Colorado’s biggest wind farm gets green light

September 09, 2016 / Posted in Denver

Cathy Proctor
Denver Business Journal

Xcel Energy Inc.’s proposal for a massive, $1.1 billion 600-megawatt Rush Creek wind farm and 90-mile transmission line in eastern Colorado was approved Friday by the Colorado Public Utilities Commission.

The three commissions on Friday verbally approved a settlement Xcel (NYSE: XEL) announced in early September in support of the Rush Creek wind farm and power line as well as for another major transmission line. The wind farm will generate enough power to meet the needs of about 180,000 homes in Colorado.

PUC Chairman Joshua Epel on Friday said he was pleased by the settlement’s broad support “that significantly increases renewable energy in the state, will be a driver of economic development in rural Colorado and helps sustain the renewable energy supply chain that has matured in Colorado, to support renewable energy in the state and a project that will be an economic driver in Colorado.”

The commissioners didn’t make any changes to the settlement and wholly rejected a list of concerns raised by the Ratepayers Coalition over the project, including whether it was good for taxpayers, whether Xcel was rushing the project through the process and environmental concerns.

The conservative Independence Institute in July had called for more time to evaluate the project’s economics and environmental impacts.

David Eves, the president of Xcel’s Colorado operations, told the Denver Business Journal he also was pleased with the commissioners’ decision. Xcel will develop, own and operate the wind farm.

“This is a great project for Colorado, the environment and our customers. This is a big day for what will be the state’s biggest wind farm,” Eves said.

Xcel has contracted with Vestas Wind Systems, the Danish wind turbine company with four manufacturing plants in Colorado building towers, blades and nacelles, to supply the turbines the Rush Creek wind farm will need. The two companies have an agreement for Vestas to supply up to 300 of its V110-2.0 MW wind turbine model for the Rush Creek project.

Vestas currently has nearly 4,000 employees in Colorado.

The Rush Creek wind farm will be built on 116,000 acres in parts of Arapahoe, Cheyenne, Elbert, Kit Carson and Lincoln counties. Pending approvals from some of the counties, construction is expected to begin in late 2017, with anticipated commercial operations set for late 2018.

At Friday’s hearing on the settlement, PUC Commissioner Frances Koncilja called Xcel’s proposal “very forward thinking and creative. The settlement that the parties worked on was good … Colorado citizens will be well served by this.”

Western Resource Advocates applauded the PUC’s decision, saying the wind farm is expected to save customers up to $443 million over 25 years because Xcel won’t have to purchase coal or natural gas to produce power.

“This new wind project continues to chart a path for Colorado’s clean energy transition, while ensuring affordable energy for everyone,” said Gwen Farnsworth, the environmental advocacy group’s senior energy policy advisor.

As part of the Rush Creek wind farm, Xcel also will accelerate construction of the Pawnee-Daniels Park power line to ensure that it’s in service in October 2019, three years ahead of its originally scheduled in-service date of 2022.

And a second transmission line also will be built as part of the settlement agreement approved Friday.

That second transmission line, expected to cost about $178 million, will run 125 miles from Xcel’s Pawnee Substation near Brush in northeastern Colorado to the Daniels Park Substation south of the Denver metro-area. The new, 345-kilovolt power line would cross Arapahoe and Douglas counties, the city of Aurora and the town of Parker.

Rush Creek wind farm and both power lines are part of Xcel’s long-range plan, dubbed “Our Energy Future,” which expands the amount of renewable energy the utility has online in Colorado.

The wind farm plus the 90-mile transmission line is expected to cost about $1.036 billion to build.

Of that total, $915 million is the estimated construction cost of Rush Creek wind farm. The 345-kilovolt transmission line will cost an estimated $121.4 million, according to Xcel’s filings with the Colorado Public Utilities Commission (PUC).

The agreement caps the cost of the project at $1.096 billion. It also provides for a sharing of cost savings between customers and the company if capital costs are less than the capped amount.

Xcel officials had said the utility needed an approval from the PUC by November in order to obtain 100 percent of the federal wind “production tax credit,” or PTC, which is worth $23 for every megawatt hour of power produced during the wind farm’s first 10 years of operation.