Utility Transformation in the Interior West

The plummeting cost of clean energy creates new opportunities to rapidly decarbonize the electricity system. This is particularly true in the U.S. Interior West, home to some of the best wind and solar energy resources in the world. In some parts of the region, building new wind and solar wind farms is now less costly than running existing conventional power plants. While many electric utilities are beginning to increase their investment in clean energy, few have been as quick or aggressive as Xcel Energy Colorado, the largest utility in the state.

In 2004, 97% of Xcel Colorado’s electricity came from conventional plants powered by fossil fuels, primarily coal. By 2016, due to a number of strong clean energy policies, this number declined to 71%, with renewables comprising the remaining 29% of Xcel’s electricity mix.

This is an impressive transition, but in its recent Colorado Energy Plan, Xcel committed to a truly transformational shift to clean energy. Xcel’s latest energy plan will bring the utility’s electricity mix to 53% renewables by 2026, while reducing carbon emissions by 59% from 2005 levels. These benchmarks are among the most ambitious of any major utility in the U.S., and far exceed Colorado’s 30% by 2020 renewable energy mandate. Furthermore, the plan will save customers $215 million over Xcel’s business-as-usual plan.

While falling renewable energy costs have been the main driver of this transformation, policy also played a critical role. For years, Sea Change Foundation and funding partners such as the Hewlett Foundation and Heising-Simons Foundation have supported Western Resource Advocates’ work to help advance the transition to clean energy in the Interior West. In partnership with other non-profit organizations, Western Resource Advocates has worked closely with Xcel’s executive leadership and Colorado decision makers to help align the utility’s financial interests with clean energy investment. Using a combination of policy expertise, technical analysis, and relationships with key stakeholders, Western Resource Advocates played a central role in negotiating a 2017 comprehensive settlement with Xcel, consumer advocates, and power plant developers that allowed for Xcel to accelerate its investment in clean energy while reducing customer bills.

Colorado is often seen as a national bellwether for progress on climate, and Xcel Energy’s transformation is a major proof point that a rapid transition to clean energy can be a win-win for both utilities and consumers.