Xcel Energy 2015 Annual Report Download - page 35
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Energy Sources and Related Transmission Initiatives
PSCo expects to meet its system capacity requirements through existing electric generating stations, power purchases, new generation
facilities, DSM options and phased expansion of existing generation at select power plants.
Purchased Power — PSCo has contracts to purchase power from other utilities and independent power producers. Long-term
purchased power contracts typically require a periodic payment to secure the capacity and a charge for the associated energy actually
purchased. PSCo also makes short-term purchases to meet system load and energy requirements, to replace generation from
company-owned units under maintenance or during outages, to meet operating reserve obligations, or to obtain energy at a lower cost.
Purchased Transmission Services — In addition to using its own transmission system, PSCo has contracts with regional transmission
service providers to deliver energy to PSCo’s customers.
Colorado ERP and All-Source Solicitation — The CPUC provided final approval to PSCo’s plan in December 2013, which includes
the following:
• The addition of 450 MW of wind generation PPAs became operational in 2015. These additional PPAs bring the installed
wind capacity on PSCo’s system in Colorado to 2,560 MW;
• The addition of 170 MW of utility-scale solar generation PPAs, of which 50 MW became operational in 2015 and the
remaining 120 MW of utility-scale solar generation is expected to be operational by mid-2016. PSCo has approximately 80
MW of utility-scale solar and approximately 258 MW of customer-sited solar generation;
• The addition of 317 MW of natural gas fired generation PPAs come from existing power plants;
• The accelerated retirements of the coal-fired Arapahoe Unit 3 (45 MW) and Unit 4 (109 MW), which occurred in 2013; and
• The continued operation of Cherokee generating station’s Unit 4 as a natural gas facility after 2017.
In addition, PSCo continues to execute on the remaining aspects of CACJA compliance including the recent completion of the new
natural gas fired combined cycle unit at Cherokee and the ongoing addition of emissions controls at the Pawnee and Hayden stations.
PSCo also retired the Cherokee Unit 3 in August 2015 and expects to retire Valmont Unit 5 coal-fired power plant by the end of 2017.
Brush, Colo. to Castle Pines, Colo. 345 KV Transmission Line — In April 2015, the CPUC granted a CPCN to construct a new 345
KV transmission line originating from Pawnee generating station, near Brush, Colo. and terminating at the Daniels Park substation,
near Castle Pines, Colo. to be placed in service by 2022. The estimated project cost is $178 million. The CPUC’s decision requires
that project construction begin no earlier than May 2020.
Boulder, Colo. Municipalization — 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 City of Boulder (Boulder) City Council passed an ordinance to establish an electric utility.
In 2013, the CPUC ruled that Boulder may not be the retail service provider to any PSCo customers located outside Boulder city limits
unless Boulder can establish that PSCo is unwilling or unable to serve those customers. The CPUC also ruled that it has jurisdiction
over the transfer of any facilities to Boulder that currently serve any customers located outside Boulder city limits and will determine
separation matters. The CPUC has declared that Boulder must receive CPUC transfer approval prior to any eminent domain actions.
Boulder appealed this ruling to the Boulder District Court and in January 2015, the Boulder District Court affirmed the CPUC
decision. The Boulder District Court also dismissed a condemnation action which Boulder had filed. The CPUC must complete the
separation plan proceeding, outlined below, before Boulder may refile a condemnation proceeding.
In July 2015, Boulder filed an application with the CPUC requesting approval of its proposed separation plan. In August 2015, PSCo
filed a motion to dismiss Boulder’s separation proposal, arguing Boulder’s request was not permissible under Colorado law. In
December 2015, the CPUC granted the motion to dismiss the application in part, holding that Boulder had no right to condemn PSCo
facilities used exclusively to serve customers located outside Boulder city limits. Other portions of Boulder’s application were not
dismissed, but are stayed until Boulder supplements its application at which time the CPUC will determine whether the application is
complete and a proceeding can continue. The CPUC ordered a discovery process to allow Boulder to obtain technical information
regarding the electric system and propose a new separation plan. Boulder is expected to refile its plan later this year. PSCo is also
challenging Boulder’s 2014 formation of its utility in a case that is now before the Colorado Court of Appeals.