction of new gas plants. Critics argue that the plants would cost ratepayers $1 billion and have negative effects on air quality, health, and the warming climate.