‘Build it, and the generation will come’

Colorado’s Power Pathway the biggest capital investment in Colorado ever for Xcel Energy. That’s not including the wind, solar and storage that the $1.7 billion transmission line will enable.

by Allen Best

Wearing white hats and wielding white spades, a line of dignitaries flung shovels of sand Wednesday morning amid the grazing lands south of Fort Morgan to mark construction of at least 550 miles of new electrical transmission lines that will loop around eastern Colorado by decade’s end.

Colorado’s Power Pathway, as Xcel Energy calls the transmission line now beginning construction, has a projected cost of $1.7 billion with possibility of a $300 million, 60-mile extension in southeastern Colorado called Longbranch.

In response to its solicitation for projects, Xcel has received 1,073 proposals for new generating resources across Colorado, but especially on the eastern plains.

This compares with the 430 proposals the company received in 2017, the last time the company asked for proposals. Before that, in 2013, the company received 55 proposals.

“This is proof that if you build it, the generation will come,” said Robert Kenney, the chief executive of Xcel’s Colorado division.

The new generation accessed by Xcel, Colorado’s largest electrical utility, responsible for satisfying well over half of the state’s electrical demand, will go far to reducing the emissions associated with electrical generation. In 2022, the company calculated that 42% of its energy came from carbon-free sources. By decade’s end, that percentage will grow to 81%.

Xcel has said intends to be totally carbon-free by 2050.

Unlike some ground-breakings, state officials were not present for the shoveling. Most all of the talking was done by Xcel executives and Duke Austin, the chief executive of Quanta Services, the general contractor the transmission construction.

“Our world is fundamentally changing, and this project, Colorado’s Power Pathway, is a sign of that fundamental change,” said Michael Lamb, Xcel’s senior vice president for transmission.

He compared the transmission to the arrival of railroads, that allowed farmers to export food to markets. “We now have an opportunity to grow and harvest energy right here and deliver it to where our customers live and work,” he said.

The Power Pathway has five segments. Somewhat confusingly, the work being launched will be for segments 2 and 3. These segments will connect from Canal Crossing, the new substation south of the Pawnee power plant, to the Goose Creek substation northwest of Cheyenne Wells, near the Kansas border. Then segment 3 extends to a proposed substation north of Lamar called May Valley. These segments are expected to be complete in 2025.

Meanwhile, beginning in 2024, work is to begin on the segment from the St. Vrain gas-powered power plant south of Greeley to the new substation located in the sandhills south of Fort Morgan and Brush.

That will leave two links to complete the loop from the Lamar area east to Pueblo and then north to metro Denver.

Everything should be a wrap by 2027. Xcel and its contractor do not foresee supply-chain issues.

Still to be determined is whether Xcel can prove need the Longbranch, extension from Lamar to the Springfield area. That question is expected to be decided by the PUC in November.

As would be expected, Xcel representatives painted a very happy face on the transmission lines that some, no doubt, will find repulsive. They talked about leases to landowners, property taxes for school districts and other local governments. and both short-term boosts in jobs and then long-term operations and maintenance jobs.

This is for the transmission itself. There will also be jobs, taxes and lease payments for the renewable generation.

An existing wind farm, the 500-megawatts Cheyenne Ridge, located near Cheyenne Wells, which was completed in 2020, has generated $107 million in land payments and $29 million in additional tax revenue for Cheyenne and Kit Carson counties, said Kenney. During construction, it had 200 workers. There are 24 ongoing jobs.

The generation in eastern Colorado expected from this wind farm is 5,000 megawatts, or 10 times the size of Cheyenne Ridge.

Then there are other community benefits. At Akron, the Washington County Fair this summer will have a new co-sponsor: Xcel Energy. The transmission line will cross 52 miles of the county.

Xcel executive also stressed state-wide benefits, hammering again and again the themes of improved reliability and affordability. They called the transmission project the largest infrastructure project ever for the company in Colorado. The closest recent comparison was Comanche 3, which was completed in 2010 at a cost of $680 (roughly $952 million today).

During the review process at the PUC, though, some stakeholders suggested that Xcel could achieve its goals with a less ambitious project, sparing the cost for ratepayers. It expects 58% of that generation to come from wind, 23% from solar. That compares with 36% from wind last year and 4% from solar.

In this span, Xcel will reduce coal from 27%, to 4%, the latter coming exclusively from Comanche 3, which is to close before calendars for 2031 are replaced.

The natural gas component will also fall from 31% of the current mix down to 15%. However, the precise mix remains to be worked out. Xcel maintains it will need the natural gas to ensure reliability, but some environmental advocates contend that the utility can achieve its goals with far less natural gas.

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