HBAs, Xcel announce change to line extension policies

After two years of collaboration and hearings at the Colorado Public Utilities Commission, the Colorado Association of Home Builders and the Home Builders Association of Metro Denver are pleased to announce that Xcel Energy-Colorado will implement new changes to its gas and electric line extension policies. The changes, which will go into effect on Tuesday were recently approved by the Colorado Public Utilities Commission (CPUC).

These changes are intended to provide a stronger level of transparency and cost predictability associated with new line extensions in Xcel Energy’s Colorado service territory. A fact sheet from Xcel about the changes is available at https://www.xcelenergy.com/staticfiles/xe-responsive/Start,%20Stop,%20Transfer/CO-LineExtensionPolicy.pdf. We have also posted it to the HBA website at hbadenver.com/XcelExtensionFAQs for future reference.

Our associations have led this process with Xcel Energy and other stakeholders to address a variety of issues that have been presented by our members over the past several years. We need to thank Randy Carpenter of KB Homes and Ryan McDermed of Shea Homes for their leadership throughout this process.

Xcel Energy’s new policy will include a number of enhancements, including new standard costs for most residential gas and electric construction, as well as an upfront credit for off-site work or system reinforcements necessary to serve a facility or development. The new changes will also include an opportunity to obtain preliminary plat estimates, as well as construction timeline estimates that will be provided by the Company within the line extension agreement. The changes include:

• Unbundled cost estimates from Xcel Energy to provide a more transparent delineation between major project elements, including service laterals and other necessary on-site and/or off-site cost requirements to serve a new facility or development.   This new structure allows for standardization of costs for residential construction.
• Off-site construction costs and system reinforcements will now be reduced by an upfront credit of 35% for electric line extensions and 28% for gas main extensions.  This policy replaces the existing, but complicated and often-uncertain, 10-year “open” extension period.

• Standard, published costs for on-site construction and service laterals serving most single family and townhome lots.

• New preliminary plat estimates to provide a more meaningful, knowledgeable and efficient planning process.

In addition to these and other various policy enhancements, Xcel Energy also has allocated new personnel, internal resources and new processes dedicated solely to serving the growing needs of the builder and developer industry.

“Line extensions are a complex area of a utility’s business. However, our members needed more certainty with new line extensions, including timely expectations of how much a project will cost and how long it will take to complete,” said Chérie Talbert and Ted Leighty, the CEOs of the Metro Denver and Colorado HBAs.

We appreciate Xcel Energy’s work to complete this process and the company’s efforts to include all stakeholders in this process. We also thank the Colorado PUC for undertaking this process and bringing it to a successful conclusion.

“The Company’s existing extension policies were developed roughly 40 years ago” stated Alice Jackson, Xcel Energy Colorado President, on this agreement. “While some updates have been made over time, evolving practices within our industry coupled with trends in the builder and developer markets occurring in our Colorado service territory have presented a significant opportunity for these improvements.  We appreciate the partnership and guidance from our industry partners notably the Colorado Association of Homebuilders, Colorado BUILDS and the Home Builders Association of Metro Denver in developing these new solutions.”

Once again, thanks to Xcel, the CPUC and all stakeholders for their commitment to this process and important change. We hope that this update to the line extension policies will provide more certainty and clarity to your projects.