Agreement with Xcel Energy on SB 100 Transmission Development and Stakeholder Participation Process

Interwest, working together with Xcel Energy and various other parties, reached a settlement agreement on 22 February that dramatically invigorates the SB 100 transmission development implementation process, which we had attacked as being “wholly inadequate.” This agreement sets out a detailed timetable that Xcel will follow in conducting new (and more frequent) stakeholder-driven transmission study groups, culminating next March with the filing of new CPCN applications for transmission necessary for generation resources “reasonably likely to come online by 2015” in all four of its currently designated energy resource zones.

For years, Interwest has worked to address Colorado’s severe transmission deficiencies. We participated in a state 2006 Transmission Task Force (one of whose recommendations included legislation similar to SB 100) and then worked closely with Xcel Energy and many other stakeholder parties in drafting SB 100 itself in the 2007 legislative session. SB 100, signed into law last March, provides current cost recovery for investor-owned utility transmission investments to transmission-constrained “energy resource zones” throughout the state. These specific resource zones and transmission deficiencies are identified in biennial reports to be filed with the Colorado PUC, starting in October 2007.

Despite Xcel’s strong support for the new law and its professed enthusiasm for developing new transmission for renewable energy projects, we were unhappy with its first SB 100 report, filed with the PUC on 31 October. We expressed our concerns in comments and reply comments filed with the Colorado PUC. Essentially, we argued that Xcel’s SB 100 plan was wholly inadequate in addressing the severe transmission constraints hindering new renewable energy development in Colorado, and we called for much more aggressive identification of resource-rich energy resource zones, recommending that the highly detailed “Generation Development Areas” in the SB 91 Task Force’s report be substituted for Xcel’s large and vaguely defined zones.

Happily, in this agreement and in recent public statements, Xcel has indicated its willingness to use the highly detailed SB 91 Task Force maps to guide its future work in this effort. This important task force report found eight specific “Generation Development Areas” (“GDAs”) in Colorado with a combined 96GW of wind capacity, and two GDAs with a combined 26GW solar capacity.

This SB 100 transmission agreement takes the form of a side letter filed by Xcel with the Colorado PUC as part of the company’s Energy Resource Plan (Docket No. 07A-447E), in which we are intervening. This side letter resulted from settlement negotiations on a related docket (the Pawnee-Smoky Hill Docket), in which we endorse the Pawnee-Smoky Hill 345kV upgrade (which itself will enable at least 500MW of new capacity from northeastern Colorado by 2013) in return for Xcel agreeing to this more-aggressive SB 100 implementation timetable.

The new SB 100 stakeholder process kicks off on March 4th in Denver, and all interested stakeholders should consider taking part in this meeting. For more details on this meeting, and on other aspects of SB 100, visit Interwest’s SB 100 page.

This agreement could not have happened without Interwest’s attorney, Ron Lehr, for his vision in advancing this timetable and for seeing it through the settlement process. This agreement puts us on the right track to the effective and proper implementation of SB 100, making it an important building block in a strong interstate transmission network connecting Colorado with neighboring states and markets throughout the southwestern U.S.