Colorado state regulators set guidelines for Xcel to grow power grid
Colorado regulators have approved initial guidelines for Xcel Energy to significantly expand the state's power grid -- a move that could cost ratepayers billions of dollars in the coming years.
On Aug. 27, the Colorado Public Utilities Commission approved a plan allowing for the potential addition of more than 6,000 megawatts of new energy generation. The increased capacity is intended to help replace aging resources such as coal-fired power plants, while also meeting rising energy demands from new developments -- including artificial intelligence data centers and the continued electrification of homes and vehicles.
The decision aligns with the state's long-term renewable energy goals, but will result in substantial infrastructure investments -- with the costs passed on to customers.
"In multiple ways, this will likely be the single largest resource acquisition in the history of Colorado, and an over $15 billion commitment from customers," said Eric Blank during a PUC meeting, who is the chair of the commission.
Jack Ihle, Xcel Energy's regional vice president of regulatory policy, said the company believes it can keep rate increases relatively modest over time.
"Over the long term, we think it's possible to keep rates at the rate of inflation, which is kind of the historic norm -- around two to three percent per year," Ihle said. "I will say, as you add some of these larger investments, it could be more in the short term at certain times. But, over the long term, the additional sales that it brings can significantly offset that and keep rates affordable."
Commissioners noted that while Xcel could pursue even more capacity in the future, any additional expansion would require signed commitments from new large-load customers -- such as data centers -- before approval.
In a statement form the PUC, it said, the "commission's approach is meant to protect existing ratepayers from what parties argued could create up to a 50% increase in average residential rates by 2031 if large customer loads do not materialize but costly new energy generation has already been built to serve them."
