Day 7 of Testimony
24A-0442E, Public Service Company - 2024 JTS - 06.20.25 - HRA (7 of 9)
The Full Day
NotebookLM generated (footnotes by me)
Key Variables for Analysis:
The discussions in the provided sources highlight several critical variables that influence energy planning and the transition:
Load Growth: A significant and rapidly increasing demand for electricity, particularly from new large customers like data centers.1 This growth challenges existing infrastructure and resource adequacy.
Emissions Reduction Targets: The primary driver for the energy transition, specifically aiming for an 80% emissions reduction by 2030 and a full transition off coal.
Grid Reliability: The essential need to maintain consistent and reliable electricity service while integrating more variable, weather-dependent clean energy sources. This involves managing complexities, ensuring adequate capacity (ELCC, PRM), and planning for system stresses.
Cost and Affordability: Balancing the significant capital investments required for new generation and transmission infrastructure with the need to keep customer rates affordable.2 This also includes considerations for cost recovery mechanisms.
Just Transition: Ensuring that the transition away from coal-fired generation protects affected Colorado workers and communities.
Infrastructure Development Timelines: The time required to plan, approve, and construct new transmission lines and generation facilities, which often conflicts with the urgency of load growth and emissions targets.3
Regulatory Processes and Stakeholder Engagement: The multi-phased nature of the JTS (Phase I and Phase II), its interaction with other dockets (e.g., VPP, DSP, ABP), and the varying levels of stakeholder involvement in different planning stages (e.g., CCPG task force, small stakeholder group).
Technology Capabilities: The evolving capabilities and integration of diverse energy resources, including centralized generation, distributed energy resources (DERs), and battery storage, each with unique operational characteristics and values to the system.4
Comparison of Possible Solutions (as discussed by parties):
The hearing primarily focused on Public Service Company's (PSC) proposed solutions and the responses, suggestions, and challenges from other parties.
Addressing Load Growth:
PSC's approach: Public Service Company proposes using its updated Base Case forecast, which incorporates new, large customer loads, primarily data centers.5 They advocate for procuring resources for these loads through the proposed Phase II competitive solicitation process. PSC believes this is "timely and efficient and cost effective" and fulfills their "duty to serve," aiming to prevent customers from leaving Colorado. They also propose interim measures such as filing highly confidential electric service agreements and interconnection agreements for large strategic economic development customers.
Alternative/Concerns: The "incremental need pool" process is mentioned as an alternative to serving new large loads, but PSC identifies downsides, including potential delays and higher costs, which could deter economic development in the state.
Transmission Planning and Investment:
PSC's approach: PSC proposes a "two-step transmission planning process".
Step 1 (Proactive): Involves establishing a Colorado Coordinated Planning Group (CCPG) task force to engage stakeholders in developing new transmission needs. This aims to identify "macro transmission aspects" and larger projects.
Step 2 (Implementation Phase): Focuses on detailed analysis of specific transmission necessary to deliver the received Phase II portfolio, driven by specific generators.
Intervenors' suggestions/concerns: Intervenors had recommended filing a CPCN application for all necessary transmission within 100 days of the Commission's decision. PSC disagreed, citing insufficient time, but acknowledged the underlying need for new transmission. Discussions also included the substantial cost of transmission upgrades (e.g., the New Harvest Mile-Cherokee line costing over $1.8 billion) and the potential for "surprise costs".
Chairman Blank's suggestion: Chairman Blank explored whether siting large new loads on the high-voltage side (345 kV) of constrained Denver metro substations (like Smoky Hills and Daniels Park) could simplify transmission planning and reduce overall costs compared to putting them within dense urban areas. Mr. Martz stated that large loads haven't been a "significant driver of transmission network upgrades" in their studies and that PSC doesn't control customer siting, but PSC is open to exploring reasonable price signals for load siting.
DERs and Distribution Credits:
PSC's approach: PSC proposes a "distribution credit of $69 a kilowatt year per year" for eligible distribution-connected bids, derived from the Virtual Power Plant (VPP) case. They intend to provide the confidential list of eligible feeders (Hearing Exhibit 310) with or potentially before the Phase II RFP. PSC also commits to incorporating any values for the distribution credit approved in the separate VPP docket into the JTS Phase II modeling.
