Xcel Energy plans to spend $45 billion on capital investments in the next five years with about $22 billion of that to be spent in Colorado as the utility prepares for what it calls a significant shift in energy demand.
Bob Frenzel, chairman, president and CEO of the Minneapolis-based company, announced the investment plan during an earnings call Thursday. He told The Denver Post that this is the largest capital plan Xcel has ever released and that it reflects the “critical juncture that our company’s energy grid is sitting at.”
“It’s really precipitated by a historic shift in energy demand,” Frenzel said. “It’s precipitated by elevated risks of extreme weather events and of course the continuing acceleration of clean energy adoption in all sectors of the economy across the entire country.”
Frenzel said the need for more capacity on the grid is being driven by the continued electrification of homes, businesses and transportation as well as the booming demand for more power to run large computing centers as the use of artificial intelligence increases. Xcel expects a substantial portion of the growth in its data-center customers to be in Colorado.
Some of the $22 billion that Xcel foresees investing in Colorado from 2025 through 2029 has been considered by the Colorado Public Utilities Commission, including plans to boost the use of renewable energy sources and an upgrade of the state’s high-voltage system for up to $2 billion.
Energy demand in Colorado is anticipated to double in the next five years from a peak of approximately 7,200 megawatts to 14,000 megawatts, said Robert Kenney, Xcel Energy-Colorado president.
Xcel is Colorado’s largest electric utility. It provides electricity to 1.6 million customers and natural gas to 1.5 million customers, with overlaps between the two groups.
In a proposal filed Oct. 15 with the PUC, Xcel projects that the five-year investment plan will result in rate increases of about 2% to 2.5% a year for Colorado customers. “Our goal here is to do investments that are needed and to keep bills as affordable as possible,” Frenzel said.
As in the past, much of the money for the investments will be financed by internally generated cash flow, Frenzel said.
“But given the size and the scale of it, we also have to go out to the market and raise both new debt and new equity capital to fund this plan in amounts that we haven’t had to do in the past before,” Frenzel added.
Xcel has also been able to secure state and federal grants and incentives, Frenzel said. The company has received almost $500 million in grants for clean-energy projects and the Department of Energy is reviewing another $300 million in requests.
Over the past few years, the Colorado Office of the Utility Consumer Advocate has accused Xcel of burdening customers by “pancaking” rate increase requests, submitting a series of proposed hikes for natural gas and electricity service in a row. A joint legislative committee held hearings in 2023 on why heat bills from Xcel and other Colorado utilities shot …read more
Source:: The Denver Post – Business