DENVER—Colorado regulators Friday affirmed a judge’s finding that two utilities have shown the need for a new power line in south-central Colorado, but they rejected the condition that rate payers get refunds if a certain amount of electricity isn’t generated in 10 years.
The state Public Utilities Commission agreed with an administrative law judge’s decision that Xcel Energy and Tri-State Generation and Transmission have demonstrated a need for the 150-mile power line the two want to build in the San Luis Valley. That’s a major step in the $180 million project, but appeals are expected.
A federal environmental review of the project also has to be completed and the two companies need approval from local governments.
Xcel Energy, though, scored a big victory when the commission rejected the recommendation that the utility refund rate payers 50 percent of the money collected from them if the line doesn’t generate at least 700 megawatts of electricity 10 years after power starts flowing. The Minneapolis-based company said it likely would have shelved the project if that condition remained.
“We’re very pleased with the decision,” Xcel Energy spokesman Mark Stutz said.
The potential of having to make the refunds would have threatened the project’s economic viability and would have been bad public policy for this project and others, Stutz said.
A spokesman for a landowner opposing the project said the PUC’s decision was disappointing, but expected.
“What is appalling is that the PUC caved to the utilities today and the rate payers lost,” said Cody Wertz, spokesman for Trinchera Ranch owner Louis Bacon.
The power line would cross part of the 171,000-acre ranch owned by Bacon, a billionaire hedge-fund manager. He has said construction of the line would harm a pristine area and that other routes make more economic and environmental sense.
Wertz said Trinchera Ranch will continue challenging the project, including the removal of the condition that rate payers be reimbursed.
Opponents have also noted that Xcel Energy has scaled back projections of the amount of solar-generated electricity it expects the transmission line to distribute. South-central Colorado is considered a prime spot for development of solar facilities.
Xcel Energy has said it’s not backing off plans to increase the amount of power it gets from solar energy, but that uncertainty over the timing of the power line has affected planned projects. Stutz said Xcel Energy originally hoped to complete construction by May 2013, but believes a more likely date is spring of 2015.
