Questions in Colorado after the big chill

No Texas-like misery, but state regulators want to know what gas utilities knew and when

by Allen Best

If Colorado’s situation during the cold spell of mid-February was not nearly as dire as that of Texas and other parts of the country, questions are being asked.

One question is whether the utilities should have seen the storm coming and taken precautions to minimize the impact to ratepayers.

But the case also poses questions about the ability of utilities to ensure reliable power as they toward carbon-free goals.

In northern Colorado, the trouble was a relative hiccup. During a 6-hour period on Feb. 14, customers of Platte River Power Authority were asked to use less electricity, such as by postponing use of clothes driers, and using less natural gas for heating by turning down thermostats a few degrees.

Why? It gets complicated.

Steve Roalstad, spokesman for Platte River, said that turbines in the Roundhouse Renewable Energy wind farm in southern Wyoming was shut down because of icing problems. Also, there was little wind. Snow covered Poudre Valley’s solar collectors.

How about natural gas? It can be used to generate electricity, as well as warm homes and heat water. Platte River has the capacity to generate 388 megawatts of electricity through combustion of natural gas.

The supply line, though, got interrupted. Platte River has an interruptible-supply contract with Xcel Energy. “As an interruptible customer, our gas supply can be curtailed by Xcel Gas in the event that overall system demand requires it,” explains Roalstad.

Platte River ceased getting gas on Sunday afternoon, then received notice the interruption had ended early Monday morning.

What electricity that was generated came mostly from the Rawhide coal-fired power plant north of Fort Collins and the coal plants at Craig, of which Platte River is a part owner.

Roalstad told the Fort Collins Coloradan that demand for electricity dropped by about 10 megawatts, roughly equivalent to the power needed for 5,000 to 8,000 households. He described the call for conservation as precautionary, well short of imminent rolling blackouts.

This poses obviously questions about Platte River’s path forward. It set a goal of 100% renewable energy by 2030. The utility consists of Fort Collins, Loveland, Longmont, and Estes Park.

The Denver Post reported weather caused Xcel Energy and Tri-State Generation & Transmission, the state’s two largest utilities, to make changes. But the major story is that Colorado was better prepared for cold weather than Texas.

“Colorado has gone through the exercise of weatherizing the system,” said Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines in Golden. “Overall, it seems that Colorado has been preparing very well.” Will Toor, director of the Colorado Energy Office, said essentially the same thing.

But while Xcel can operate its wind turbines to -22 F, the turbines don’t work when the wind doesn’t blow, as is often the case during deep cold and which was the case last week. Even so, Xcel was able to dispatch electricity to points east.

If Texas famously operates its own electrical grid, this time of un-Texas-like icicles demonstrates the interconnectedness of energy. The failure of the natural gas infrastructure caused prices of natural gas to spike from $3 an MMbtu (one million British thermal units) to $190 per MMbtu at the Rocky Mountain-Cheyenne hub.

The Post said that Xcel Energy’s Colorado subsidiary, Public Service Co., estimated it had to spend an extra $650 million because of surging prices.

John Gavan

The Colorado Public Utilities Commission almost immediately ordered a fact-collecting mission of the four investor-owned gas delivery utilities along with Xcel Energy subsidiary Public Service Steam, which delivers steam to some buildings in downtown Denver through natural gas combustion.

Commissioner John Gavan suggested a study of National Weather forecast data for the days leading up to the storm. “The question in my mind was whether there was an opportunity to act earlier to avoid the high-priced gas costs,” said Gavan at the Feb. 17 meeting.

At the Feb. 24 meeting, PUC staffer Paul Gomez described 14 questions being asked of the utilities. They range from what Gavan asked for, an understanding of what the forecast were and how the utilities responded, what they did during the crisis, and did the utilities have excess gas they were able to sell after the crisis receded.

At stake is how much the regulated gas providers–Xcel, Black Hills, Atmos and Colorado Natural Gas—will be allowed to pass along costs to customers.

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On Tuesday, in a letter sent to the PUC, Colorado Gov. Jared Polis emphasized the concern.

“It has come to my attention that as a result of the recent extreme winter conditions starting on February 13th across large parts of the country, some Colorado utilities might have purchased natural gas at exorbitantly high market prices and may now seek to pass the cost of the market gas prices along to customers…Consumers should not be expected to shoulder unexpected exceptional costs without first being advised to reduce usage,” he said.

Polis cited the steps taken by Platte River to notify their customers about conserving power and encouraged utilities to empower consumers to make decisions about their energy consumption choices. through emails and phone calls.

“As a backstop measure, if extraordinary circumstances warrant and technology allows, customers should also be able to choose whether to opt into rolling blackouts and thereby hold themselves harmless from drastic price increases,” he said.

A second, much larger question is how vulnerable utilities are to extreme weather events even in well-prepared Colorado as they deepen penetration of renewables in electrical generation.

Renewables were pilloried as the villains for the problems in Texas and elsewhere. “Poppycock,” said the New York Times, which described Texas Gov. Greg Abbott as being among the “more prominent nonsense peddlers.” Defenders pointed out that natural gas infrastructure was the greater problem, but also nuclear and even coal plants.

But the Texas problems combined with those of the Southwest Power Pool do provoke the question of what utilities and state regulators need to be thinking about as they continue down the path of decarbonization.

Seizing the moment, Colorado State Sen. Chris Hansen, a Democrat from Denver, and Sen. Dan Coran, a Republican from Montrose, used the emergency to make the case for improved electrical transmission. Hansen and Coram are co-sponsoring a bill with three major components, all of which are designed to improve transmission of electricity in and beyond Colorado.

Two Colorado electrical utilities have adopted 100% carbon-free electricity goals by 2030: Holy Cross Energy and Platte River.

Bryan Hannegan

To Bryan Hannegan, chief executive of Holy Cross Energy, I asked very specifically if this made the case for Colorado being better connected to California and other Western states through CAISO as opposed to the Southwest Power Pool. He didn’t take the bait.

Hannegan, who has a degree in meteorology, in addition to several other advanced degrees that include a Ph.D.,instead emphasized the need for both local generation as well as improved regional connections, along with improved storage and demand-management programs.

“The recent extreme cold weather event in Texas, like last summer’s heat wave in California and the West, makes the case for developing local energy resources—in addition to—having access to regionally diverse clean energy resources from an interconnected bulk power system,” he wrote.

“Local resources for power generation, energy storage, and demand flexibility are by definition more resilient than those that are grid-connected, yet few individuals or communities can meet all of their energy needs without an electric grid connection.

“We need a full portfolio of both local and regional options to ensure we can keep the lights on and the services flowing for the members and communities that we serve, especially when we consider the changing demands on our system from future weather and climate extremes.”

In Fort Collins, Platte River’s Roalstad emphasized the unusual nature of the 2021 deep freeze in that it “disrupted power and gas supplies across a large swath of the country, including Colorado.

“It will no doubt be incorporated into future planning,” he said. “How it manifests itself is difficult to predict at this point.”

Suggested reading: Wall Street Journal’s Texas Freeze: Why the Power Grid Failed

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