Colorado regulators call Xcel’s grid data ‘totally useless,’ question if utility will comply

Recently, Xcel filed a proposal with the Minnesota PUC to build the  Midwest’s largest battery energy system (BESS) facility at the Sherco Energy Hub.

While determining the extent and manner of the utility’s future investments in Colorado’s distribution system, the Colorado PUC emphasised the importance of allowing flexible operation of load and generation from distributed energy resources (DERs) to reduce the costs associated with distribution system investments.

The decision was heavily influenced by recommendations from the 501(c)(3) nonprofit Interstate Renewable Energy Council (IREC). IREC says it exemplifies how the PUC leverages its regulatory authority to prevent monopoly utilities from obstructing clean energy deployment.

Xcel’s ‘totally useless’ hosting capacity analysis

The grid transparency sections of the decision focused on Xcel’s hosting capacity analysis (HCA). This map-based tool offers a snapshot of the electric grid’s conditions, showing where new generation or load can be added safely without expensive and lengthy upgrades to infrastructure.

This data aids in project siting by highlighting less constrained areas of the grid, helping developers choose locations with higher chances of economic success.

Xcel was initially instructed in 2021 to allocate ratepayer funds for developing an HCA. However, the data it released was “plagued with issues”, making it difficult to use.

Issues included incomplete information necessary for effective siting decisions, excessive redaction of data, and requiring users to sign a non-disclosure agreement (NDA) described by the PUC as “commercially unreasonable” to access clear HCA maps or tabular data, along with multiple other problems.

As Stanfield explains, “The problem is that the NDA was written by Xcel without any input from customers and was completely commercially unreasonable. Realistically, nobody can sign it. IREC couldn’t sign it. We were literally saying, ‘We can’t sign this. We can’t even look at the maps to see if they’re good or not,’ because the NDA was so onerous.”

Despite recent legislative mandates for Xcel to publish a detailed hosting capacity map for both load and generation, Xcel declined to make the load map publicly accessible. The PUC dismissed the utility’s claims that these measures were needed for grid security and decided that the company must release unredacted data without requiring NDAs from users. Additionally, it called for improved data granularity.

Describing the importance of the enhancements in the level of HCA detail that Xcel will now need to provide, IREC Regulatory Engineer Midhat Mafazy explained:

“(The current level of detail) is like being told there’s traffic on Interstate 55 somewhere between Chicago and St. Louis. It’s vague and not very useful. Developers need more granular data that pinpoints where constraints are and why congestion is happening. These improvements will make the data massively more useful for deploying clean energy and EV charging infrastructure, and smarter grid planning overall.”

Stanfield further explains, “Xcel takes pretty much the most extreme position of any utility that’s been required to or has voluntarily published a hosting capacity map. All other – there’s something like 40 or more hosting capacity maps that are published in the United States, and none of them require an NDA.”

Additionally, Xcel previously conducted a load hosting capacity analysis but only published it in a table or spreadsheet format, rather than as a map, which IREC says posed several problems. The utility also did not provide the nodal results.

Reviewing the spreadsheet made it hard to identify the actual location, rendering it “totally useless” since knowing capacity on a random segment doesn’t assist someone trying to locate a site.

Xcel claimed that withholding the data was necessary to ensure the security of the electricity grid. However, the PUC dismissed this argument and decided that the utility must publish “unredacted data” without requiring users to sign an NDA.

Stanfield adds, “The linkage between publication of a hosting capacity map and an increased risk of attacks on the distribution system is very weak or non-existent. It’s basically speculative, and that’s what the commission found.”

The PUC’s decision

The PUC also decided that Xcel must create a policy for flexible interconnection and energisation.

Stanfield notes, “The other thing that IREC was involved in for this proceeding was getting the commission to require Xcel to publish a flexible interconnection and a flexible load tariff. They had been dragging their feet and not really doing it and not committing to doing either, and the Commission required them to publish both flexible interconnection and flexible energisation, or flexible interconnection, for load, which is really significant.”

Flexible interconnection allows generation or load projects to connect to the grid with the ability to adjust the power they send or draw as system capacity varies.

Xcel initially suggested a very narrow use of flexible interconnection, applying only to certain parts of its grid for specific projects, and had no firm plans for flexible load. IREC argued that these eligibility criteria were too restrictive and advised establishing a formal tariff outlining eligibility, review processes, and implementation steps. The PUC’s ruling aligns with IREC’s recommendation.

PUC Commissioner Megan Gilman noted of flexible interconnection, “One of (our) state goals is getting DERs, getting new customers and loads, connected in a cost-effective and timely manner. Flexible interconnection clearly is one tool that could be available. Limiting that option, dragging (their) feet, acting like a more narrow option is all that’s necessary gets to the bigger question, of ‘Does it appear the company is actually strategically trying to meet those state goals?’”

From IREC’s viewpoint, this decision is a positive move toward holding Xcel Energy accountable for customer needs and advancing the broader clean energy and transportation goals of the State of Colorado.

A formal written order recording the verbal decisions from the public proceeding is anticipated in December.

It is unclear, however, based on the company’s activity, whether it will comply with those orders. The uncertainty is being caused by the strong positions Xcel took in this hearing.

Stanfield says, “During the deliberations where the commissioners were talking about what they were going to require, they all expressed a sort of deep distrust with whether Xcel will actually do what’s required, which I haven’t heard very often in my practice all over the United States, and you don’t often hear commissioners just outright question whether the utility will even comply with their order.”

Stanfield also highlights additional comments from Commissioner Gilman:

“Commissioner Gilman expressed a particular concern about whether Xcel is going to comply with the order this time and set forth a process that would allow staff to do an investigation and pursue penalties if they don’t, but she questioned openly whether that would even be effective, which is a really troubling place to be.”

Xcel’s motivations for non-complicance are certainly called into question when the utility faces further delays in building out energy infrastructure.

Stanfield notes, “If Xcel does not take into account managed charging and the ability of DERs to respond to grid conditions and be ‘flexible,’ that results in a need for more distribution upgrades, which means the ratepayers have to pay for more distribution upgrades, and the shareholders get a greater profit every time they build what’s called a capital investment.”

Adding, “So were they motivated? Are they not motivated to enable the flexibility of the DERs because their shareholders don’t get as much of a profit? That’s the question that I think the commission was grappling with in this proceeding, overall.”

Our colleagues at PV-Tech first reported on this story, noting that financial mechanisms, like flexible tariffs for grids where renewable energy is an increasingly integral part of meeting energy demand, can also minimise the cost of a mismatch between electricity supply and demand.

This may be especially important for Xcel in Colorado, where the utility has actively worked to boost renewable energy’s share in its overall mix in recent years. From 2005 to 2024, wind power’s contribution to the energy supplied to customers grew from 2% to 35%. Xcel anticipates this will rise to 62% by the end of the decade.

Colorado ranks eighth in the nation for energy storage capacity, sixth for wind energy and tenth for solar energy, making the integration of these sources into the grid a crucial aspect of energy management.

In a 2022 guest blog for ESN Premum, Gwen Brown, Vice President of Communications for IREC, wrote:

“Energy storage is a critical piece of the puzzle in the transition to an electric grid powered by high levels of renewable energy. Storage makes it possible to capture the intermittent power produced by DERs like solar and wind and use it when it is most needed.”

Brown continued, “However, many of the most valuable characteristics of storage can’t easily be utilised on the distribution grid today. That’s because most state-level interconnection rules—the rules that govern whether and how DERs are permitted to connect to the grid—have not been updated to deal with energy storage systems in a way that maximises customer flexibility and ensures the continued safe and reliable operation of the grid.”