Letter objects strongly to bill being readied for late-session introduction. Most surprising was all who signed it — including one organization, Holy Cross Energy, which now has a “neutral” stance.
by Allen Best
The letter dispatched to Colorado’s legislative leaders on Friday intended a rebuke. It seemed to say “whatever in the world are you thinking?” It was implicitly directed at the administration of Gov. Jared Polis and allies.
The 64 signatories described a bill being readied for late-session introduction that would have Colorado’s electrical utilities hitting 90% decarbonization goals by 2035 as compared to 2005 levels and 100% by 2040.
The bill, if it became law, risked “driving energy costs higher at a time when our state is already nearing an affordability crisis,” said the letter.
Colorado currently requires utilities to achieve an 80% reduction by 2030, and nearly all are on track to meet or exceed that requirement. Vacant are requirements for the 2030s. The state requires 100% by 2050.
What’s going on here? Is there good cause for the angst?
What caught my immediate attention was the diversity of names and organizations. Xcel Energy and Black Hills Energy, Colorado’s two investor-owned utilities, signed it, as did about eight labor unions who can usually be found at the table in energy policy discussions — and perhaps were enlisted to the cause by the big utilities.
Tri-State Generation and Transmission, Colorado Springs, Utilities, and the Colorado Rural Electric Association.
Oh, and the mayor of Pueblo signed the letter as did a couple of pro-nuclear groups, Action Colorado, a Pueblo-based organization with members from southeastern Colorado, and Northwest Colorado Energy Initiative.
Then my eyebrows arched.
Holy Cross Energy.
And La Plata Electric Energy.
Holy Cross Energy has the boldest energy goals in Colorado. It aims to achieve 100% emissions-free electricity by 2030 for its 48,000 members in the Vail, Aspen, and Battlement Mesa areas. It’s already getting close. The electrical cooperative last year achieved 75%. That included 90% in October. So far in 2025, Holy Cross has been at 80% renewable generation.
“Holy Cross Energy expects to reach between 95% and 100% clean energy supply by 2030,” Bryan Hannegan, the chief executive, told me by e-mail on Monday.
By then, Holy Cross had sent a new letter to Colorado’s legislative leadership. It no longer asked legislative leaders to bar the bill being discussed from being introduced this late in the session. Hannegan said that after consultation with directors of the cooperative over the weekend, Holy Cross had adopted a neutral stance.
La Plata Electric was puzzling for a little bit different reason. The Durango-based cooperative has been led since November by Chris Hansen. Before his move to southwest Colorado, Hansen was a state senator whose fingerprints were on much of Colorado’s most important energy transition legislation of the last six years.
Hansen was the prime author of a bill that required Colorado’s utilities to join a regional transmission organization, a market structure for sharing electricity, by 2030. As he has explained to me, Colorado cannot afford to be an island. To achieve the proposed very deep carbon reduction goals, Colorado’s utilities need to be integrated into a market structure for sharing electricity that is bigger than one time zone, bigger than one weather event.
To help that along, he also sponsored a bill to create the quasi-governmental organization called the Colorado Electric Transmission Authority. The explicit mission is to facilitate necessary transmission that an Xcel Energy, for example, might not want to build but which will be necessary to get to 100% emissions-free electricity.
Presumably with his guidance, La Plata’s name was on the letter. Why?
“As a group,” says the letter, “we have not historically agreed on all aspects of the energy transition and have often engaged in vigorous debate on what the best path forward is for our State’s energy future. However, we come together to ask that you not grant late bill status for legislation that would preemptively advance the clean energy targets for the power sector forward a full decade, from 2050 to 2040 – not because we don’t think it may be possible to get there, but because we have to build out the framework thoughtfully, and with intention, to ensure that the energy transition doesn’t needlessly result in soaring energy costs.”
The view from one utility
Seeking clarity, I contacted Mark Gabriel, the chief executive of United Power during the last four years. Before that, he ran the Western Area Power Administration out of Lakewood for eight years.
“It’s not a rebuke, it’s common sense,” he responded when I wrote him. We talked the next day. United Power’s name was on the letter, too.
