Xcel Energy’s plan to scrap San Luis Valley project greeted with cheers, jeers

Xcel Energy’s announcement this week that it’s pulling the plug on a controversial and hotly contested transmission line project in the San Luis Valley is being cheered by local environmentalists but viewed with skepticism by Xcel’s partner in the project, Tri-State Generation and Transmission.

The San Luis Valley is home to the Sangre de Cristo Mountains and Great Sand Dunes National Park (Park Service photo).

Tri-State, which provides power to the majority of Colorado’s member-owned rural electric co-ops, announced it will “move forward to identify options to ensure electric system reliability following Xcel Energy’s reconsideration of its participation in a joint transmission project …”

“The need for reliable electric service across the San Luis Valley, south-central Colorado and northern New Mexico has not changed,” said Joel Bladow, Tri-State’s senior vice president of transmission. “Tri-State will examine all options to ensure reliable power for the region, and it is premature to eliminate any options without further investigation.”

A spokesman for Xcel Energy, the state’s largest power provider, told the Colorado Independent nothing has changed since the company filed its bi-annual electric resource plan and SB07-100 plan (which looks at related transmission needs) on Monday.

“We regularly look at how much energy our residential and business customers will need; it’s our job to ensure we have sufficient electricity for that demand,” Xcel spokesman Mark Stutz said.

“This year we saw lower electricity load forecasts, low natural gas prices, lack of federal carbon regulation, expiring tax credits, potential future litigation and a continued sluggish economy. Our conclusion, in light of these factors and also to keep costs low for our customers, is to re-consider our participation in the Southern Colorado Transmission Improvements Project.”

The project had already been approved by the Colorado Public Utilities Commission (PUC) but was opposed by local conservation groups worried about the scenic San Luis Valley becoming an industrial hub for utility-scale solar plants. The groups advocate for more distributed solar generation on residential and commercial rooftops across the state.

“Xcel has made a smart decision that will save rate payers $500 million and preserve one of Colorado’s last undeveloped wild-land corridors,” said Ceal Smith, founder of the San Luis Valley Renewable Communities Alliance. “Energy technology and market trends all point to a leaner, cleaner and smarter decentralized utility system in the future.”

Smith said she wants Tri-State and state regulators see the light as well.

“We hope the PUC and Tri-State support Xcel’s decision and start to look more seriously at the San Luis Valley’s abundant and diverse solar, micro-hydro, geothermal and biomass resources to meet local energy reliability needs,” Smith added. “We want a more secure, efficient and democratic energy distribution system that benefits our local communities, not just a few big corporations.”

Xcel’s Stutz said the company had projected that by 2018 Colorado would need 2,000 megawatts of additional power, but in its filing on Monday dropped that forecast to 292 megawatts.

“There is not a great need for new generation period,” Stutz said, “thus lessening our need to participate in the transmission line project.”

Officials for Trinchera Ranch, owned by hedge-fund billionaire Louis Bacon, were cautiously optimistic about Xcel’s decision this week. Bacon has been the project’s biggest opponent, battling against it at every turn because it would cross the land he bought from Steve Forbes. But Bacon also has invested heavily in Minnesota-based Xcel.

“Trinchera Ranch remains committed to fighting for a win-win solution for the people of the valley that helps to improve energy reliability, bolsters renewable energy and conserves and protects this spectacular region of Colorado,” Trinchera Ranch spokesman Cody Wertz told the Valley Courier in Alamosa.

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