Day 9 of Testimony
A lot of fantasyland, a few glimpses of sanity.
The Full Day
I’m all in favor of reducing1 carbon emissions. I’m all in favor of electrifying most everything. What I am opposed to is two things. First, overspending to get there quickly so some politicians can take a victory lap ASAP while poor families & individuals have yet another bite taken out of their take home pay.
Second, going for an expensive, intermittent, and unreliable solution (wind, solar, batteries) when a less expensive, dispatchable, reliable alternative exists - nuclear.
I worry we’re in the FA part of FAFO. And when we hit the FO all the politicians that set us up on the road to disaster will have moved on leaving the next set to clean up their mess. Their very expensive mess.
With that said, there are some promising glimpses of sanity in the summation below. Here’s hoping…
NotebookLM generated (footnotes by me)
Key Variables
Before delving into the specific topics, it's important to understand the key variables that underpin the discussions in this proceeding. These include:
Statutory Requirements and Policy Goals: The legal mandates for emissions reductions (e.g., 80% by 2030, striving for 100% by 2050), and the legislative declaration of a moral obligation to ensure a just and inclusive transition for coal communities.
Economic Impacts of Coal Plant Closures: The significant loss of property tax revenues and jobs in communities dependent on coal-fired power plants, driving the need for economic development and community assistance.
Grid Reliability: The essential need to maintain a stable and dependable electricity supply amidst a transition to new generation sources.
Customer Affordability: The concern that the costs of the energy transition, including new infrastructure and community assistance, do not unduly burden ratepayers.
Technological Evolution and Costs: The changing costs and availability of different energy technologies (wind, solar, gas, nuclear) and the challenges of integrating them into the grid.
Load Growth: The impact of new, large loads (e.g., data centers, electrification) on the system's capacity, reliability, and emissions trajectory.
Just Transition Frameworks: Different models and approaches for providing community and workforce assistance, beyond traditional property tax backfills, to foster economic diversification and resilience.
Here is a summary of the major topics discussed in the transcript:
1. Transmission, Distribution, and/or Battery Capacity
Key Variables: Need for new infrastructure, cost, reliability, access to renewable resources, and integration of new loads.
The discussion primarily focuses on the May Valley Longhorn Extension (MVLE) transmission line.
UCA's Position (Utility Consumer Advocate):
The UCA's position, as articulated by Mr. Neil, is for conditional approval of the MVLE. They believe it should only be built if enough bids (from generation projects) justify its cost.2
Mr. Neil states that while there is good wind potential in southeastern Colorado (which MVLE would access, as acknowledged by Dr. Clack's prior testimony cited by PSCO), this does not automatically justify the cost of the MVLE, especially compared to lower-cost wind resources in other regions.
UCA had previously opposed granting a Certificate of Public Convenience and Necessity (CPCN) for the MVLE and recommended delaying its construction for further study. They also plan to oppose the CPCN for the Denver Metro upgrade project.
Miss Henry (UCA) explains that UCA aims to ensure "just and equitable treatment" for communities and proposes alternative solutions, though she defers specific MVLE discussions to Mr. Neil.
Public Service Company's (PSCO) Perspective:
Mr. Eisenberg (representing PSCO) notes that the price of building the MVLE has increased since UCA last opposed it.
He highlights that Dr. Clack (a witness previously for UCA) testified in a prior proceeding (21A 096E) that the MVLE would provide access to the best wind resource in Colorado, specifically in the southeastern portion of the state. Baka and Las Animas counties contain 11% of the total maximum technical potential for wind development statewide.
PSCO suggests that a prior Phase 2 report showed the line to be cost-effective based on bids, though Mr. Neil disputes this.
Colorado Energy Office (CEO) and Quad-Party Framework:
The CEO, represented by Mr. Haye, has joined a "quad-party framework" (formerly tri-party).
This framework supports the use of an updated base load forecast and includes provisions for incremental need pool (INP) activations based on aggregate load ramps.
For aggregate load ramps greater than 500 megawatts (MW), PSCO would be required to file an application on a 120-day timeline, accompanied by an emissions verification workbook.
Smaller load triggers (100-499 MW) have a 45-day notice process and also require an emissions verification workbook. Loads less than 100 MW are clarified not to require a workbook in the current framework.
Mr. Haye sees this framework as an "elegant solution" to manage future challenges by setting up processes for evaluating resource needs.
Western Resource Advocates (WRA) on Incremental Need Pool (INP):
Miss Valentine (WRA) expresses serious concerns regarding the INP structure as it relates to large load growth, citing potential "ratepayer concerns" and "emissions concerns" due to what she views as a "pretty limited regulatory review" for load ramps under 500 MW.
She notes that this process could lead to over a gigawatt of resource acquisitions without sufficient comparative analyses.
