Docket No. 24A-0442E, Xcel Just Transition Solicitation

Perhaps more than any proceeding the PUC has ever presided over, Xcel Energy’s Just Transition Solicitation will have a profound and lasting effect on Colorado’s energy future for decades to come. The seismic transformation of the state’s energy landscape and the projected exponential increase in the amount of electricity needed to power it demands strong and creative leadership to ensure that any buildout of new generating resources furthers Colorado’s progress on decarbonization and protects consumers from costly mistakes. Without that leadership, we risk backsliding on emissions reduction goals and, more importantly, locking millions of Coloradans into higher bills and very likely stuck paying off billions of dollars in debt for stranded, outcompeted and obsolete fossil fuel assets.

For these reasons, we, the undersigned legions of Coloradans who are counting on the Commission to do the right thing, for us and for generations to come, submit the following comments in this proceeding.

Xcel’s proposals in the Just Transition Solicitation are unprecedented, both for the massive amount of new resources the utility says it must bring online in the timeframe around the closure of the Comanche plant and for the utility’s proposal to create a new mechanism outside of what is permitted in resource planning to charge customers for speculative testing of experimental ways to meet ever-growing demand beyond the planning horizon of this ERP – essentially a slush fund for early development.

In its initial filing in October, Xcel said it faces exponential growth in demand for electricity, mainly due to projections for the massive power needs of data centers and artificial intelligence that are expected in Colorado, and to a lesser extent, to account for increased demand from building and appliance electrification and growth in sales of electric vehicles. All told, Xcel said it expects in the range of 10,000 megawatts (MW) to 14,000 MW of new demand for electricity by the time Comanche is fully closed. To put that in perspective, Xcel’s entire portfolio of wind, solar, gas and coal generating capacity in Colorado is currently only 6,200 MW.

While we agree that a significant expansion of generating capacity is needed, it appears that much of the growth Xcel is projecting is speculative. There is no pile of contracts in place requiring the utility to provide power for data centers, and as was demonstrated in January with the unveiling of DeepSeek, artificial intelligence development is subject to major disruptions that can completely upend the market and future planning. Given the lack of statewide policy guiding data center growth and major unknowns about the industry and scope of development aimed at Colorado, the Commission must take an incredibly conservative approach to approving new resources. It must protect consumers from overbuilding, and it must ensure that the costs of new generation and transmission, if they are meant to serve data centers and AI, are borne by those industries and not shifted on to residents and businesses. 

It is encouraging to see Xcel continue to aggressively pursue renewable energy and battery storage as the main sources of new generation, but the sheer size of its projected growth also means it is planning significant new fossil gas expansion. While the percentage of new gas may be smaller than wind and solar by comparison, in terms of raw capacity what Xcel is planning could still add thousands of megawatts of polluting gas plants. That is unacceptable – from an air quality perspective, from a public health perspective and from a climate protection perspective. We cannot sacrifice the state’s future to satisfy a utility’s uncertain business plan.

The good news is that there are alternatives for new generating resources that put Colorado firmly on the path to a non-carbon, non-contaminated future. Think tank Energy Innovation has spent the past six months developing and modeling an energy park concept for the Comanche site. The energy park would pair large-scale solar and wind installations both in Pueblo County and across southeast Colorado with battery storage and advanced thermal storage at the current plant site to ensure flexible 24/7 power and sustainable industrial development in the city. Energy Innovation calculates that the energy park could generate more than $40 million in annual property taxes in Pueblo County and create more than 350 permanent jobs directly associated with the facility, and even more when accounting for additional jobs at co-located industries.

Development of the energy park could begin long before Comanche closes in 2031 and be built in phases to align with rising demand. Cost of the buildout would be around 30 percent lower than advanced nuclear (as proposed by the Pueblo Innovative Energy Solutions Advisory Committee, which actually was not innovative at all since it set its sights on nuclear and ignored better alternatives). More importantly, the energy park is based on tried and tested commercially available technology, not unproven and experimental power sources like small modular reactors or carbon capture and storage, which may take well into the late 2030s to develop, if ever.

