Xcel Energy, seeking to meet an increasing demand for electric vehicles, rooftop solar arrays and heat pumps and general growth in electricity use, is proposing a $5 billion plan to improve the links between the grid and homes and businesses.
The company on Monday submitted its 443-project distribution service plan to the Colorado Public Utilities Commission, which must approve the proposal in a process that could take a year.
The investments in 35 new substations, 108 upgraded or new substation equipment, and more than 300 distribution feeders, between 2025 and 2029, would raise the average residential bill $8.71 by 2029 to $105.37 and the average small commercial bill by $10.24 to $131.
“This is being driven by increasing load growth,” Robert Kenney, CEO of Xcel Energy’s Colorado subsidiary, said in an interview. “It is a demand on the grid we haven’t seen since the advent of air conditioning.”
Xcel projects the number of electric heat pumps replacing gas furnaces will grow to 300,000 by 2030 from the current 5,000 on the system and that EVs will quadruple to 400,000 over the same period.
Residential solar is expected to more than double to 1,500 megawatts and community solar more than triple to 700 MW, which also tax the distribution system as they put extra electricity on the grid.
“We need to do more proactive investment to keep up with the unprecedented demand,” Kenney said. The plan is designed to add 3,100 MW of capacity to the distribution system which takes electricity from the high voltage grid, reduces the voltage and delivers it to homes and businesses.
“We do expect increased reliability, increased security of the grid and reduced outages,” Kenney said. “It serves multiple purposes.”
A second driver for the distribution plan is the push in Colorado to “decarbonize” the energy used in the state thereby cutting greenhouse gas emissions.
Kenney said that the company is on track to meet the state requirement that the utility cut its emissions 80% from 2005 levels by 2030, but to meet the state’s overall targets more clean energy needs to be made available to the transportation and heating sectors.
A third spur for the distribution plan is the need to create a grid that can accommodate new technology and innovation and that is in concert with other goals such as Xcel Energy’s $2.2 billion wildfire mitigation plan.
The distribution plan includes $1.7 billion for projects to replace infrastructure that is reaching the end of its useful life and is experiencing higher failure rates, $2 billion for new capacity to deliver electricity and $736 million for connecting new businesses to the grid.
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The plan is broken down among 13 planning divisions from the Western Slope, where Xcel Energy serves Grand Junction and Glenwood Springs, through the mountains and the San Luis Valley to towns on the plains including Brush and Sterling.
In the Greeley division, for example, Xcel Energy plans to develop 15 projects to increase grid capacity with five substations, nine substation banks, and 26 distribution feeders, adding about 260 MW of distribution capacity with the option to add another 700 MW in the future.
The major focus of the plan, however, is the Front Range and Denver metropolitan area. In Denver 25 projects, including nine new substations, 24 substation banks and 74 distribution feeders, will add about 750 MW of distribution capacity with the opportunity of another 800 MW of distribution capacity in the future.
For its North Metro division, which takes in fast-growing towns and neighborhoods from Wheat Ridge to Berthoud, the company is proposing 31 capacity projects.
The plan includes five new substations, 12 substation banks, and 50 distribution feeders. The projects will add approximately 500 MW of distribution capacity and create the opportunity to extend another 780 MW capacity through additional projects.
The Southwest Metro division, which includes Lakewood, Englewood and Highlands Ranch, would get 23 projects over the next five years adding approximately 440 MW of distribution capacity and create the opportunity for another 600 MW of distribution capacity in the future.
The distribution plan and the wildfire mitigation plan are part of $22.3 billion in investments Xcel Energy is planning to make in Colorado in the next five years, including a more than $12 billion plan to add utility-scale wind, solar and natural gas generation and battery storage.