Despite remaining questions, the Colorado Public Utilities Commission agreed Wednesday to back a big portion of projects that Xcel Energy wants to pursue before federal tax credits for renewable sources expire.
The PUC previously approved Xcel’s request to fast-track approval of wind, solar and energy storage projects to take advantage of federal incentives before they’re eliminated in the coming years. The PUC staff, the Colorado Energy Office, the Office of the Utility Consumer Advocate, and trade and environmental groups supported the company’s request.
But the state agencies and other supporters called on the PUC to reverse a decision to require more analysis of costs and benefits before giving the go-ahead for some of the proposals. They said any delays could threaten Xcel’s ability to qualify for the federal tax incentives before the deadline, driving up the cost of new energy facilities and costs for customers.
Xcel has said its proposed portfolio of projects could unlock approximately $5 billion in federal tax credits. The company said the more detailed analysis sought by regulators could delay the process and jeopardize landing the incentives.
The PUC voted to approve Xcel’s pursuit of 3,196 megawatts of mostly renewable energy projects. A 200-megawatt natural gas project is also planned.
Members will consider two more projects April 2, when Xcel is expected to provide more information. Approval of those two would increase the total new generation to 3,800 megawatts to 4,100 megawatts.
One megawatt can power a few hundred homes, depending on location, efficiency and other variables.
The PUC expressed concerns about the costs and benefits of locating the energy projects outside of metro Denver, versus inside the metro area. Members wanted more information about transmission lines needed to deliver power from more remote facilities.
PUC Chairman Eric Blank proposed locating more of the solar and storage facilities in the metro area to ensure delivery of enough power once all the state’s coal plants are closed as scheduled by the end of 2030.
Members Tom Plant and Megan Gilman warned that waiting for more data on transmission needs could cost Xcel the opportunity to receive federal incentives.
“We can’t allow the possibility of the tax benefits going away because we’re going to end up paying for that in the long run,” Plant said.
Gilman acknowledged that “the hardest thing of this process is the list of things we don’t know.”
“But that’s in part a result of the situation we’ve been put in, with this very fast wind-down of federal incentives, which directly impacts the costs of these resources,” Gilman said. “Every indication is that we will need more resources in the time to come. Even given these changes in federal policy, renewables still appear to be the cheapest.”
The most dramatic price increases have been for natural gas, Gilman added.
A tax and spending bill pushed by the Trump administration and passed by Congress in 2025 speeds up the phasing out of Biden-era federal tax credits for renewable energy projects. Under the law, wind and solar projects qualify for the tax credits of up to 30% only if construction starts before July 5 or they are placed in service by Dec. 31, 2027.
Xcel said it received more than 160 bids in response to requests for proposals for the energy projects.
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