Xcel Energy 2014 Annual Report Download - page 34

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Thornton, Colo. Substation Project — In October 2014, PSCo filed with the CPUC for a CPCN to construct a new substation to serve
growing load in and around Thornton, Colo. to be placed into service in July 2016. The estimated cost of the project is approximately
$34 million. The OCC and the City of Thornton have intervened in the CPCN proceeding. In November 2014, the matter was
referred to an ALJ for hearing procedures. In January 2015, PSCo and the OCC filed a settlement agreement with the CPUC
requesting approval of the CPCN. The City of Thornton did not oppose the settlement. An evidentiary hearing was held in February
2015 and a CPUC decision is anticipated in the first quarter of 2015.
Boulder, Colo. Municipalization — PSCo’s franchise agreement with the City of Boulder (Boulder) expired in December 2010. In
November 2011, a ballot measure was passed which authorized the formation and operation of a municipal utility and the issuance of
enterprise revenue bonds, subject to certain restrictions, including the level of initial rates and debt service coverage. In May 2014,
the Boulder City Council passed an ordinance to establish an electric utility.
In 2013, the CPUC ruled that it has jurisdiction under Colorado law to determine the utility that will serve customers outside
Boulder’s city limits, and will determine certain system separation matters as well as what facilities need to be constructed to ensure
reliable service. The CPUC has declared that it should make its determinations prior to any eminent domain actions. In January 2014,
Boulder appealed this ruling to the Boulder District Court. In January 2015, the Boulder District Court affirmed the CPUC decision.
Boulder sent PSCo an offer of $128 million for certain portions of PSCo’s transmission and distribution business. PSCo has notified
Boulder that its offer was deficient. Under Colorado law, a condemning entity must pay the owner fair market value for the taking of
and damages to the remainder of the property.
In July 2014, Boulder filed a petition for condemnation in the Boulder District Court. PSCo filed a motion to dismiss the petition
based upon the CPUC’s ruling that it must determine the appropriate system separations prior to Boulder filing its condemnation case.
PSCo’s motion to dismiss was granted in February 2015. This decision does not prevent Boulder from filing another condemnation
petition if it obtains CPUC approval of a separation plan.
In August 2014, PSCo filed a petition with the FERC requesting an order requiring that Boulder’s attempt to acquire PSCo’s
transmission and distribution facilities by condemnation requires prior FERC approval under the Federal Power Act. In December
2014, the FERC issued an order granting PSCo’s petition.
If Boulder proceeds with another condemnation petition and were to succeed in the eminent domain proceeding, PSCo would seek to
obtain full compensation for the business and its associated property taken by Boulder, as well as for all damages resulting to PSCo
and its system. PSCo would also seek appropriate compensation for stranded costs with the FERC.
RES Compliance Plan — Colorado law mandates that at least 30 percent of PSCo’s energy sales are supplied by renewable energy by
2020 and includes a distributed generation standard. In July 2013, PSCo filed its 2014 RES compliance plan. In July 2014, the ALJ
issued a recommended decision accepting PSCo’s compliance plan with modifications. The CPUC approved the recommended
decision with modifications in December 2014. PSCo subsequently requested additional adjustments to the CPUC’s decision, which
were granted through an order issued in February 2015.
Net Metering Standard — In a filing, PSCo proposed to track and quantify the system costs that are not avoided by distributed solar
generation, which PSCo has defined as a “net metering incentive,” for purposes of equitably recovering costs between customers. The
CPUC assigned the net metering issue to its own docket. A CPUC decision is anticipated in the third quarter of 2015.
Steam System Package Boilers and Regulatory Plan — In December 2014, PSCo filed the results of a steam survey along with both
a short-term plan and a long-term plan for the steam system consisting of a request for a conditional CPCN to construct either one or
two boilers for its steam utility, dependent on the next two seasons of winter peaking capacity. A decision is anticipated in the third
quarter of 2015.