In a decision adopting several recommendations from Sierra Club and partners, the Colorado Public Utilities Commission directed Xcel to improve its gas system planning, advancing building electrification. This win in Xcel’s inaugural Gas Infrastructure Plan will ensure that future gas infrastructure plans (1) account for electrification policy when forecasting the need for new gas infrastructure, (2) consider the risk of gas infrastructure becoming a “stranded asset,” and (3) seriously consider alternatives like electrification that avoid growing the gas system.
Xcel’s filing assumed its gas system will continue adding customers at the same pace it has previously. Sierra Club’s Environmental Law Program argued that this approach overstates the need for gas infrastructure, ignoring shifts in policy and market momentum toward meeting Coloradans’ energy needs with clean electricity instead of polluting gas. This approach could lead to unnecessary gas system investments, which are inconsistent with Colorado’s climate goals and risk saddling customers with costs of “stranded” infrastructure that must be retired early as electrification accelerates to meet those targets. The Commission agreed, finding that Xcel’s business-as-usual approach was “no longer acceptable nor in the interest of ratepayers.” This win comes on the heels of a string of similar Sierra Club wins in gas planning dockets in the Pacific Northwest.
Sierra Club also argued that Xcel must consider alternatives to more gas infrastructure projects known as “non-pipe alternatives”, using assumptions that better reflect their economic and climate benefits. Again, the Commission agreed. It “strongly encourage[d]” Xcel to evaluate non-pipe alternatives for a much wider range of gas projects, and cautioned that if Xcel pursues these projects without adequate review, “it is likely doing so at its own risk.” The Commission also adopted Sierra Club’s recommendation that non-pipe alternatives should prioritize electrification over efficiency improvements to customers’ gas equipment. Xcel is now moving forward with multiple non-pipe alternatives, including a project to fully electrify Boulder’s Pearl Street Mall and retire the gas pipeline serving the area.
Finally, Sierra Club strongly opposed a hydrogen blending pilot project that Xcel proposed in its plan. This dangerous, wasteful project would expose customers to increased indoor and outdoor air pollution and explosion risk, while propping up continued investment in the gas system on the false promise that Colorado can decarbonize its combustion fuels rather than move away from them. In response, Xcel backed away from the proposal and will not pursue further residential hydrogen blending until at least 2026.
Sierra Club was represented by Environmental Law Program attorneys Jim Dennison and Joe Halso. Sierra Club intervened jointly with NRDC, Southwest Energy Efficiency Project, and Western Resource Advocates. Sierra Club’s Field Department and Colorado Chapter’s organizing efforts complemented our legal intervention, and contributed to the public pressure that led Xcel to withdraw its hydrogen blending pilot proposal.