The price tag on Xcel Energy’s $12 billion Clean Energy Plan — which is facing supply chain problems and uncertainty over tariffs — may have to rise, the company said in a Colorado Public Utilities Commission filing.
The utility asked the PUC for a 75-day delay in submitting a key solicitation for a clean energy project to “address material changes” in projects included in its state-mandated Clean Energy Plan.
The commissioners granted the extension, but voiced concerns over what the delay portends.
“It looks like they are contemplating price and cost increases, which causes me a lot of concern,” PUC Chairman Eric Blank said. “I am really nervous about what is going on here. … This filing causes me a lot of angst.”
While it is not clear how much costs could increase, a 10% rise would lead to customers paying an added $1.2 billion in rates, Joseph Pereira, deputy director of the Colorado Office of Utility Consumer Advocate, said in an interview.
“This is another example of a long, long string where the company takes a bid or proposes something and then we see massive cost overruns,” Pereira said. The UCA represents residential and small commercial customers at the PUC.
Xcel Energy, in a statement to The Colorado Sun, said it is working with developers of utility-scale solar projects to determine if project bidders need to increase their prices or change their proposed operating dates.
“We are doing everything possible to minimize project costs for customers while working with stakeholders to shorten delays to meet our clean energy goals,” the company said.
Under a 2023 state law, utilities have to create a clean energy plan that shows how they will cut their greenhouse gas emissions 80% from 2005 levels by 2030.
Xcel Energy submitted a $15 billion plan in December 2023, proposing 7,100 megawatts of new generation and storage, to achieve its targets. That plan was almost double in cost of the one the utility initially proposed in 2021.
The PUC, concerned about the price and whether the utility could manage all the projects in it, trimmed the proposal, approving a $12 billion plan witn 5,800 megawatts of new resources.
“The imperative to decarbonization is an excuse for any costs,” Pereira said. “We have to say you must decarbonize affordably.”
In its request for the added time, Xcel Energy cited supply chain problems, an April petition by U.S. solar manufacturers to extend tariffs to Southeast Asian solar cell makers and a May directive from the Biden administration to increase tariffs on China.
“We’re experiencing both delays and cost challenges implementing the approved Clean Energy Plan portfolio,” Xcel Energy said.
“Global supply chain issues are delaying the delivery of critical equipment like transformers, high demand for construction labor is driving up the project’s costs and two recent trade actions by the U.S. International Trade Commission have impacted the development of new solar and storage projects,” the company said.
This isn’t just an Xcel problem
The U.S. is facing an unprecedented shortage of transformers with delivery wait times of up to two years, according to a study by the National Renewable Energy Laboratory.
“Utilities needing to add or replace them are currently facing high prices and long wait times due to supply chain shortages,” Killian McKenna, a NREL researcher, said in a statement. “This has the potential to affect energy accessibility, reliability, affordability — everything.”
Another concern is the repeated delays in moving ahead with the Clean Energy Plan and impact that is having on prices and contracts, according to the Colorado Solar and Storage Association, or COSSA, a trade group.
Xcel Energy requested three delays in submitting the plan, filing it 80 days beyond the initial deadline, according to a PUC filing, and Wednesday was granted another 75-day delay.
“While COSSA has taken no position on this specific request, the longer these filings are delayed, the more risk this places on solar developers who are required to hold their prices,” Mike Kruger, the association’s CEO. “It is unfair to continue to put risk on solar developers when it appears the issue is with Xcel.”
Commissioner Megan Gilman also expressed concerns about the risk of a delay. “It seems to be a somewhat reasonable extension,” she said, “but I also worry that past that extension we will not get ourselves in trouble with timing” in executing the clean energy plan.