Xcel Energy Inc. Chairman, President and CEO Ben Fowke thinks that Colorado regulators have plenty of reasons to support the ambitious renewable energy plan proposed by Xcel subsidiary Public Service Co. of Colorado.
"The reality is, we're talking about saving customers money while replacing a coal plant and improving the environment," Fowke said July 26 during a call to discuss Xcel Energy's earnings for the second quarter. "I'm really excited about it and I have to believe our commission's really excited about it too."
Under the Colorado Energy Plan filed with the Colorado Public Utilities Commission in June, Xcel Energy will use wind, solar and battery storage to supply most of the electricity needs of its Colorado customers by 2026. Through Public Service Co. of Colorado, Xcel Energy proposed to add 1,100 MW of wind, 700 MW of solar and 275 MW of battery storage. The plan also calls for Xcel Energy to retire 660 MW of coal generation by shutting down the coal-fired Comanche units 1 and 2 in Pueblo, Colo., about 10 years early.
Xcel Energy would own 500 MW of the proposed new wind generation and acquire 380 MW of existing natural gas generation while building new transmission lines, for a total investment of about $1 billion, Fowke said.
Fowke said the plan would save ratepayers more than $200 million while reducing carbon emissions in Colorado by 60% by 2026 from a 2005 base level.
A decision from the commission is expected in September. If the commission approves the proposal, Xcel Energy expects to fund the Colorado Energy Plan with a combination of internally generated funds, incremental debt and $300 million to $400 million of equity, Fowke said.
He said Xcel Energy is on track to have more than 10,000 MW of wind on its system by 2021. Approval of the Colorado plan would increase the company's overall wind capacity to about 11,500 MW.
Rate case movement to come
Meanwhile, Xcel expects the third quarter to bring developments on electric rates in Colorado, Texas and New Mexico, CFO Robert Frenzel said.
In Colorado, Xcel Energy is looking at two different timing options for an electric rate case for its Colorado subsidiary.
While prepared to file its request in the fall, with rates going into effect in mid-2019, Xcel Energy is working with parties on a possible alternative that would push back filing of a rate case until spring 2019, with rates taking effect in early 2020, Frenzel said. More clarity on that issue should come in the next few months.
In Texas, Xcel subsidiary Southwestern Public Service Co. reached a settlement under which there would be no change in rates as the company will use the benefits of tax reform to offset a projected revenue shortfall, Frenzel said. The company also committed to file a rate case by the end of 2019, the same time that its 478-MW Hale Community Energy wind project is expected to go into service. The Public Utility Commission of Texas is expected to make a decision on the settlement in the third quarter.
In New Mexico, Southwestern Public Service is awaiting word from the New Mexico Public Regulation Commission for its proposed $27 million revenue increase. A hearing examiner in June recommended a $12 million increase. The company expects a decision from the commission in the third quarter.