In a recent government meeting, the Public Service Company of Colorado (PSCo) presented its request for a Certificate of Public Convenience and Necessity (CPCN) for two significant solar projects: the Rocky Mountain project, a 325 megawatt solar plus storage facility, and the Arroyo 2 project, a 335 megawatt solar facility. These projects are part of PSCo's broader strategy outlined in its 2021 Electric Resource Planning and Clean Energy Planning proceedings.

The urgency of the Rocky Mountain project was emphasized, with PSCo stating that construction must begin by mid-August 2024 to meet a critical commercial operation date of December 31, 2025. Failure to meet this deadline could result in the loss of essential interconnection rights linked to the retired Bridal unit 1 coal plant.

Both projects are subject to a cost to construct performance incentive mechanism (PIM) established in the previous proceedings, which incentivizes PSCo to complete the projects under budget while imposing penalties for cost overruns. A comprehensive settlement agreement was filed by PSCo and several stakeholders, although not all parties joined the agreement.

Key points of the settlement include the treatment of the investment tax credit (ITC), which PSCo anticipates will provide approximately $110 million for the Rocky Mountain project. The settlement stipulates that the cost baseline for the PIM will be adjusted based on the anticipated ITC, with provisions to credit customers over five years to mitigate rate volatility.

Additionally, both projects will share a generation interconnection tie line, with costs allocated based on which project is operational when the tie line is completed. The settlement also addressed concerns regarding the need for additional timing incentives, concluding that existing financial implications would suffice.

The meeting concluded with an agreement for PSCo to file a cost to construct and operational PIM application by September 30, 2024, which will clarify the treatment of project curtailments and establish an appropriate amortization period for costs. This proactive approach aims to streamline the development of renewable energy resources in Colorado while ensuring accountability and transparency in project financing.