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Company warns long‑term rate forecasts may understate future costs as generic prices and transmission investments rise
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Summary
At a June 11 hearing, Public Service witness Mister Eilley told the commission that the company’s 2024 long‑term rate analysis and portfolio PVRR figures were based on generic resource pricing from 2023, and that generic prices have risen since the direct filing. He said the company has not updated
DENVER — Public Service Company of Colorado told the Public Utilities Commission June 11 that its October 2024 long‑term rate analysis used generic resource prices that the company now believes are below current market expectations, and that transmission cost estimates in recent filings have risen.
What the company said: Mister Eilley testified the company’s phase‑1 and phase‑2 modeling used generic resource pricing prepared in 2023; that pricing “has gone up” and in rebuttal the company’s planning witness, Mister Landrum, concluded some current expectations may be materially higher than the earlier generic inputs. “Costs are currently rising practically daily,” Eilley said.
Scale of modeling numbers: Eilley discussed a table in the company’s technical appendix showing a planning‑period present value revenue requirement (PVRR) for a base portfolio of about $64 billion (2025–2050). He cautioned that this PVRR figure includes generation, transmission and other components and that it was based on generic inputs rather than the specific bids that will be available after the phase‑2 RFP.
Transmission updates: Cross‑examination also covered large‑scale transmission projects. Eilley acknowledged the company’s ongoing Colorado Power Pathway and other projects and discussed updated cost estimates in testimony: the May Valley‑Longhorn extension estimate rose from roughly $247 million in earlier filings to about $304 million in materials filed for this case, and the Power Pathway remains a multi‑billion‑dollar project. Eilley said the company has a multi‑year transmission investment profile and that its five‑year forecast presented to investors was “in that order of magnitude.”
What it means: The company said the phase‑2 RFP is intended to provide actual market bids that will replace the generic assumptions, and that the competitive bidding process should yield more accurate cost estimates. Eilley said the company cannot now say precisely what the total costs will be once phase‑2 bids are received; he described phase‑2 as the point at which the market provides that data.
Open points: Intervenors asked whether changes in generic pricing could double the PVRR of some portfolios; Eilley said he did not think a doubling was a reasonable implication but acknowledged the PVRR could be higher. He recommended relying on phase‑2 competitive bids for final portfolio selection rather than on older generic pricing.
Bottom line: The company urged the commission to expect uncertainty in long‑term cost projections and to treat the phase‑2 RFP as the source of more reliable, project‑specific cost data. Intervenors pushed for updates to modeling inputs and close attention to transmission cost growth and risk to customer affordability.
