A group of public power communities in Colorado and the Municipal Energy Agency of Nebraska recently filed a complaint against investor-owned Public Service Company of Colorado at the Federal Energy Regulatory Commission saying that they should not have to be on the hook for costs associated with a Public Service Company of Colorado transmission project.
The Feb. 16 complaint was filed by the Municipal Energy Agency of Nebraska, the City of Aspen, Colorado, the City of Glenwood Springs, Colorado, and the Town of Center, Colorado regarding Public Service Company of Colorado’s proposal to build the Colorado Power Pathway, an approximately $2 billion “local” transmission project whose costs will be recovered by Public Service from its retail and wholesale customers, including Aspen, Glenwood Springs and Center.
Municipal Energy Agency of Nebraska is a not-for-profit wholesale power supplier that provides wholesale electricity and related services to more than 60 participating communities in four states, including Aspen, Glenwood Springs, Colorado, and the Town of Center.
Public Service will recover a portion of the costs of the Power Pathway from its wholesale transmission customers, including Aspen, Glenwood Springs and Center, as part of transmission service rates recovered through its Network Integration Service Agreement between the Colorado cities and town and Public Service.
As a Commission-jurisdictional agreement pursuant to a Commission-approved tariff, the rates charged to the two Colorado cities and the town pursuant to Public Service’s Open Access Transmission Tariff and in the Network Service Agreement are required to be just and reasonable, the complaint noted, and the Colorado cities and town must pay those rates unless they are determined by the Commission to be unjust and unreasonable or unduly discriminatory.
The Power Pathway was developed by Public Service to unlock clean energy resources in its designated Energy Resource Zones necessary to meet the utility’s 2030 clean energy target mandated by Colorado Senate Bill 19-2365 and to advance the state of Colorado’s efforts to meet 2025 and 2030 economy-wide greenhouse gas emission reduction goals mandated by Colorado House Bill 19-1261.
But the Colorado cities and town are not subject to the mandates set forth in Senate Bill 19-236 or House Bill 19-1261. Therefore, Aspen, Glenwood Springs and Center, “have no need for, nor do they have any intention of accessing, the clean energy resources to be connected to the electric grid by the Power Pathway.”
In fact, the two Colorado cities and the town “have already made significant investments in their own transition to carbon-free resources, with two of the three cities already serving their customers with 100% renewable resources,” the complaint said.
While the Power Pathway is located in the eastern half of Colorado, the Colorado cities and the town are located in west and south Colorado, in the area of Colorado known as the Western Slope, a significant distance from the Power Pathway.
In fact, the Colorado cities and the town “do not anticipate having any direct connections with the Power Pathway and as they are served by lower voltage transmission facilities, are unlikely to see any benefits from the addition of the Power Pathway to the grid.”
The Colorado cities and the town “have not been shown to receive any benefits at all from Power Pathway, either from a generation or transmission perspective.” Yet they are expected to bear a portion of the costs that creates a significant rate impact for their customers, the complaint said.
The rates for transmission service to be charged to the Colorado cities and town under their Network Service Agreement pursuant to the Public Service OATT, as projected by Public Service, will more than double from 2023 to the end of 2027, the same timeframe as much or all of the Power Pathway will be constructed, placed in-service, and put into rates.
At the end of 2027, the Colorado cities and the town will be paying more than double (114% based upon Public Service’s projections) for the same transmission service they have today, serving the same load they have today, using the same generation resources they have today, and using no renewable resources enabled by the Power Pathway, the complaint said.
Other wholesale customers of Public Service who choose to secure renewable generation through the Power Pathway and who choose to use the Power Pathway to advance towards a carbon-free resource mix, as the Colorado cities and town have already done, will pay the same rate as the Colorado cities and town to cover the costs of the Power Pathway.