Intervenors' suggestions/concerns: CCSA witness Mr. Beach recommended a higher distribution credit of $276 per kilowatt year for constrained circuits and a base credit of $65 per kilowatt year for all distribution-connected resources. Intervenors also raised concerns about the confidentiality of the feeder list and the need for earlier access for project developers. PSC stated the confidentiality is due to feeders being "highly loaded".
Summary of Major Topics:
1. Transmission, Distribution, and/or Battery Capacity
Transmission Capacity and Needs:
Purpose/Need: The JTS aims to identify frameworks for meeting energy and capacity needs through 2031. Transmission studies are designed to identify needs across various resource portfolios and guide improvements for reliable delivery. Public Service Company (PSC) anticipates the need for significant transmission investment to deliver generation portfolios.
Specifics/Solutions: PSC proposes a "two-step transmission planning process".
Step 1 (Proactive): Involves establishing a Colorado Coordinated Planning Group (CCPG) task force to engage stakeholders in developing "macro transmission aspects" and identifying larger, proactive transmission projects, similar to the Colorado Power Pathway (CPP). PSC is the "hosting utility" for this task force and will primarily conduct the studies, potentially with consultants.
Step 2 (Implementation Phase): This phase focuses on detailed analysis of specific transmission necessary to deliver the resources identified in the Phase II portfolio, driven by specific generators, ensuring "reliability and deliverability".
The "New Harvest Mile Cherokee 230 kilovolt line" (or a 345 kV alternative) is a costly project ($1.8-$1.94 billion) included in every studied transmission scenario and makes up most identified transmission costs.
The "May Valley-Longhorn Extension" (MVLE) is viewed as an "extension cord" to the CPP, radial in nature, designed to access beneficial renewable resources.
Costs: PSC's witnesses stated that over the next 20 years, transmission spending could be as high as $38 billion, though this is considered speculative beyond the near-term. Indicative JTS transmission estimates range from $1.9 billion to $2.4 billion.
Agreement/Disagreement:
Agreement: There is broad agreement on the underlying need for new transmission investment to support the energy transition.
Disagreement: PSC disagrees with intervenor proposals for a 100-day timeline for CPCN applications due to insufficient time for planning.
Different Opinions: While PSC states large loads are not a significant driver of network upgrades, Chairman Blank questioned if siting large loads outside the Denver metro area on high-voltage lines (345 kV) could simplify transmission and reduce costs. PSC acknowledged openness to exploring price signals for load siting.
Distribution Capacity and Needs:
Purpose/Need: To recognize the value that distributed energy resources (DERs) provide to the system and encourage their interconnection.
Specifics/Solutions: PSC has agreed to provide a "distribution credit of $69 a kilowatt year per year" to eligible distribution-connected bids, based on calculations from the Virtual Power Plant (VPP) case. The specific feeders eligible for this credit are listed in Hearing Exhibit 310, which is confidential as it identifies "highly loaded" parts of the distribution system. PSC plans to provide this list with or potentially before the Phase II RFP.
Agreement/Disagreement:
Agreement: PSC is committed to incorporating the Commission's final approved distribution credit values from the VPP (ABP) docket into the JTS Phase II bid evaluation.
Disagreement: CCSA recommended a higher distribution credit ($276/kW-year for constrained, $65/kW-year base). PSC argued that the specific value should be litigated in the VPP docket, not the JTS docket, due to insufficient record.
Different Opinions: Intervenors expressed a need for bidders to have earlier access to the confidential feeder list for project planning.
Battery Capacity and Needs:
Purpose/Need: To support the system's increasing reliance on weather-dependent clean energy, provide resource adequacy, and evolve the clean energy transition while maintaining reliability.
Specifics/Solutions: PSC is exploring Carbon-Free Electricity (CFE) goals, including battery storage. The "Renewable Battery Connect program" allows for 60 annual dispatch events for up to three hours, which was an outcome of a settlement agreement. PSC also proposed in the ABP proceeding to increase dispatch capabilities for distributed resources to 4-hour dispatches and 100 events per year to enhance their system value. PSC has advanced its "aggregator DERs" project, with a vendor selected for an end-of-summer go-live date, and is developing its "Grid DERs" project to manage DERs for system benefits, aiming for stand-up by Q1 2026.
