Public Service Company of Colorado (Public Service) on Dec. 21 filed with the Colorado Public Utilities Commission an application requesting two certificates of public convenience and necessity (CPCNs) for the 500-MW Cheyenne Ridge Wind Farm generation facilities and for the 345-kV Cheyenne Ridge Gen-Tie line needed to deliver the electrical output of the Cheyenne Ridge Wind Farm to Public Service’s system.
The company said that it is also seeking approval of:
- Its proposed customer protection mechanism (CPM) and generation performance metric. The proposed CPM ensures customers receive the value from the project and would track the costs and generation from the Cheyenne Ridge Project on a $/MWh basis to allow comparison with the costs included in the modeling of the Cheyenne Ridge Wind Project in a Phase II bid evaluation process. The proposed generation performance metric implements explicit performance standards for the Cheyenne Ridge Wind Farm and provides an incentive to the company to ensure that the wind farm is maintained appropriately and any degradation in performance is mitigated as much as possible over the 25-year life of the wind farm
- Its cost recovery proposal, which forgoes a current return on construction work in progress and allows for cost recovery for the cost associated with the eligible energy resource, including any costs associated with any deferred tax asset (DTA), upon commercial operation through the renewable energy standard adjustment (RESA) and the electric commodity adjustment (ECA). The company proposes to bring the project into base rates in the first rate case after the project achieves commercial operation; at that time, the company would propose an approach to the ongoing recovery of DTA carrying costs
- Specific findings with respect to the reasonableness of the projected noise and magnetic field levels that would result from the Gen-Tie
The company also noted that it requests that the commission issue a final, expedited decision in the proceeding by May 1, 2019.
Public Service noted that the commission approved its Preferred Colorado Energy Plan Portfolio (Preferred CEPP) in September. In addition to the 660 MW of coal-fired generation that will be voluntarily retired to allow for implementation of the Preferred CEPP, Public Service will acquire about 1,131 MW of new wind resources, 500 MW of which will be company owned, procure 707 MW of new solar resources, develop 275 MW of new battery storage, and retain 383 MW of existing gas assets.
Public Service added that the Preferred CEPP is economically beneficial for customers and will be critical to meeting the company’s goal of 100% carbon neutral generation by 2050.
The Preferred CEPP is comprised of 11 separate generation projects, the company said, noting that in order to move forward with each of the approved generation projects, the commission directed the company to file CPCN applications. The subject of the Dec. 21 application is the 500-MW Cheyenne Ridge Wind Farm and the approximately 65-mile, 345-kV Cheyenne Ridge Gen-Tie line necessary to connect the wind farm to the Rush Creek Gen-Tie and eventually the Public Service system.
The Cheyenne Ridge Wind Farm is located on the eastern plains of Colorado, the company said, adding that the project was bid into the company’s 2017 All-Source Solicitation by Tradewind Energy. As bid, the wind farm proposes to use 225 Vestas V116 turbines and 25 Vestas V110 turbines. The company added that through the Gen-Tie, the wind farm would interconnect at the new Shortgrass switching station for which Public Service recently filed a separate CPCN application.
From the switching station, the Rush Creek Gen-Tie would deliver the Cheyenne Ridge output to the company’s system at its Missile Site substation. The 345-kV Gen-Tie would generally be built using steel monopole, V-string, single-circuit structures ranging in height from 105 to 150 feet, with two-conductor bundled 954 aluminum conductor steel-reinforced. The company added that certain route segments may be built using double-circuit design, which would allow the company to potentially share right of way and land costs with other existing or planned transmission lines in the area.
The company noted that it proposes a commercial operation date (COD) for the project on or before Dec. 31, 2020, to qualify for the full value of the federal production tax credit (PTC). Once commercially operational, the service life of the wind farm is projected to be 25 years.
Public Service added that the wind project was bid into its 2017 All-Source Solicitation as a build-own-transfer (BOT) project whereby Tradewind would develop and build the project ahead of its commercial operation date. Upon commercial operation of the project, Tradewind would sell the project to Public Service to operate the facility as a utility owned asset.
However, Public Service added, during the course of extensive negotiations with Tradewind regarding the terms of the BOT structure, Tradewind and Public Service mutually agreed to pursue a “develop-transfer” as an alternative to the BOT structure. While the BOT structure and the develop-transfer structure differ with regard to the timing of the transfer of ownership from Tradewind to Public Service, the outcome of the transaction is the same as was presented in the company’s Preferred CEPP and approved by the commission: Public Service would ultimately own and operate the wind project.
Among other things, Public Service said that the estimated cost of construction of the Cheyenne Ridge Wind Project, including the wind farm and Gen-Tie, is $707m in capital costs, plus an allowance for funds used during construction of about $38m, for a total of $745m; the company estimates the total cost of the Gen-Tie to be $52.7m.
The anticipated construction start date is July 2019, the company said.