Gabriel said it’s not just that the bill is being prepared for introduction with little more than a month left in the legislative session. He shared broader concerns about whether the goals identified in the draft bill can be achieved without sacrificing reliability and affordability.
“To hit those numbers will require a lot more transmission capacity than we have. Nobody is going to turn transmission around quickly enough. Transmission and quick should never be used in the same sentence.”
The average transmission project takes a decade, he said, and long-distance transmission lines take 15 to 16 years.
True, Xcel Energy expects it will complete the Colorado Power Pathway, its 550-mile loop around eastern Colorado, by 2027, six years after its application to the Colorado Public Utilities Commission. But the resources are in one time zone and one weather system. Even if this $1.7 billion investment allows Xcel to better tap Colorado’s abundant renewable energy resources, Colorado will remain mostly an island.
Hansen, in his response to my inquiry, had also drawn attention to transmission. He said the bill as written “presents significant operational challenges for implementation. In particular, it does not address existing and future transmission constraints or Colorado’s requirement for all operators to join an RTO by 2030.”
An RTO is a regional transmission organization, or a market mechanism for sharing electricity. The Southwest Power Pool has the lead. Colorado utilities have been joining SPP’s day-ahead market, which is to begin in April 2026. Markets+, a more advanced iteration, will arrive in 2027. United Power has committed to SPP, but Gabriel doesn’t see this being the full answer, either.
What matters entirely, he went on to say, is that we’re preparing to close coal plants even as demand for electricity is on the verge of rapid growth.
“So you have demand growing one way and supply going the other, and if you overlay the change in generation mix, it becomes an impossible situation to solve. All three at the same time when only two are possible.”
Gabriel left me with this quote: “Electrons follow the law of physics. Electricity follows the law of politics.”
What exactly are the politics of this situation?
How the path has veered
In October 2023, Will Toor, the chief executive of the Colorado Energy Office, said in a Boulder County presentation that Colorado’s utilities were on pace to be at 85% to 87% emission reductions by 2030. And then in 2031, after retirement of Comanche 3, the state’s last coal plant, the emission reductions will be “north of 90%.” He pointed to the plummeting of wind and solar prices.
That was definitely true then. But the story has veered in the last 18 months. We have had utilities – most prominently Colorado Springs and Xcel – reporting supply chain kinks and other problems that have made it more difficult to get new renewable resources on-line.
Consider transformers. Costs had gone up 50% or more compared to pre-pandemic levels – and this was before President Donald Trump imposed a 25% tariff on goods from Mexico, a major source of transformers used in transmission in the United States.
We have entered a more fraught period. Six years ago, when he was still relatively new at Holy Cross, Bryan Hannegan said that getting to 85% to 90% would be relatively easy. The remaining 10% to 15% would be more difficult and likely more costly.
This week, he told me that Holy Cross was “fortunate to have procured clean energy resources through a request for proposal issued prior to the Covid-19 pandemic and resultant supply chain constraints, general inflationary increases and other cost drives that have significantly increased the costs of all forms of new power supply.”
This early start, he said, has now allowed Holy Cross to “invest in modernizing its distribution grid, protecting against cyber and physical threats, and reducing the risk of wildfire associated with our electric system, all while maintaining some of the lowest electric rates in Colorado.”
The periodic surveys done by the Colorado Association of Municipal Utilities back him up. Holy Cross, which serves some of the most affluent neighborhoods in Colorado, has some of the cheaper electricity.
Higher prices for new generation will be a “consideration,” he said, as Holy Cross continues on its journey to 100% clean energy by 2030.
Also an issue – as Gabriel pointed out – is the projected growth in demand for electricity. Looking back, there were hints of that two years ago. But then came Xcel’s filing with the PUC last October about the explosive growth, more than 60% of it caused by data centers, that it projects in years ahead. How real are those projections? That’s a multi-billion-dollar question.
Xcel Energy has closed one of its three coal-burning units at Comanche Generating Station, plans to close another this year, and is scheduled to close the third unit before the end of 2030. Photo/Allen Best
On Feb. 11, Xcel Energy sent a letter to the PUC commissioners that had an edge to it.