WRA recommends that INP activation for large loads should be associated with signed contracts including consumer protections to ensure load commitment and maintain the emissions reduction trajectory.
Comparison of Solutions: There is disagreement on the necessity and timing of specific transmission projects like MVLE, with UCA advocating for conditional approval tied to demonstrated need via bids, while PSCO highlights its access to high-quality wind resources. There is a developing agreement on a framework for integrating new loads and potentially triggered INP resources, with CEO supporting the "quad-party framework" that defines review processes for different load sizes, although WRA still expresses concerns about the INP for large load growth.3
2. Power Sources
Key Variables: Cost, emissions profile, existing infrastructure, workforce, community acceptance, long-term resiliency, and ability to replace lost property taxes.
The discussion around power sources is heavily influenced by the goal of replacing lost property tax revenues from closing coal plants and diversifying local economies.
Wind and Solar (Renewables):
Support: Generally seen as essential4 for achieving emissions reduction goals.
Challenges: PSCO indicates that wind prices are up 74% and solar by 84%. Transmission access to the best wind resources is also a factor.
WRA notes that electric vehicles are "flexible" loads that "can be better paired with renewable generation".5
Natural Gas (Combined Cycle Gas Turbine with Carbon Capture):
Support (Pueblo Economic Development Corporation - PEDC): Mr. Shaw (PEDC) recommends a new natural gas plant in Pueblo in the short term to help make Pueblo "whole" after Comanche 3's closure.
Economic Benefit: The PISAC report (to which Mr. Shaw is a signatory) suggests a combined cycle gas turbine with carbon capture would generate approximately $16.5 million in annual property tax revenues.
Real-world Context: Tri-State has announced plans to construct a natural gas facility as a replacement for Craig Station.
Small Modular Reactors (SMRs) / Advanced Nuclear:
Strong Support (PEDC): Mr. Shaw explicitly recommends an advanced nuclear facility in Pueblo in the long term.6
Significant Economic Benefit: The PISAC report projects an advanced nuclear facility could generate approximately $95.2 million in annual property tax payments, significantly more than the lost Comanche 3 taxes ($31 million across three owners).
General Agreement/Disagreement: There is broad agreement on moving away from coal. There is strong advocacy from Pueblo (PEDC) for a combination of natural gas (short-term) and advanced nuclear (long-term) to replace the economic impact of coal plant closures, particularly property taxes. The transcript does not show explicit opposition to these specific technologies by other parties for that purpose, but the overall context of cost-effectiveness and affordability for ratepayers (discussed below) would apply to any new generation.
3. Data Centers
Key Variables: High load factor, impact on grid stability, cost allocation, and emissions trajectory.
Data centers are seen as a significant source of new, large load growth.
Opportunities and Challenges:
CEO (Mr. Haye) acknowledges that strategic economic development customers (like Denver International Airport expansion) and other large load customers are important economic drivers for the state.
However, integrating them presents a "Goldilocks challenge" in load forecasting: balancing affordability, reliability, and emissions reduction targets with realistic new customer needs.
Integration and Oversight:
The "quad-party framework" (supported by CEO) introduces specific regulatory processes for integrating large loads. As noted above, loads with aggregate ramps over 500 MW require an application and emissions verification workbook.
WRA (Miss Valentine) emphasizes that high load factor customers like data centers are a "different beast" to serve compared to more flexible loads like electric vehicles. She raises concerns that the current INP structure for large loads has a "limited regulatory review" and could lead to significant ratepayer and emissions concerns.
WRA advocates for additional modeling (e.g., an unconstrained portfolio without large loads) to better understand the costs associated with serving these customers and their impact on the emissions trajectory. This could inform future cost allocation, potentially suggesting that costs incurred to maintain the emissions trajectory due to large loads should be borne by those new customers.
General Agreement/Disagreement: There is agreement on the economic importance of attracting large loads like data centers. However, there is significant disagreement and concern regarding how to integrate these loads responsibly to prevent negative impacts on existing ratepayers and the state's emissions reduction goals, especially concerning the regulatory scrutiny and cost allocation mechanisms.
4. Moving the State to All Electric (Heat Pumps, Electric Vehicles, etc.)
Key Variables: Load growth, integration with grid, consumer cost, and emissions reduction.
Integration with Emissions Goals: CEO (Mr. Haye) confirms that building and transportation electrification are considered part of the state's emissions reduction goals and are factored into the updated base load forecast.
Load Characteristics: WRA (Miss Valentine) contrasts electric vehicles as "flexible" loads that can be "better paired with renewable generation," implying they are less challenging to integrate from an emissions and grid perspective than high load factor data centers.7
General Agreement/Disagreement: The transcript indicates that electrification efforts are an accepted part of the state's energy transition strategy and are included in load forecasting. No explicit issues or suggestions are extensively discussed beyond their general impact on load growth and integration.
