Public Service seeks presumption of prudence for 38 GIP projects as commissioners press on rates and costs

Public Service Company of Colorado asked the Public Utilities Commission on Jan. 16 to grant a presumption of prudence for a narrowed set of planned gas infrastructure projects that the company says will have meaningful capital expenditures during the 2025'27 action period. The company told the commission it now seeks that presumption for 38 projects it characterizes as "meaningful" because each exceeds the planned-project threshold and will begin spending during the action period.

Why it matters: Commissioners and intervenors pressed the company on whether approving project scopes and rough cost estimates now could shift cost escalation risk onto ratepayers later. Chair Eric Blank opened the hearing by noting the proceeding and parties on the record. Staff and intervenors repeatedly returned to the long-term rate forecast and the mix of growing rate base and declining retail sales.

What the company said: Jason Piquet, director of regulatory administration for Public Service, told commissioners the company is asking the commission for a presumption of prudence "for those 38 planned projects in the action period" and that the company will seek that presumption for projects with meaningful expenditures during 2025'27. He added the presumption request covers projects with estimated total expenditures above the planned-project threshold ($3,000,000 in 2020 dollars) where the project kicks off in the action period and typically will include the full project even when some costs fall later.

Questions from the bench and staff: Commissioners and staff focused on the possible disconnect between a rising gas rate base and shrinking gas sales. Staff pointed to the company's long-term model that shows rate-base growth over the coming decade and asked whether the projection remains affordable under plausible commodity-price scenarios. Piquet said the company uses a base forecast and understands uncertainty in commodity prices; he emphasized the company's view that safety and reliability needs must be balanced with electrification goals and that rate-case proceedings remain the forum where final cost recovery is reviewed.

On cost estimates: Staff and other parties noted the company used AACE class 5 (rough-order-of-magnitude) cost estimates for projects at the CPCN/plan stage; Piquet and company witnesses explained class 5 estimates are intended to screen feasibility and to inform early regulatory feedback, while more precise class 1' 3 estimates require substantial engineering, land work and design and can materially delay project timelines.

What happens next: The commission and parties will weigh the company's presumption request alongside the evidentiary record. The company said final recovery and prudence findings remain matters to be addressed in later rate proceedings once projects are placed into service and costs are shown.