“We write to express our concerns about the continued skepticism around the level of resources we have identified as necessary to maintain the reliability of the current system and address the growing demand in Colorado,” said Alice Jackson, then the senior vice president for system strategy, and two others.
The letter cited concerns about “resource adequacy,” the question of whether enough electrical generation is available to meeting demands.
“The electric system is bringing on ever-increasing amounts of weather-dependent energy generation in efforts to meet energy policy goals,” the letter said. “The electric system is also losing firm generation that is available 24 hours per day, 7 days per week, and we must take sufficient actions to secure replacement for the retiring generation over the medium- and long-term. Short-term actions and patches are not solutions for the long run.”
Also at issue is which, if any, of the so-called emerging technologies will be cost effective by 2035 and 2040. Some hope for nuclear, others — including Polis‚ — see great promise in geothermal. But nobody really knows.
The Colorado Energy Office insists that the 2035 and 2040 goals identified in the legislation are not a stretch. “Colorado is on track to reach more than 85% emission reductions in the power sector by 2030 and on a path to nearly decarbonize the power sector by 2040,” said CEO in a statement.
“There is no formal draft legislation along the lines of what the letter refers to yet, but we share many of the same concerns expressed, which is why a close read of the policy framework shows strong protections for consumers and assurances for reliable electricity, which the governor hopes can be made even stronger. This is just the beginning of the conversation, and we look forward to conversations around how Colorado can continue leading the nation on reliability, cost savings on electricity, and climate action.”
Some word-parsing may be useful here. In saying there is no “formal draft legislation,” the energy office is saying that no bill is ready to be dropped into the hopper.
Whether it’s informal legislation or something else, the signatories to the letter say it “reflects little to no input” from them. This goes against the common precept of legislative sausage-making that the real work on the big bills occurs in September or at least by December before the Legislature convenes in January and involves meeting with the affected parties.
On background, I spoke or corresponded with several people quoted in this story and some who were not. I am very uncomfortable using material on background in a story in a substantial way. I will just say that there is a gulf, a substantial one, about whether efforts to solicit input have occurred and for how long.
What also must be noted is that the draft bill — or whatever we call it — that I saw explicitly contained language that gave utilities and regulators flexibility. If utilities can’t achieve the marks without endangering affordability and reliability, they’re off the hook. That, at least, is for those utilities regulated by the PUC, the arbiter of affordability and reliability.
What remains, however, is that this is just five weeks before the end of the session.
Two big, overlapping stories
So why must this bill get passed this year? Why not wait while some things settle out?
One perspective is that the utilities are now creating plans for the 2030s, the time in question. Xcel Energy’s current electric resource plan has a timeline out to 2031. Next year it is due to submit another one, going deeper into the 2030s. The energy office and allied environmental groups want the utilities to be thinking hard about what they can do to get to these targets in 2035 and 2040. And yes, it should be noted, that since 2016, Polis has put the 100% renewables by 2040 at the top of his banner.
That 100% was never written into law, however.
I see two big and overlapping stories here that will play out in various ways. One is the increasing worries about resource adequacy.
The other has to do with the inevitable tensions as we head into the last 10% to 15% that Bryan Hanegan was talking five, six and probably seven years ago.
In high school, I was a miler and two-miler. In both, we always picked up the pace in the final lap. There might be even be a little jostling, some elbows clashing as we summed the strength to get across the finish line. That’s kind of where we are right now.
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I can always easily find the annual % renewables and % fossil fuels in CO. What % renewables correlates with this “80% emissions reduction” at reasonable load levels? I take it it’s less than 80% renewables because the emissions reduction also includes reduced CO2/kWh when gas replaces coal. (It seems like gas has more upstream GHGe than coal, but we know about gassy coal mines around here. In any case it’s not counted.) I follow the Australian energy transition. They got a later start than us, but they set a target of 82% renewables target for 2030 and will probably just miss it and make it in 2032 or 2033. Unless they get waylaid by the nuclear weapon of mass distraction. Anyway, easy to measure.