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Xcel Energy looks to bolster community resilience through Colo. microgrids

Up to 15 MW of battery-based microgrids could be coming to public locations in Colorado at an expected cost of approximately $23.4 million via a "community resiliency" initiative being undertaken by a subsidiary of Xcel Energy Inc.

Public Service Co. of Colorado already has determined the seven sites for battery energy storage systems deployment: Denver International Airport Automated Guideway Transit System, National Western Center, Denver Rescue Mission's Lawrence Street Community Center, the City of Arvada Center for the Arts and Humanities, the Town of Nederland Community Center, Summit County Middle School and Alamosa Family Recreation Center.

All of the locations, which were selected from a pool of 20 potential project sites, either provide a crucial service or serve as a hub for emergency community needs.

According to a chart included in public testimony of Xcel Energy Services Inc. business technology consultant Charles Gouin filed with the Colorado Public Utilities Commission, none of the projects' lifetime benefits will exceed the estimated costs. However, Gouin said that is due, at least in part, to the "inherently hard to value" nature of emergency back-up power and therefore should not be considered a deterring investment factor.

"These low cost-benefit ratios are not, in my view, a cause for concern as they might otherwise be in a different context," Gouin wrote.

Gouin also argued that his company could have assigned a greater intrinsic value to battery-based systems because they can "offer unique value over standard back-up generator systems."

"This is largely due to the potential to extend the duration of back-up power two to three times that of a normal system by utilizing the solar plus storage asset and extending fuel supply," Gouin said.

Under the plan, the utility will own and operate the battery energy storage systems and associated equipment such as interconnection hardware. The owners of the selected sites will provide solar or fossil fuel generation assets that will be incorporated into the microgrid.

Pending regulatory approval for cost recovery, construction on the projects will begin in January 2021 and wrap up in the summer of 2022, according to the filings. (Colo. PUC Docket 19A-0225E)