“In addition, the renewable generation whose connection will be enabled by the Power Pathway will bear none of the costs associated with Power Pathway, nor will any of the likely beneficiaries of the Power Pathway who are not Public Service customers,” the complaint said.
This is not just and reasonable and is unduly discriminatory for the Colorado cities and town, it said.
As a result of the inclusion of the costs of Power Pathway in the rates charged in the Colorado cities and town’s Network Service Agreement, “it is no longer just and reasonable and is unjust and unreasonable and unduly discriminatory. The Commission must require revision of the Network Service Agreement to remove responsibility for costs associated with the Power Pathway or require Public Service to create in its OATT a separate cost allocation zone or rate mechanism within Public Service’s wholesale footprint” for the Colorado cities and town where the costs of Power Pathway are excluded from wholesale transmission rates.
“In addition, the Power Pathway project must be either a regionally beneficial project providing regional benefits -- which should be planned and cost-allocated as such -- or it is a project benefiting Public Service’s retail customers and should be paid for as such,” the complaint said.
“Because the project addresses state-wide public policy directives, the best way to address those directives should have been, and originally was, by planning for transmission to address the state law requirement through a Commission-approved regional planning process where appropriate benefits and beneficiaries would be determined,” the complaint said.
“Inexplicably, although originally it reviewed project alternatives through the WestConnect subregional planning committee, Public Service later removed it from regional consideration and regional cost sharing and submitted the Power Pathway to the Colorado Public Utilities Commission for approval of a Certificate of Public Convenience and Necessity as a locally needed transmission addition to support state policy objectives. In so doing, Public Service violated its Commission-approved OATT, including both the local and regional planning requirements.”
Public Service’s actions “violate Commission policy and judicial precedent regarding transmission planning and cost allocation,” the complaint said.
Public Service “has not properly determined the benefits and beneficiaries of the Power Pathway, has not properly assigned costs to those beneficiaries, including those generators who will be provided access to the electric grid through construction of the Power Pathway, and has improperly assigned costs through its OATT and wholesale transmission service agreements to entities who neither need nor benefit from the Power Pathway” such as the Colorado cities and town.
The Commission is obligated under the Federal Power Act to ensure just and reasonable and not unduly discriminatory rates for wholesale customers such as the Colorado cities and town, according to the complaint.
FERC Asked to Issue Order Addressing Costs
The Colorado cities and town asked FERC to issue an order declaring the Network Service Agreement of the Colorado cities and town is no longer just and reasonable, and is unjust and unreasonable and unduly discriminatory, as it relates to the assignment of costs associated with the Power Pathway to the Colorado cities and town and requiring modification of the Network Service Agreement to remove responsibility from the Colorado cities and town for any costs associated with the Power Pathway.
They also want FERC in the order to:
- Declare that assignment of any costs of Power Pathway to the Colorado cities and town violates cost causation precedent and requiring the establishment by Public Service of a separate pricing zone for Colorado Cities wherein none of the costs of Power Pathway are included;
- Declare Public Service violated its filed OATT, Order No. 890 and Order 1000, etc. in its planning and study analysis of the Power Pathway.
In addition, FERC should require Public Service to have the Power Pathway re-evaluated through WestConnect’s Commission-approved regional planning process to determine whether Power Pathway is the proper solution to the identified public policy needs and to determine all benefits and beneficiaries of the Power Pathway, the cities and town said.
This will “ensure the prudence of Power Pathway as a solution to the claimed transmission needs and to ensure that the beneficiaries, including generators, are assessed costs commensurate with the benefits received on a regional and local basis and to ensure that those for whom Public Service or WestConnect does not or cannot substantiate benefits from the project are not assigned costs as such an assignment would be in contravention of cost-causation precedent,” the complaint said.
FERC should require the costs of Power Pathway, if it is determined to be the appropriate regional solution, that would be allocated to wholesale customers across the region, be allocated commensurate with benefits and in accordance with the WestConnect Commission-approved regional planning process, the complaint said.