5. Keeping Rates Affordable
Key Variables: Investment costs (generation, transmission), operational costs, property tax replacement costs, and cost allocation between shareholders, existing ratepayers, and new customers.
Universal Agreement on Importance: There is broad and explicit agreement across all parties and commissioners that ensuring affordable electric service is a paramount concern.8
CEO's Stance: Mr. Haye (CEO) consistently emphasizes that affordability is one of the "number of factors" the Commission must consider in evaluating an Electric Resource Plan (ERP), alongside reliability and emissions. He states the goal is to avoid "imposing costs on customers beyond what is needed". CEO's policy approach aims to achieve emissions reductions while "maintaining reliability and affordability".9
CEC's Concerns (Colorado Energy Consumers): Miss King (CEC) highlights concerns that accelerating energy transition requirements could "seriously risk driving energy costs higher at a time when our state is already nearing an affordability crisis". She emphasizes that "customer impacts and reliability must be top of mind".10
WRA's Perspective: Miss Valentine (WRA) agrees that "cost effectiveness is clearly referenced in statute" and supports solving for both emissions reductions and affordability.11 She argues that certain "no new gas portfolios" can achieve deeper emissions reductions while having "lower present value revenue requirement values" and a "lower societal cost". She also emphasizes that "Colorado's residential and small commercial rate payers should not be on the hook for costs that are introduced by large load customers".
Commissioners' Role: Commissioner Blank (Chair) and Commissioner Plant express concern about mandating greater emissions reductions if the cost and rate impacts are not fully understood or quantified.12
Comparison of Solutions: While affordability is a shared goal, there is disagreement on the trade-offs between achieving deeper emissions reductions and minimizing costs. Parties like CEC and commissioners raise questions about the costs of exceeding statutory minimums. WRA suggests that higher emissions reductions can be cost-effective and points to societal costs beyond direct rate impacts.13 The allocation of costs (e.g., for just transition payments or large load integration) is a point of contention, with some advocating for new loads to bear associated costs.
6. Keeping the Grid Reliable, Including Retaining Strong Inertia
Key Variables: Generation mix (dispatchable vs. intermittent), transmission capacity, load growth, extreme weather events, and planning processes.
Universal Agreement on Importance: Like affordability, grid reliability is a universally acknowledged critical factor in the energy transition.
CEO's Stance: Mr. Haye (CEO) views reliability as a key factor to balance with affordability and emissions reduction. He states that the updated base load forecast and the "quad-party framework" for large load integration are designed to help reasonably balance reliability. He asserts that the Commission would not approve emissions reduction levels if it believed they were not reliable.
CEC's Concerns: Miss King (CEC) explicitly states that "ensuring reliable electric service is important to CEO" and raises concerns about accelerating energy transition requirements potentially impacting reliability.14
UCA's Position (Lack of Explicit Stance): When questioned about unserved energy, acceptable megawatt-hours of unserved energy, and curtailment during blackouts, Miss Henry (UCA) states that UCA did not issue an opinion on these specific issues in their testimony and defers to their consultants.
Strong Inertia: While the term "strong inertia" is not explicitly used, the broader concerns about reliability, dispatchable generation, and managing new loads imply its importance.
Comparison of Solutions: All parties agree on the paramount importance of reliability. The solutions revolve around how different energy portfolios and load management strategies can maintain reliability. There are implicit disagreements on the risk tolerance for reliability when pursuing aggressive emissions reduction targets or integrating large, unpredictable loads.15
7. Reducing Carbon Emissions
Key Variables: Statutory targets, portfolio modeling approaches, cost-effectiveness of deeper reductions, and the impact of new loads.
The core of the proceeding revolves around achieving carbon emission reductions from the electric sector.
Statutory Requirements:16
The Colorado Revised Statutes (CRS 40-2-125.5) require electric retail utilities to achieve emissions reductions of at least 80% by 2030 from 2005 levels. This is considered a "floor requirement".
The statute also sets a goal of 100% reduction by 2050, with a qualification of "or sooner if practicable" and "technically and economically feasible" and "in the public interest".
The Updated Settlement Agreement (USA) in the 2021 ERP set a 90% emissions reduction target by 2033.
CEO's Recommendations:
Mr. Haye (CEO) recommends that the Commission approve a portfolio that achieves or exceeds the 86% level of emissions by 2030, as this level was previously approved in the 2021 ERP.17 He considers 86% to be greater than the 80% statutory floor.
For Phase 2 modeling, CEO advocates for considering trajectories that achieve 86%, 90%, and 100% emissions reductions. While they also suggest modeling 80/90/100% to understand cost differences, they believe the 86/90/100% trajectory should be used for decision-making purposes.18
CEO emphasizes that this proceeding is the "culmination of the clean energy plan process" to achieve 2030 targets, and there is a "cost cap provision" in the statute.
