The 21-month fight at the Colorado Public Utilities Commission over a proposed $180 million power line across La Veta Pass into the San Luis Valley ended Friday — but the question of whether ratepayers were protected lingers.
After months of hearings, Administrative Law Judge Mana Jennings-Fader in November ruled the line, proposed by Xcel Energy and Tri-State Transmission Association, was needed.
Tri-State said the line will ensure electricity reliability. Xcel, which is under a mandate to get 30 percent of its energy from renewable sources by 2020, wants to use the line to export solar energy from the valley — the best solar source in the state.
But Jennings-Fader recommended one condition: Xcel must get 700 megawatts of new generation on the line in 10 years or refund 50 percent of its $90 million share of the cost to consumers.
Xcel warned that condition would kill the line, and Friday, PUC chairman Ron Binz and Commissioner Matt Baker approved the line without condition.
The third commission member, James Tarpey, recused himself because he had discussed transmission with utility executives after the case was filed.
The two commissioners cast their votes even though the PUC staff supported the condition, saying it thought the 700- megawatt requirement forced Xcel to “have some skin in the game.”
The staff noted that customers are already bearing power-line costs through a special automatic pass-through on bills and accelerated construction-cost recovery.
In approving the project, Binz said that adding the unprecedented condition was a “hedge-your-bets style of regulation.” He said, “We don’t want that.”
“The question is who is regulating who?” said Cody Wertz, a spokesman for Trinchera Ranch, which is owned by hedge-fund billionaire Louis Bacon and is opposing the line. The proposed line would cross the 171,400-acre ranch in the San Luis Valley.
“This was a legal and advisable condition and a fair balance of risk. At the end of the day, it was ratepayers who lost,” Wertz said.
But that issue of risk is precisely why the condition should not have been attached, said Xcel spokesman Mark Stutz.
“It is very difficult to get people to invest in a utility with that kind of risk out there because we are regulated and don’t offer big returns,” Stutz said. “We don’t have hedge-fund returns.”
Even renewable-energy producers had concerns, said Craig Cox, executive director of the Interwest Energy Alliance, a trade group.
“If you start putting conditions on a particular line, you are going to skew the market,” Cox said. “Then there will be the push for conditions on every line — and pretty soon you’ll balkanize the state.”
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
