PUC reviews $155M Mountain Energy settlement; commissioners split on cost allocation and delay final vote
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Summary
Commissioner Gilman recommended approving a settlement for the Mountain Energy Project with modifications to protect ratepayers and accelerate market‑based alternatives; commissioners acknowledged a settlement but deferred a final vote while debating cost recovery, a proposed $3,500 hookup fee for new customers, and reporting requirements.
Commissioner Gilman presented an initial decision recommending the commission accept a settlement agreement for the Mountain Energy Project, a roughly $155 million proposal by Public Service Company of Colorado to address capacity shortfalls in the Eastern Mountain Gas System.
Gilman said the settlement includes an immediate Market Participation Alternatives (MPA) portfolio to reduce peak gas demand, a supplemental supply component (compressed natural gas and liquefied natural gas tanks) and an interim regulatory filing in 2028 to refine the longer‑term path. He recommended modifications including faster analysis and rollout of air‑to‑water heat pump options, immediate outreach to large gas users (to understand snow‑melt systems and other end uses), clarifying expected results tied to the MPA budget, and requiring cost disclosures for supplemental supply when the company seeks cost recovery in a rate case.
The settlement lists an MPA budget of $48,700,000 for 2025–2029 with 15% flexibility; Gilman emphasized the decision should target peak‑demand savings, not merely budget spend. On supplemental supply, the settlement described an initial five LNG tanks but Gilman clarified the decision would not assume need or prudence for any amount beyond the initial five tanks and directed future cost showing in a rate case.
Commissioner Blank raised equity and cost‑allocation concerns, arguing the settlement socializes too much of the cost across all customers and proposed a $3,500 per‑new‑structure hookup fee (with an affordable‑housing exemption) to better align price signals and avoid cross‑subsidies. Blank said he found socializing the entire project unacceptable without more tailored allocation. Gilman and Plant said they share concerns about cost allocation but prefer to examine rate case mechanics (multiple rate base areas, system impact fees) and agreed to rehearse the matter next week after staff and counsel circulate drafting options.
No final vote was taken on the settlement. Commissioners agreed to continue the item and asked staff to draft decision language and any needed rule or rate‑case mechanisms for further deliberation next week.
What to watch: The outcome will affect who pays for supplemental supply and MPA programs, the timing of electrification pilots (Gilman asked for faster deployment by July 2026), and whether new‑customer hookup fees or multi‑rate base areas are used to allocate costs.