CEC's Stance:
Miss King (CEC) questions the necessity of evaluating impacts on reliability and cost for reductions beyond the 80% statutory floor.
She highlights concerns expressed by many signatories to a legislative letter about efforts to accelerate emissions reductions (e.g., 100% by 2040) risking higher costs and impacting reliability.
WRA's Recommendations:
Miss Valentine (WRA) recommends that the majority of Phase 2 portfolios should solve for a 90% emissions reduction by 2033, consistent with the previous settlement agreement. She notes that 10 out of their 12 proposed portfolios aim for this target.19
She also supports an "expedited 2030 decarbonization" path achieving 86% in 2030 and 90% in 2033.
WRA points out that the statute (40-2-125.5) does not explicitly state 86% by 2030 or 90% by 2033 as requirements.
WRA is concerned that large load growth could make it more difficult to hit emissions targets and suggests maintaining the emissions trajectory even if it means allocating additional costs to new, large customers.
Comparison of Solutions: There is agreement on the statutory minimum of 80% by 2030, and the long-term goal of 100% by 2050 (if practicable and feasible). However, there is disagreement on the optimal intermediate targets beyond the 80% floor. CEO advocates for 86% as a primary benchmark due to prior approval, while WRA pushes for 90% by 2033 based on the settlement agreement. CEC raises concerns about the cost and reliability implications of going beyond the statutory minimum.
Analysis of Response, Weaknesses, Assumptions, and Missing Perspectives:
Strengths:
Comprehensive coverage of all requested topics.
Clear differentiation of opinions/stances from various parties.
Directly supported by granular citations from the transcript.
Breakdown of "key variables" for each topic provides helpful context.
Addresses the "compare multiple solutions" aspect by detailing different proposals and the arguments for/against them.
Weaknesses/Assumptions/Missing Perspectives to Improve:
"Choosing the best one": My response correctly interpreted this as summarizing what the sources indicate as preferred/supported solutions by specific parties, rather than my own subjective choice. This avoids making an AI-driven "best" decision without a clear metric. The response highlights the preferred positions of parties like PEDC for specific power sources, or CEO for the Quad-Party framework, which aligns with this instruction.
Inertia (Implicit vs. Explicit): While reliability was covered, "retaining strong inertia" was explicitly mentioned in the query. My current response notes that "Strong inertia not explicitly mentioned but implied through reliability concerns and the need for dispatchable resources." A more thorough review for any direct or indirect mentions of inertia, even if fleeting, would strengthen this point. (Self-correction: A quick re-scan confirms no explicit mention of "inertia" in the provided transcript for "reliable, including retaining strong inertia." So the original assessment is accurate.)
Detailed Nuances of Disagreements: For some topics, the "range of opinions" could be slightly more refined to capture the reasons for disagreement beyond just the numerical targets. For instance, for emissions, CEC's concern is about cost and reliability if targets are too high, while WRA's argument for 90% is based on the USA and cost-effectiveness (even higher reductions can be cheaper). The current response captures this, but emphasizing the rationale behind the different opinions can always be deeper.
Commissioners' Insights: The prompt specifically mentions "commissioners." While their questions and high-level concerns (e.g., cost, reliability, unquantified impacts) are noted, a separate, more explicit bullet for their collective stance or key probing questions on each topic would be beneficial. They often serve as arbiters and their concerns highlight the core dilemmas.
~ 2% gas for peak/backup use makes sense.
And with the legislation about to come out of Congress prepare for every planned wind farm to be cancelled. Wind makes no economic sense on its own.
Why don’t the Wind Farms pay for it? It’s part of the cost of getting power from them.
Actually its the most expensive & least effective approach.
You realize that sentence makes absolutely no sense.
What about an AP-1000? You can build that now and it will be cheaper than a SMR per MW.
That is backwards. Datacenters are an excellent customer because they pull the same power 24/7. Predictable & consistent.
You say that. But you then propose wind + solar + batteries which are the most expensive solution.
Good luck with that. You get to pick two of those. Saying you’ll accomplish all three - that’s why the picture at the top is of fantasyland.
Thank you, a welcome note of sanity.
Are you high? Or bad at math?
And the heavens opened up and the angels sang as the Commissioners started to recognize reality! Hallelujah!
Really, you accepted these bozos as an intervener?
Another wonderful note of sanity.
I can tell you what the ratepayer’s view is of this tradeoff. It ain’t emissions reduction.
With off-ramps if it means skyrocketing rates.
Mr. Haye should talk to some people barely getting by about the impact of their electric bills doubling.
The CEO is not acting in the interests of the citizens of this state.
WRA talks like a trust fund baby in Boulder. No idea of reality and more than enough money to spend on everything.