Federal funds will spark $1.2B electric transmission project in eastern Colorado

Xcel Energy is embarking on a $1.2 billion transmission project — with $250 million in federal backing — to link its Colorado and Texas grids, opening the way to access electricity from Southwest Power Pool, one of the nation’s largest grid operators.

The project would upgrade a tie-line line and increase the amount of electricity that it can carry to 700 megawatts from 210 MW, with the ability to expand to 2,000 MW with future upgrades. 

The project, on the line that carries power between Finney, Texas, and Lamar, will include 12 miles of new transmission and replacing 16 miles of existing lines in Colorado with new ones able to carry more power.

The line will link Xcel Energy’s Colorado subsidiary, Public Service Company of Colorado, with its Texas affiliate, Southwestern Public Service, which is a member of the Southwest Power Pool or SPP.

The SPP grid covers all or parts of 17 states and has 73,000 miles of transmission lines and 65,000 MW of generating capacity, including 35,000 MW of wind power across 231 wind farms.

“This gives us a much larger geographical footprint for access to wind resources, when you look at the enormous wind resources in the Southwest Power Pool,” Will Toor, executive director of the Colorado Energy Office, said.

The $250 million in federal funding is part of the U.S. Department of Energy’s $1.9 billion “Speed to Power” or SPARK program, which is funding 31 grid improvement projects across 26 states.

“This $250 million investment is an enormous step to actually make this happen for all of our goals in energy affordability, reliability,” Gov. Jared Polis said. “For more clean energy on the grid, having this interstate transmission is absolutely critical.”

In a statement announcing the award, Tim Walsh, an assistant DOE secretary, said the upgrades “will ensure that households in Colorado and across the Western United States have access to secure, abundant, and reliable power, even during severe weather.”

The SPARK program was authorized by the Biden administration’s 2021 Infrastructure Investment and Jobs Act.

The remaining 80% of the project cost will be passed on to electric customers. 

“The $1.2 billion … that’s an approximation,” Public Service of Colorado CEO Robert Kenny said. “The important thing to consider is that this $250 million is going to reduce what the overall cost would have been to customers.”

Xcel is the largest service provider in Colorado with 1.6 million customers and its Southwestern Public Service subsidiary has 393,000 customers in Texas and New Mexico.

The project still needs approvals from the Colorado Public Utilities Commission and from the Federal Energy Regulatory Commission, since it is an interstate transmission project.

“The federal government is granting $250 million so clearly they are supportive,” Polis said, “and at the state level, we’re very supportive.”

There are two major grids in the U.S. — the Eastern Interconnection and the Western Interconnection. Texas has its own grid, but Southwest Public Service is not a member.

There are only six direct current tie lines, ranging from Nebraska to Texas, linking the East and the West with about 1,300 MW of capacity, according to Casey Cadle, SPP director of seams strategy. The interface of two grids is called a seam.

SPP manages three of those ties with about 510 MW of capacity, but while Southwest Power is a power pool member, Xcel Energy’s Colorado subsidiary —  the largest electricity provider in the state  —  decided not to join SPP.

Seven other Colorado utilities and power providers, including the Tri-State Generation and Transmission Association, Platte River Power Authority and Colorado Springs Utilities, became SPP members in April and are being served by the power pool.

Cadle said that the SPP board voted in August to move ahead with a study to “unlock more value between the eastern and western interconnections.” The preliminary analysis is that 5,500 MW of east-west capacity could be created.

Xcel Energy Colorado, under the planned project, would access the SPP through the Southwestern Public Service transmission lines to Oklahoma and Texas.

The tie line project will use existing transmission routes and ultimately connect the Texas tie line to Xcel Energy’s $1.7 billion Power Pathway transmission project, which is designed to bring electricity to Front Range population centers.

“Itt will unlock more clean energy,” Kenney said, “It’s a practical, accelerated, cost-effective way to modernize the grid while also using … a high voltage DC technology, making it more efficient to move electrons long distances.”