Xcel Energy has filed a settlement agreement with regulators, renewable energy advocates and other intervenors that, if approved by the Colorado Public Utilities Commission, would allow Xcel to build and operate one of the largest wind farms in the state and speed up construction of a 125-mile transmission line to bring power from eastern Colorado to the Front Range.
Unlike earlier wind deals, which Xcel pursued to meet renewable energy requirements, the utility wants to build this project because it will provide cheaper electricity than other alternatives.
This would be the first time Xcel builds, owns and operates its own wind farm.
“We believe the settlement announced today, if approved, is a no regrets step towards more renewable energy for Xcel Energy customers and the state of Colorado,” David Eves, president of Xcel Energy Colorado said in a press release. “Rush Creek will provide low-cost energy to our customers, and it adds a clean, renewable generation resource to the state that will help us meet potential federal and state air quality mandates.”
Barack Obama’s Clean Power Plan is on hold pending the outcome of lawsuits, but Gov. John Hickenlooper is considering his own executive order to encourage faster reductions in greenhouse gas emissions. Compliance with either proposal would involve bringing more renewable energy online and decommissioning coal and natural gas plants.
The Rush Creek project puts Xcel in a better position if either plan is adopted, and moving forward quickly allows Xcel to take advantage of federal wind production tax credits whose renewal is always uncertain.
Reaching a settlement agreement with intervenors makes it more likely the project could get underway soon. Xcel hopes to start construction in 2017, with the wind farms to be operational in 2018.
The parties to the settlement, which was filed on Friday, include the staff of the Colorado Public Utilities Commission, the Colorado Office of Consumer Counsel, the Colorado Energy Office, Tri-State Generation and Transmission Association, CF&I Steel, Interwest Energy Alliance, Colorado Energy Consumers, Southwest Generation Operating Company, Western Resource Advocates, Rocky Mountain Environmental Labor Coalition and Colorado Building Construction Trades Council, AFL-CIO, the Colorado Independent Energy Association, the city of Boulder and the city and county of Denver.
The $1.036 billion deal would add 600 megawatts of wind power — roughly enough for 280,000 homes — to Xcel’s existing 2,650 megawatts of wind power that it buys from others producers. The wind farm itself is estimated to cost about $915 million to build, while the transmission line would cost about $124 million.
The PUC had given approval to Xcel to build the transmission line for 2022, while the settlement agreement calls for the transmission line to be operational several years earlier.
The 345-kilovolt transmission line would carry power between Xcel Energy’s Pawnee Substation near Brush and the Daniels Park Substation south of the Denver metro area and run through Arapahoe and Douglas counties.
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