Agreement/Disagreement:
Disagreement: PSC's cost assumptions for distributed storage were criticized for assuming the "full cost of the asset". PSC is open to updating modeling assumptions.
Different Opinions: Discussions occurred on whether demand resources should be treated as a load reduction until the full DERs program is operational to ensure accurate capacity value modeling.
2. Opinion on Power Sources
Wind & Solar (Renewables):
In favor: The JTS is intended to continue the clean energy transition, taking a significant step towards emissions reduction. The system is increasingly reliant on "clean but weather-dependent energy generation".6 PSC's 2024 JTS Application seeks approval for its 2024 Just Transition Solicitation, which includes finding a framework to meet energy needs through 2031. The "bookend one" transmission scenario reflects a "high renewables resource procurement".
Gas (Natural Gas Generation):
Neutral/Necessity: The 2021 Electric Resource Plan and Clean Energy Plan (ERP & CEP) included "clean energy and thermal replacement" for coal. The "baseline" transmission portfolio within the JTS transmission study includes a "balanced approach of clean energy resources and natural gas generation". Pawnee is converting from coal to gas as part of the workforce transition plan.
SMRs (Small Modular Reactors) & AP-1000:
Not explicitly mentioned/No specific opinion expressed: The provided sources do not explicitly state opinions for or against SMRs or AP-1000. PSC discusses exploring "carbon-free electricity (CFE) goals" and a "Carbon Free Future Development Policy" to spur innovative, capital-intensive, or long lead time clean energy resources, which could encompass SMRs, but they are not named in the provided text.7
3. Issues and Suggestions on Data Centers
Significant Load Driver: Large new customer loads, particularly data centers, are identified as a "key driver of load growth," comprising approximately one-third of the roughly 900 MW of large load in the updated base load forecast.
Managing New Large Loads:
PSC uses a "probability table" (Hearing Exhibit 123, page 30) for large load commitments and is using "large load principles" in ongoing negotiations with prospective data center customers. PSC is willing to modify this table to use "steps" instead of numeric percentages.
For a generation project from the "incremental need pool" to be triggered, a large load customer of 100 MW or more must reach a 90% probability (ninth step).
PSC warns that delays in serving these loads (e.g., by relying solely on the incremental need pool) could cause customers to leave Colorado, impacting job and tax bases.
Contracting and Tariffs: PSC is willing to file confidential electric service agreements (ESAs) and interconnection agreements (IAs) for strategic economic development customers and large loads (over 100 MW) during the interim period. The proposed large load tariff would apply to customers taking service after its effective date, not automatically to current or interim customers. PSC believes its existing "TG tariff" is sufficient for the current nine large load customers.
Agreement: PSC is committed to a stakeholder process for developing the large load tariff and is open to dialogue on all related issues.
4. Issues and Suggestions on Moving the State to All Electric (Heat Pumps, Electric Vehicles, etc.)
Load Growth Driver: Electrification (e.g., home heating, electric vehicles) is recognized as part of "organic load growth" contributing to increased demand beyond large industrial loads.
Managed Charging: Current managed charging programs for EVs primarily focus on "load smoothing" during overnight hours to utilize excess capacity; they are seen as a "load management tool," not a supply-side resource. PSC's modeling shows a 2 GW peak reduction from managed charging by 2050.
Load Flexibility Study: PSC is conducting a "cross-jurisdictional load flexibility study" with Brattle. This study explores various technologies, technical and economic potential, human behavior interaction (e.g., customer fatigue), and distribution feeder archetypes to understand load flexibility's applicability at both bulk system and distribution levels.
Agreement: PSC is open to exploring ways to leverage managed charging as a supply-side resource if it meets program attributes.
5. Keeping Rates Affordable
Core Objective: Maintaining affordability is a "cornerstone" of the Commission's resource planning process and a key objective of the JTS.
