State regulators play umpire in clash between Xcel Energy, counties on transmission project

Xcel Energy’s fight to overturn Elbert County’s denial of a permit for part of a $1.7 billion transmission project highlights a clash between two of Colorado’s high-wattage issues: the growing demand for electricity and local governments’ right to regulate land uses.

Xcel, the state’s largest electric utility, wants the Colorado Public Utilities Commission to allow it to proceed with plans for its Colorado Power Pathway, which will stretch across 12 counties, most in eastern Colorado. The total project includes roughly 550 miles of new lines and new and expanded substations to improve the electric grid and deliver more power from renewable energy sources. 

The Colorado Public Utilities Commission, or PUC, gave the  go-ahead in 2022 to the project that Xcel says will help it deliver more power from renewable energy and meet the target of cutting carbon emissions by 80% from 2005 levels by 2030.

The company must win approval from counties for its site plans.

But in June, Elbert County denied two land-use applications that Xcel needs to build 48 miles of lines, towers and other infrastructure. The county commissioners said the applications were incomplete and didn’t meet the county’s regulations. They also raised questions about fire risks in forested areas and building the lines farther east.

El Paso County, where Xcel wants to locate some of the lines, also turned down the company’s applications. The company has asked the PUC to reverse El Paso County’s decision as well and is suing to overturn both counties’ actions.

Some of the speakers at a Public Utilities Commission hearing Wednesday night at the Elbert County fairgrounds in Kiowa said building the lines farther east would cause less disruption because there are fewer people and the land tracts are larger. People worry about the effects on the wildlife, such as mule deer and elk.

More than 200 people showed up for the hearing attended by the three members of the PUC. Deb Gray said county residents’ aim isn’t to oppose Xcel’s entire project, but to see the company pursue an alternative route, one farther to the east of Elizabeth and Kiowa.

“While Xcel claims to have sought and considered community input, our experience has been quite different,” Gray said. “Many of us feel we have only been given the illusion of being heard and understood.”

Some residents are fighting Xcel’s move to acquire easements on their property through eminent domain. The company has said it has acquired easements on 27 properties, has started condemnation proceedings on another 13 and is negotiating on other locations.

Jessica Heaton of Kiowa said Xcel has filed a condemnation action against the property she and her husband own. “We’re fighting the lawsuit. Hopefully, we won’t have to fight the suit if these guys deny Xcel’s request,” Heaton said of the PUC.

Heaton runs a children’s camp on her 5-acre parcel. She said before the PUC hearing started that Xcel has indicated it doesn’t plan to build a tower on the easement, but hasn’t committed to that in writing.

“We’re not from a lot of money. It’s just me and my husband. We bought the property when we were 26. Losing all of our money that we’ve worked for is pretty terrible,” Heaton said.

A public utility might ask landowners to negotiate an easement, the right to access a site, based on the fair market value of the land. People should be able to continue to use the land as long as the operation and maintenance of the line isn’t disrupted, according to the Colorado Electric Transmission Authority. Xcel Energy said in an email that it makes a lump sum payment to a landowner for an easement.

If an entity can’t reach an agreement to access a parcel of land, it might go to court to pursue eminent domain, the taking of private property for a public use, said Matt Sura, an attorney who works with landowners. Roads and power lines are typically considered public purposes.

The landowner has a right to “just compensation.”  Sura said it can take months or more than a year to hash out what the compensation should be.

Xcel said it strives to work collaboratively with local communities and jurisdictions to locate utility infrastructure projects and secure the local permits needed.

At the core of what Xcel wants the PUC to do is find that Elbert County was wrong to deny the land-use applications under the county’s 1041 powers. State law gives local governments a say in planning decisions of statewide interest through the local permitting process to ensure that  impacts on local health, safety and the environment are considered.

PUC Director Rebecca White said during the hearing that state law requires the commissioners to consider various questions in deciding Xcel’s request. Those include the need for the project, the conflicts with the local land-use plan and feasible alternatives.

The PUC is expected to issue a decision by April. The commission plans a hearing on El Paso County’s permits Jan. 26 at the El Paso County Fair and Events Center in Calhan.

Xcel: Decision based on ‘animus’

Since 2000, the PUC has considered four appeals of decisions by local governments. In a 2002 appeal, Xcel Energy withdrew an application that had been denied by the town of Eaton.

In its lawsuit challenging Elbert County’s denial of land-use applications, Xcel said the decision isn’t legal because “it was based on animus toward transmission lines generally, and the Pathway project specifically.” While counties have certain authority over projects, they can’t use that authority “to effectively preclude a project that is a matter of statewide concern from coming to fruition.”

Xcel Energy said in documents filed with the PUC that it has conducted 46 public meetings on the Power Pathway project, including five virtual town halls and nine in-person public meetings in Elbert County. The utility said it evaluated more than 1,270 miles of route options in segment 5 of the project, the portion planned through Elbert County.

The options included areas farther east of its preferred route, Xcel said. The corridor chosen runs north and south to the east of Elizabeth, veers toward Kiowa, running west and east along Colorado 86, and then stairsteps down and into eastern El Paso County.

Xcel said the selected route balances the impacts, incorporates public feedback and can be located with existing infrastructure. The company said it reviewed an additional 1,699 square miles to see if there was a viable option farther east. The feasibility of building on conservation easements, technical challenges and cost concerns associated with the length of  the routes led Xcel to eliminate options in the area.

However, state Rep. Christopher Richardson, an Elbert County commissioner through 2024, said in a letter to the PUC that communities were told “in substance, that this was a ‘done deal.’ ” He said despite Xcel’s challenge of the county’s rationale for rejecting the permits, the utility previously participated in discussions about the county’s update of its land-use regulations and even made suggestions that were incorporated.

Julian Ellis told PUC members that he and his wife own a horse breeding center and that Xcel’s proposed transmission route would affect a significant portion of their property. They own Bar E Ranch Land Holdings.

“I’m not going to stand up and deny that (the project) is not needed, but there are multiple voices here,” Ellis said. “Xcel had an opportunity to engage those voices and do it in a meaningful way. Instead what they did was give us a binary decision: take it or leave it.”

Ellis, an attorney, said the state law giving counties the right to regulate land uses as part of statewide projects is intended to encourage dialogue and compromise. He urged the PUC not to give Xcel “veto power” over local elected officials by overturning Elbert County’s decision.

“Encourage Xcel to play by the rules like we all have to, sit across the table from us and find a reasonable compromise,” Ellis said.

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