Get Big Pivots


Megan Gilman talks about equity, resource adequacy and other elements of her work in overseeing Colorado’s energy transition as a Colorado PUC commissioner.


by Allen Best

As has become a tradition, the Colorado Solar and Storage Association launched its annual conference in late February with a fireside chat. The conversation this year was between Bryan Hannegan, the chief executive of Holy Cross Energy, and Megan Gilman, one of three commissioners of the Colorado Public Utilities Commission.

The PUC and Holy Cross are two focal points in Colorado’s energy transition. The PUC has been tasked by legislators with implementing many provisions of the giant, decarbonized pivot. Holy Cross, an electrical cooperative largely outside of direct government purview, decided it wants to be at the forefront of the transition and has put itself there.

Gilman, a mechanical engineer by training, co-owned a solar company in the Eagle Valley for many years. She was a member of the board of directors of Holy Cross Energy that in 2017 hired Hannegan, who was then at the National Renewable Energy Laboratory.

At NREL, Hannegan had been founding director of the Energy Systems Integration Facility and co-founded the U.S. Department of Energy’s Grid Modernization Initiative.

Their conversation has been condensed and lightly edited.


Bryan Hannegan: You’re settled into the PUC three years now. How is it going? Are there things about the commission and its processes that have surprised you?

Megan Gilman: Like anything, it depends on the day. What’s surprising is the sheer number of issues, of topics, of the many tentacles of the energy transition. There is just so much going on right now.

We are also having major challenges related to gas commodity pricing. Which has been a shock to a lot of ratepayers in Colorado (and has) caused a lot of pain. It hit people who are heating with natural gas the hardest. We’ve seen those bills go up with the combination of a cold winter and very high commodity prices. Gas prices in December were about 75% over the previous December, whereas electric prices were up about 25%.

Those gas commodity prices work their way into electric rates to a much lesser extent than pure gas rates. This is really in large part (due) to the work all of you do and all of the wind and solar and storage already on the system, which really serves to kind of balance the shock of some of those commodity prices. We’re seeing a lot of that play out in real time.


Hannegan: We’ve seen that first hand at Holy Cross Energy. This last year, 2022, we just passed over the 50% carbon-free mark in our power supply portfolio. That’s roughly double from when I began in the middle of 2017.

One of the nice things about it is during Winter Storm Uri is that instead of being subject to the natural gas and the power price fluctuations, the impact on our electric bills was only about one-fifth of what we saw other utilities in the state having to experience. That was primarily due to the fact that a lot of our power supply was coming from solar and wind and other projects where there really wasn’t that fuel supply volatility. I wonder if our recent experience with gas markets and oil prices—is that another argument for the kind of things we are looking at in this energy transition?

Gilman: These are certainly important benchmarks as we plan what the system should look like. We all experienced Winter Storm Uri, which was this incredibly short-lived but incredibly intense spike in natural gas commodity prices. What we just experienced was totally different, a two-year, gradual run up that peaked in December with the bills a lot of people saw.

I think it’s testing a lot of the planning assumptions both on the gas side of the house as well as the electric side in terms of what is the window of pricing we might see as we plan resources 10 years and beyond. The potential for that (volatile) pricing is a very important part of (assessing) what looks to be the riskiest or most stable pathway forward.


Hannegan: We have community events in our area, and I hear a lot of folks coming up and saying, “You know, it’s the clean energy transition. That’s why our bills are so high.” And I said, “Did you look at what the actual cause of the bill rise is? It’s the fuel cost, and the last time I checked, the wind and the sun don’t have a fuel cost associated with them.”

Obviously we’ve got some facts and education to get out there.

I want to fast-forward to 5 or maybe 10 years from now. What do you think the electric grid, the energy system as a whole, looks like in Colorado? Paint a picture for us when your kids are in high school or college and they’re kind of cruising around Colorado going skiing. What does that feel like to them from an energy perspective?

Gilman: There’s a scenario I hope plays out, but getting back to your last question. The PUC is really focused on equity, trying to bridge that communication gap with a lot of the ratepayers. Have them understand more what do we do. How do you access us? How do you understand the proceeding that  we’re reviewing?

These PUC processes are very formalized and kind of rigid. (We) just don’t have a lot of interaction with the general public. There are not a lot of ways for them to really fundamentally understand when we’re taking on a topic that might increase their rates or make programs more available to them. Much of the work we’re trying to do in response to SB21-272 (Measures to Modernize the Public Utilities Commission) and around equity is really access to information, access to understand how the public can participate and make their voices heard.


Hannegan: Where are opportunities for folks to get involved in and have their voice be heard?

Gilman: Public comment hearings are really our main forum to have the public speak with us about topics dealt with in PUC proceedings. We’ve tried to ensure there’s appropriate language access and varying times of day. A lot of the hearings are still virtual. We literally have people on there that are saying, ‘I’m cooking dinner for my kids, then I’m going to do my two-minute comment.’ Being a parent of young kids, I can’t devote three hours to go talk for two minutes, but I can log on and kind of hang out and be there when it’s my turn.