Cost Management: PSC's witnesses address the Company's "long-term rate analysis". PSC emphasizes that procuring power for new large loads through the Phase II RFP is considered "cost effective". PSC states that large loads are generally "beneficial to rates overall," based on their long-term rate forecast analysis, and that capital expenditures (like transmission) also provide benefits.
Capital Expenditure Concerns: Significant capital expenditures are projected for transmission, with estimates up to $38 billion over 20 years. Chairman Blank noted the potential for this to significantly increase the rate base.
Cost Recovery: PSC requests approval to defer costs of the proceeding and power purchase agreement negotiations into a non-interest-bearing regulatory asset for future recovery. Costs for a labor economist are sought through the Electric Commodity Adjustment (ECA).
Agreement: While concerns about high costs are present, there is implicit agreement on the importance of balancing capital investment with affordability.
6. Keeping the Grid Reliable, Including Retaining Strong Inertia
Primary Objective: Maintaining "reliability while meeting load growth needs" is a "sizeable objective" of the JTS. This includes managing the complexities of an increasingly clean and weather-dependent electric system.
Reliability Assessment: PSC's 2024 JTS Application is supported by an updated Effective Load Carrying Capacity (ELCC) and Planning Reserve Margin (PRM) study (the "2024 RA Study"). This study consistently models and evaluates all resource types, which is deemed important given the system's increasing complexity.
Technology & Planning for Reliability: Mr. Tomljanovic highlights the need for "generation technologies to evolve the clean energy transition while maintaining reliability". Transmission planning aims to ensure "reliable delivery" under varying conditions, and the implementation phase analyzes "reliability and deliverability" issues from the generation fleet. PSC is creating diverse opportunities for DERs to contribute to "resource adequacy" and "system challenges".
Inertia: The specific term "strong inertia" is not directly mentioned in the provided sources.8 However, the broader discussions around managing grid complexity, ensuring dispatchability, and maintaining reliability with increasing intermittent renewable generation implicitly address the challenges that a system with less traditional synchronous generation (which provides inertia) might face. The focus is on the operational attributes of new resources (e.g., 4-hour dispatch, 100 events/year for DERs) to meet reliability requirements.
Agreement: All parties implicitly agree on the paramount importance of grid reliability.
7. Reducing Carbon Emissions
Core Objective: A primary goal of the JTS is to "reduce emissions" and implement an "80 percent emissions reduction by 2030". The solicitation aims to complete the effort to meet 2030 emissions targets set by Senate Bill 19-236 and "fully transition the Public Service system off of coal".
Coal Fleet Transition: The 2021 ERP & CEP accelerated the retirement of coal-fired generation (Craig 2, Hayden 1 & 2, Pawnee, Comanche 3). Hayden 1 and 2 retirement dates were advanced to 2027 and 2028, respectively. The workforce transition plan addresses early retirement of Comanche 3 and Pawnee's conversion to gas. Approval is sought to sync Cherokee 4's retirement date to 2028, aligning with Colorado's Regional Haze State Implementation Plan.
Carbon-Free Electricity (CFE) & Innovation: PSC is pursuing CFE goals and exploring CFE technologies. They propose a "Carbon Free Future Development Policy" to competitively seek proposals for "innovative, capital intensive or long lead time clean energy resources" to spur development.
Agreement: There is broad agreement on the objective of reducing carbon emissions and transitioning off coal, as it is a mandated target. The JTS is framed as a critical step in this transition.
I think we’ll see a larger increase due to electrifying everything.
Reminder - going wind & solar means overbuilding generation as they’re not always producing, buying a shit-ton of batteries, and building out backup gas generators to handle the repetitive case of no wind, nighttime, batteries empty — and it’s dinner time.
Environmental Interest Groups: We must address global warming! I don’t want you building transmission lines! Why aren’t you addressing global warming?
Keep in mind that Datacenters are significant additional profit for Xcel. They are not that big a deal for Colorado.
No discussion, no evaluation, just go with the approach other countries are finding to be a very bad idea?
Which means for the near future do not use the green energy solution that is inexpensive, reliable and operates 24/7.
This is not good. If they don’t specifically address this we will have events like the recent grid failure in Spain.