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Colo. regulators open query into regional transmission coordination

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Colo. regulators open query into regional transmission coordination

To implement requirements of a recently enacted law, the Colorado Public Utilities Commission on Sept. 17 opened an investigation into the costs and benefits to electric utilities and power generators of participating in regional transmission services and energy markets.

Colorado Gov. Jared Polis on May 30 signed the Colorado Transmission Coordination Act, which directed the PUC to investigate the merits of electric utility participation in energy imbalance markets, regional transmission organizations, power pools and joint tariffs.

The act requires the commission to decide by Dec. 1, 2021, whether such participation is in the public interest and, if so, direct utilities to take appropriate action by July 1, 2022. The law was enacted in response to recent efforts to create or expand regional energy and transmission markets and foster cooperation among utilities.

For instance, Xcel Energy Inc. on April 20, 2018, announced it was dropping out of an effort by a group of electric providers in the Mountain West region to join the Southwest Power Pool RTO. Xcel Energy at that time said it saw limited benefits and a lack of market expansion opportunities for the Mountain West Transmission Group and uncertainty over the costs of joining the RTO. The group's efforts fizzled afterward because Xcel Energy, as the state's largest utility, was the lynchpin.

However, Xcel Energy and three other Colorado utilities on Aug. 30 said they are jointly studying whether to participate in either the SPP's planned, or the California ISO's existing, energy imbalance market serving the Western Interconnection. Separately, the Western Area Power Administration, Tri-State Generation and Transmission Association Inc. and Basin Electric Power Cooperative on Sept. 9 announced that they will take imbalance service from SPP when its market launches in February 2021.

As part of its new investigation (CPUC docket 19M-0495E), the PUC is asking utilities and other stakeholders to file written comments by Nov. 15 and reply comments by Dec. 15. Commissioner Frances Koncilja will conduct a series of hearings or workshops and subsequently will make recommendations to the full commission.

The investigation will broadly focus on market constructs and their impacts on wholesale and retail power rates, transmission rates, operating costs, reliability concerns, generation reserve requirements, integration of renewable energy, current and future roles of energy storage, and regional infrastructure investment, the PUC said in its decision. In addition to investor-owned utilities, the investigation will address potential impacts on cooperative electric associations, nonprofit electric corporations and other electric energy suppliers, according to the commission's decision.

The PUC said it is concerned that Colorado's limited transmission interconnection with the rest of the West and with states in SPP's footprint in the East may limit the benefits of regional markets absent significant infrastructure investment.