We’re trying to look at what those points of access are, but also how we deliver information in a fair and transparent way to people so they even understand when those opportunities are coming and understand enough what the proceedings are about so that they feel like they can really contribute and make a difference.


Hannegan: What’s on the agenda this year? You’ve done some work prior in what we call clean heat. I think you were the lead on that docket. There’s more work to be done on clean energy plans. There’s a whole lot of other stuff that’s in the queue—electric vehicles, battery storage, interconnection. What would you like to have completed at the end of 2023 that maybe is not today?

Gilman: This gets to the way we work. The PUC has typically been this very reactive governmental agency. Someone brings something to us, normally the utility but it could be somebody like COSSA or some of the other state agencies. Then we respond and collect information.

That can be typically a year-long process. Things do not move incredibly quickly. A lot of that is because of due process concerns to make sure that everyone has their voice heard and it’s a fair process.

We’ve been focused on how do we take the way this agency had worked for decades, which has largely worked—and then we talked about the breadth of the energy transition, and it’s really, really profound. So many things at once. So we’re trying to be much more strategic, much more forward-looking and understand how we’re not just observers in what’s going on, but how we can help kind of drive the direction.

I think there’s just an unprecedented level of interaction of different issues. They’ve tended to be siloed. That doesn’t really serve today’s purposes. We’re trying to look hard at how we ensure we have the best path moving forward.

This year we have an Xcel electric rate case. We have a demand-side management and beneficial electrification plans for Xcel, including their strategic filing, which is kind of where they want to be going for the next four years. We expect transportation electrification plans to be filed later this year by Xcel. That will be their second (transportation filing). They’re on a three-year cycle with those.

I’ve also spent a lot of time on the gas side of the house. It came up in electricity but it was also related to the built environment and how you use energy in a home. It’s really fascinating to me especially as I see this as the early days of the energy transition for the gas sector.. What is going to happen? How is this all going to work?

The 2021 legislation implemented a clean-heat standard. That (delivers) our first greenhouse gas reduction targets for retail natural gas utilities. We had to implement rules for basically how those filings will come in, what they need to present. We took that opportunity to also set requirements for more general planning.

We found we did not have great insights into what was being planned to be spent, why, when, and what reasonable alternatives exist. We want to ensure that ratepayers are only paying for infrastructure investments that are absolutely necessary and don’t have cost-effective alternatives. We’ve made a lot of progress on that front, but we will get each of the first two filings for those coming in this year. These will be the first gas infrastructure plans ever and the first clean-heat plans. It’s going to be a lot. It should be fun and also fun to watch.

*What constitutes clean heat?

In a law passed in 2021, legislators required gas distribution utilities regulated by the state—Xcel, Energy, Black Hills, Atmos Energy and Colorado Natural Gas—to reduce greenhouse gas emissions 4% by 21025 and 22% by 2030, using a baseline of 2015.

To show they are meeting the targets, gas utilities are required to file “clean heat plans” with the commission starting in 2023. Such plans may include a mix of supply-side resource that replace traditional methane. They can also use demand-side strategies that reduce the volumes of methane that customers use.

Some examples:

  • Energy efficiency programs such as more insulation in buildings at reduced costs.
  • Recovered methane, including the gas that is captured at landfills and water purification facilities.

* Green hydrogen, where water is converted to hydrogen through electrolysis using renewable energy.

  • Beneficial electrification, which could allow you to switch from a gas furnace to an electric heat pump for heating, or from a gas to an electric stove for cooking at a reduced cost.


Hannegan: One topic that you didn’t mention, that I know is on a lot of people’s minds, is resource adequacy. That’s the notion that we will be short of the capacity we need both as a state and a region, because maybe we’re not bringing on the clean energy projects as fast as we would like and we’re retiring the fossil plans prematurely.

What has the commission done in regard to that? What do you see your role in that issue going forward given all the diverse and interested parties? How does resource adequacy interplay with the potential of a wholesale market sometime in the future.

Gilman: Resource adequacy is inherently built into a lot of our electric resource planning, the reserve margins, what the forecast looks like. A wild card in the forecasts is electrification. How quickly is that curve going to up related to vehicle electrification and heating electrification? That’s always a point of contention. What needs are we looking to fill, especially with contributions from things like the Inflation Reduction Act, which may influence customer behavior in a way we have not seen yet?

I’m passionate about looking at demand response to understand how do we make the customers part of this solution. I call myself a house hypermiler.

(Note: hypermiling is driving a vehicle with techniques that maximize fuel efficiency. Think the person driving 55 in a 75 mph zone).

So I am on time-of-use (rates) and absolutely religiously dedicated to killing all of my use in my all electric-heated home during those times.

I see a dynamic relationship between electrification paired with robust demand response to make a situation that not only works well for the utilities in terms of using customers as part of the resource adequacy equation, but doing so in a way that I think economically benefits the customers and allows them to respond to price signals.


