Aurora development boom hits gas service snag, leaving schools and builders in limbo

One of Aurora's fastest-growing areas is running into an unexpected and confusing obstacle: uncertainty over whether natural gas service will be available for thousands of new homes and a school already under construction.

Along the Jewell Avenue corridor east of E‑470, backhoes and construction crews signal what developers describe as Aurora's next major growth frontier. Tens of thousands of homes are planned in the area, with many already underway.

"The only place you can go is east. You can't go into the city. You can't go west into the mountains. You can't really go south any further, and so that's why this area is really popular from a growth standpoint," said Jerry Richmond, CEO of Integrity Land Ventures, one of the developers working in the area.

That growth has spurred new infrastructure, including a new Aurora Public Schools P-8 campus.

"We have broken ground on the project, and we are currently building the school to open in 2027-28," said Josh Hensley, planning coordinator for the district.

But when the district moved to secure utility service, it hit a roadblock no one anticipated.

"As we went to apply for our power permit from Xcel Energy for the school," Hensley said, "there's no longer gas available to serve new developments in this area."

The problem stems from a proposed gas infrastructure expansion by Xcel Energy that still has not received a final, written decision from the Colorado Public Utilities Commission, the state agency that regulates utilities. Richmond said utilities have long known this growth was coming.

"They've known for at least five, maybe even eight years that all of this growth was coming and they built nothing to get ahead of it," he said.

The uncertainty is tied to a relatively new state policy. In 2021, Colorado lawmakers required tighter oversight of natural gas utilities, and starting in 2023, regulators began requiring companies like Xcel Energy to file detailed Gas Infrastructure Plans before expanding service to new developments.

When the commission reviewed Xcel's plan last month, a commissioner indicated opposition.

"I would decline to approve the plan," Commissioner Megan Gilman said during the April 15 meeting.

"I think we'll go through, perhaps, the individual projects or categories that they asked for approval of, and that's more appropriate," she said. "I would decline to approve it in its entirety."

Chairman Erik Blank and Commissioner Tom Plant agreed. But no formal written decision has been issued, leaving developers, school officials, and the utility with conflicting interpretations of what comes next.

"That's the problem that we're all faced with, is nobody really understood what the process was," Richmond told CBS Colorado's Kelly Werthmann.

Both developers and the school district initially believed the plan had been denied. Xcel Energy, in a statement to CBS Colorado, said it also understands that the commission did not approve the proposal, but is waiting on a written decision to confirm next steps. Meanwhile, the PUC's director told CBS Colorado in a phone conversation that the plan has not officially been denied.

The mixed messaging has left projects in limbo.

"We don't have a clear road path about what the next steps are," Hensley, the planning coordinator for the school district, said.

For Aurora Public Schools, the timing is critical. Schools along the E‑470 corridor are already at or nearing capacity, and without the new campus, the district may have no way to accommodate incoming students tied to rapid housing growth.

"It's a very scary issue because, again, there's no road map for this. We do not know how this is going to be resolved," Hensley said. "What direction are we supposed to take knowing that we have to have a school open by 2027 that needs to have heating and cooling?"

He said redesigning the school to be fully electric at this stage would present major challenges.

"We don't have time or the budget to go back and redesign this school to be an all-electric facility," he said.

Hensley added that while the district supports Colorado's transition to cleaner energy, the sudden change in process has created confusion.

"My biggest frustration is just the unknowns," he said. "The school district wholeheartedly understands and embraces the need for clean energy in the state of Colorado. What I guess we don't understand is why this school that has been in planning for so long, and this development area that has been known and in planning for decades, why is this the first case?"

Developers say they, too, relied on long-standing assurances that utility service would be available. Richmond, of Integrity Land Ventures, pointed to "Will Serve" letters issued by Xcel Energy, which historically have indicated a project can move forward.

"It says, 'if you do these things, like pay your fee for the design fee, then we will serve you,'" Richmond said. "That's what we rely on. This Will Serve letter has been requested from Xcel Energy for years, and never have we had a problem where they then come to you and say, 'I can't serve you. I don't have capacity.'"

Now, he says developers are facing delays and rising costs tied to uncertainty.

"It's very frustrating, and it's financially cruel," Richmond said. "We are spending millions and millions of extra dollars, and we're being asked to now spend millions and millions of more dollars just to get capacity to the area that they've already said you're going to get service."

Richmond said the lack of a clear decision has stalled progress.

"The fact that you don't know, and you still don't know, even a year after we've started this process," he said, "we're all sitting here with our hands tied."

In its statement, Xcel Energy said it is waiting on the commission's written decision, which will provide additional details. The company said its understanding is that the commission did not approve its request tied to the Aurora New Business Buildout project, which would provide gas infrastructure for roughly 25,000 homes and a new public school.

"The Company and its customers are eager to advance these projects to support community growth," Xcel said in part of its statement, adding that it continues to support both electrification options and customer choice across Colorado.

For now, with no official ruling in writing, developers, school leaders, and the utility all remain in wait, uncertain how or when this rapidly growing part of Aurora will get the energy it needs.

A PUC spokesperson said on Thursday in a written statement, in part, that the commission's decision "does not preclude Xcel Energy from moving forward with the Aurora project. When Xcel Energy seeks to recover costs of the Aurora project in a future rate case, it will need to show that it was reasonable for it to incur the associated costs to complete the project."

"While the Commission hasn't issued a written decision yet, the Commission did ask for more costs on some projects, including the Aurora projects, but took no action to prevent their development," the statement continued. "No projects were denied."