The state’s largest utility wants new and enhanced substations to handle “a grid demand we haven’t seen since the advent of air conditioning”
Xcel Energy is proposing a $5 billion plan to enhance the links between the grid and homes and businesses in response to rising demand for electric vehicles, rooftop solar arrays, and heat pumps, as well as overall growth in power use.
The business recently submitted a 443-project distribution service plan to the Colorado Public Utilities Commission, which may take a year to approve the proposal.
Between 2025 and 2029, investments in 35 new substations, 108 updated or new substation equipment, and more than 300 distribution feeders would increase the average residential bill by $8.71 to $105.37, and the average small business bill by $10.24 to $131.
“This is being driven by increasing load growth,” Robert Kenney, CEO of Xcel Energy’s Colorado subsidiary, stated in an interview. “It is a demand on the grid we haven’t seen since the advent of air conditioning.”
According to Xcel, the number of electric heat pumps replacing gas furnaces will increase to 300,000 by 2030, up from 5,000 today, and the number of EVs will triple to 400,000 within the same period.
Residential solar is predicted to more than double to 1,500 megawatts, while community solar will more than treble to 700 megawatts, taxing the distribution system as they add additional electricity to the grid.
“We need to do more proactive investment to keep up with the unprecedented demand,” Mr. Kenney said. The aim is to add 3,100 MW of capacity to the distribution system, which takes power from the high voltage grid, lowers the voltage, and delivers it to households and businesses.
“We do expect increased reliability, increased security of the grid and reduced outages,” according to Kenney. “It serves multiple purposes.”
A second incentive for the distribution plan is Colorado’s aim to “decarbonize” the state’s energy use, thereby reducing greenhouse gas emissions.
Kenney stated that the company is on schedule to achieve the state’s demand that the utility reduce emissions by 80% from 2005 levels by 2030, but that additional clean energy must be made accessible to the transportation and heating sectors in order to meet the state’s overall targets.