Garfield County, solar potential story

Holy Cross Energy almost a decade ago invested in solar adjacent to the Garfield County Airport in Rifle, Colo. Last year it added storage to a solar project near the Colorado Mountain College Spring Valley Campus above Glenwood Springs. Photo/Allen Best


Hannegan: We’ve really been encouraging consumers in Holy Cross territory, of which you’re one, to adopt energy storage at their homes, at their workplaces. In fact, we’ve got a program called Power + at Holy Cross that allows basically zero-money down, 0% financing for behind-the-meter battery storage, precisely to get at the point that you made a moment ago—which is that the timing of the energy demand and supply means everything to us.

A lot of folks come to me and they say, “Well, we want to build, you know, 20-30-50 megawatts of solar,” and we say, “That’s great, but we already have enough solar during the midday peak. What I really need is solar in the afternoon when the demand is at its highest or in the morning when people are waking up and turning up their heater and cooking their breakfast and going to school.”

For us, that flexibility as a grid operator is absolutely key. We’re all about trying to get more flexibility, more grid-enabled buildings, more battery storage. We have one of the first solar-plus-storage installations anywhere here in Colorado. At least for now, it’s one of the largest. At our Colorado Mountain College campus outside Glenwood Springs, we’ve paired 5 megawatts of solar with 15 megawatt-hours of battery direct-current storage behind the meter. This is a beautiful replacement for the gas-peaking plant that we might otherwise need in order to make sure the lights stay on.

It was something that I experienced when I went to Hawaii and visited a cooperative there. Not a bad gig if you can get it. I saw that they had one of the first solar and storage systems anywhere in the country. When I saw what they could do with that to help shape their net load, I thought, “Ooh, I need one of those.”

Because of supply chains and interconnection issues and economics, it has taken three years. But we’ve gotten there. So I wonder, Megan, what we can do collectively, whether it’s the commission, whether it’s utilities, to help accelerate the rate at which we’re putting these clean flexible resources onto the grid?

Gilman: We’re realizing that what the grid looks like in 10 years, in 20 years, certain things will be necessary to operate the grid of the future.

You also need the economics to work right now. In addressing this gap between that vision and what is the ground now, we’re trying to have robust, well-informed planning processes. But it’s a struggle.

For example, once you add as much solar as we’re talking about over the next eight years, i(supply) is going to peak at a different time. It can be hard and we’re also training consumers to (consume with that supply in mind).

It’s a struggle to understand what signal to give them when we know in the future the situation will look different, especially economically and power wise, than it does right now.


This interview is contained in Big Pivots 72, an e-journal that covers the energy and water transitions in Colorado and beyond. Please consider subscribing. Donations will be happily accepted, too.


Hannegan: Let’s throw the question of energy resilience into the mix too. Because it matters not only when the power is available. Where that resource is located matters just as much when you look at integrated resource planning, both at the distribution as well as the transmission levels. How do you factor that really important element of energy resilience into the equation?

Gilman: Those planning processes have largely been seen as independent. We have our electric resource plan, which is all generator level, then you have transmission planning and, beyond that, distribution system planning, which is brand new in Colorado. We’re just finishing the first distribution-system plans with Xcel. Then we have demand-side management, which is where you deal with demand response.

The big challenge is how do you understand and properly attribute the value of different resources because, especially in our world, each proceeding has to be determined by the specific facts presented in that proceeding.

It can be really hard to do so, but that’s what the future demands of us. We have these incremental movements that feel like inches. Understanding how can you view value and operation of this broadly across all of the different proceedings is one of our most fundamental challenges. Nobody wants the monster proceeding. We all win or I’ll lose, right? You have to figure out how do we avoid an unwieldy monster situation but have appropriate avenues for the information to flow and get updated when it’s appropriate? Often we’re tied to whatever happened a year or two ago because, well, that’s all we have planned for X. That’s a fundamental challenge. We acknowledge (the challenge), but there’s no clear-cut answer.


Hannegan: Yeah, I think it would make it difficult if you were taking steps to try to build a more systematic approach, for example, a few years back. You were still with us when we approved a solar farm outside the Aspen airport and everybody was looking at me crazy saying, “Why solar in Aspen?” Property values are extraordinary and the project didn’t pencil out compared to our wholesale cost. But it was in Aspen near load (demand) that we really, really, really wanted to serve. And it has now become the anchor tenant to a much larger microgrid development that, thanks to some support from the state and we hope from the federal government as well. We’ll be able to ensure energy resilience at the upper Roaring Fork Valley based on a project that left to its own devices wouldn’t have been the least-cost power supply, but it may turn out to be the best value at the end of the day.

So I wonder, is there a way in which we can look at those planning processes that you said are very disparate and maybe somehow put a holistic wrapper around them? What would it take? Would it take legislation? Would it take changes in procedures? Is it even possible to sort-of-almost have a regular revision that was not so as intensive as what we have today?

Gilman: We have to figure out a way to do it so that we’re not constantly in the same exact type of proceeding and it never, ever ends, and you just go around in an endless loop like monkeys laughing. That your nightmare, right?

It’s finding that balance of how, with eyes wide open, do you embrace everything that you understand across all of the proceedings but not explode everything so big that it’s totally unwieldy and never ends and we all wear out.

Allen Best
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