In Xcel’s last ERP, the Commission approved a significant expansion of the utility’s gas generating portfolio, allowing it to build 628 MW of new capacity – even more than the company had requested – a decision that ignores basic economics. 

First, methane gas is subject to volatile swings in market pricing, especially during severe weather events. As the Commission documented in Docket No. 21A-0192EG, the cost of gas used by Xcel during Winter Storm Uri in 2021 spiked by $263 million, a cost that was later passed on directly to customers. As Coloradans, we know that severe weather is a fact of life, and similar circumstances are a near guarantee in the future. The best way to insulate customers from future spikes in their electricity bills is to keep gas out of the electric generating mix.

Gas-burning power plants will cost hundreds of millions – or given the scope of what Xcel is proposing in the JTS, billions – of dollars to build, and once built, Xcel customers will be on the hook to pay them off for decades to come, even if they are used minimally because renewables are so much less expensive. In an apples-to-apples comparison, wind and solar are the most economical options for new energy resources. The low cost for windpower is $27 / megawatt-hour (Mwh), for utility-scale solar it’s $29, and for combined-cycle (basedload) gas, it’s $45 / MWh. For gas peaking plants, the levelized cost of energy (LCOE) is $110 / MWh. Even when paired with battery storage to firm renewable resources into power 24/7 capacity, the cost of power is half that of a gas peaking plant.

The Commission has a preview of renewables’ pricing superiority in the resource planning docket it is currently considering for Tri-State Generation and Transmission, Colorado’s second largest power provider. In response to Tri-State’s request for proposals, the median price for the short-duration storage came in at one-third the cost of gas plant proposals ($11.62 per kilowatt-month vs. $33.84 / KWmo).

Finally, regarding Xcel’s proposed slush fund, we implore the Commission to read between the lines and see this proposal for what it really is: an attempt to continue squeezing more money out of customers by passing along all the risks to them while reaping the benefits for shareholders. The utility claims in its filing that new resource planning “tools” are needed to navigate a complex mix of requirements around cutting carbon emissions, meeting growing demand, and maintaining reliability. We find that argument utterly disingenuous. Xcel has all the tools it needs to plan for the future. The company is free to test, experiment, analyze and study whatever new developments it wants in order to evolve and keep up with the times. That’s a cost that, as with any company, should be paid by the shareholders who will benefit from throwing things against the wall to see what sticks.

Rather than locking Coloradans into a future of expensive and unpredictable gas prices or burdening future generations with the radioactive, costly and dangerous legacy of nuclear, the PUC should focus on scaling up renewable energy resources paired with short- and long-term storage as the most cost-competitive resource for new power. This is the only logical path for the state to meet its growing energy needs while also reducing carbon emissions and keeping rates reasonable. 

Respectfully submitted into Docket No. for the Commission’s consideration.

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1. Direct Testimony of Jack W. Ihle on behalf of Public Service Co. of Colorado. Oct. 15, 2024.

2. Direct Testimony of Justin Tomljanovic on behalf of Public Service Co. of Colorado. Oct. 15, 2024. Page 56

3. Xcel Energy Form 10-K, Annual Report for the year ended Dec. 31, 2024, filed with the Securities and Exchange Commission. Page 23.

4. Energy Innovation. Flexible, Clean Industry and Sustainable Energy Power Strong Economies: A case study in Pueblo, Colorado. April 2025

5. PUC Decision No. C24-0052 in Docket No. 21A-0141E.

6. See Colorado PUC, “Impacts of Winter Storm Uri.”

7. See Lazard Levelized Cost of Energy (LCOE), Version 17. June 2024

8. Tri-State Generation & Transmission Association 2024 Solicitation 45-Day Report (Public Version) in Docket No. 23A-0585E.

9. Jack W. Ihle summary testimony.