HomeMy WebLinkAbout1.0 ApplicationColorado-Ute Electric Association, Inc.
Telephone (303) 249-4501
P. 0. Box 1149
Montrose , Colorado 8 1402
Honorable Flaven J. Cerise, Chairman
Garfield County Commissioners
Post Off ice Box 640
Glenwood Springs, Colorado 81602
Dear Flaven:
TW X 910-929-6924
August 10, 1982
Please find enclosed Colorado-Ute Electric Association's
application for a Certificate of P u blic Convenience and Necessity
to construct, operate and maintain a 345 kv transmission line in
Western Colorado. This pro j ect has comm only been referred to as
the Rifle to San J u an 345 kv T ran s mission Line. We wi ll be
contacting you as we have additional informati on that may be
pertinent for your use.
Should you have any questions or comments about t h is applica-
tion, please do not hesitate to contact me by phone or in person.
We also hope to be able to make a presentation to you on the Rifle
to San Juan line in the future when you feel it might be
appropriate.
Thank you very much for your consideration on this matter.
Sincerely,
if:!t. Kempf
Director of Governmental Affairs
JCK/nc
Enclosure
... ~ .
I
,
BEFORE THE PUBLIC UTILITIES COMMISS ION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF )
COLORADO-UTE ELECTRIC ASSOCIATION , INC. )
P. O. BOX 1149, MONTRO SE , COLORADO 81402 )
FOR A CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY TO CONST RUCT , OPERATE, AND )
MAINTAIN A 345 KILOVOLT TRANSMISSION LINE )
TOGETHER WITH RELATED SUBSTATION )
FACILITIES, TO BE LOCAT ED IN NINE COUNTIES )
IN WESTERN COLORADO, AND ONE COUNTY IN NEW )
MEXICO, SUCH FACILITIES COLLECTIVELY TO BE )
KNOWN AS THE RIFLE-SAN JUAN 345 '&/ ) APPLICATION NO.
TRANSMISSION LINE )
IN THE MATTER OF THE APPLICATION
SERVICE COMPANY OF COLO RADO, 550
OF PUBLIC )
15th )
STREET, DENVER, COLORADO, FOR A
CE 'RTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY TO PARTICIPATE IN THAT PORTION
OF THE ABOVE NOTED TRAN SMISSION LINE
BETWEEN RIFLE AND GRAND JUNCTION
)
)
)
)
)
CERTIFICATE
COME NOW the Applicants above-named , by and t.1rcl13h their
undersigned attorneys, and respectfully app ly to the Commission
for a Certificate of Public Convenience and Necessity to
construct, operate, and maintain the facili ties set forth in the
caption hereof, such facilities collectively to be known as the
Rifle -San Juan 345 kilovolt ( "kv") Transmission Line (the
"Transmission Line"), and in support thereof Applicants show and
state the following:
1. The busine ss address of the Applicants , Colorado-Ute
Electric Association, Inc. ("Colorado-Ute ") and Public Service
Company of Colorado ("Pu blic Service") are as se t forth in the
title hereof. Colorado-Ute and Public Service will be jointly
known as "Applicants". Colorado-Ute is a Colorado corporation,
and a copy of its Article s of Incor porati on, with a ll amendments
thereto , has heretofore been filed with the Comm i ssion. P ubli c
Service is a Colorado corporation, and a copy of its Articles of
Incorporation, with a ll amendments thereto , has h eretofore been
filed with the Commi ssion.
Copies of all p leadings and correspondence s h o uld be ma iled
to the following person s :
Howard S . Bjelland
Vice President and General Coun se l
Colorado-Ute Electric Association, Inc.
P. o. Box 1 149
Montrose , Colorado 81402
A. M. Gabiola , Area Manager
Department of Energy
Wes t e rn Area Power Administrati o n
P. o. Box 1 1606
Salt La k e City , Utah 84147
J. H. Ranniger
Vice P resident -Rates and Reg ula tio n
Publi c Service Company of Color a do
550 15th Street
Denver, Colorado 80202
J a mes K. Tarpey , Esq .
Kelly, Stansfield· & 0 ' Donne ll
900 Pu blic Service Company Bu ilding
550 15 t h Street
Denver , Colorado 80202
2 . For the purposes addressed in this Applic a ti on,
Colorado-Ute is a publi c utility subject to the juri s d ictio n of
this Commission, and i t is engaged in the ge n e r a tio n, pu rch ase ,
and transmission of electric power and energ y for sa l e at wh o l e-
sale to its me mb e rs wh o serve areas in Colorado, Wy o ming, Ne w
Me xico and Utah. The present members of Color a do-Ute and the
general service are a of each are as follows :
NAME
De lta-Montrose Elect r ic
Association
Empire Electric As sociation, Inc.
Gr a nd Valley Rural Power Lin es ,
Inc.
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GENERAL AREA OF SERVICE
Delta , Mo ntrose , and Gu n n ison
Counties , Co l o r ado;
Montezuma , San Mi g ue l, and
Dolores Co un tie s , Co l orado ;
and San J u an County, Utah;
Mesa , De lta , and Gar f ie ld
. Counties , Co lorado ;
Gunnison County Ele ctric Associa-
tion, Inc.
Holy Cross Electric Association ,
Inc.
Inte rmountain Rural Electr ic
Association
La Plata Electric As soc i ation ,
Inc .•
Sangre De Cristo Electric
Association, Inc.
San Isabel Electric Association,
Inc.
San Luis Valley Rural El ectric
Cooperative, Inc.
San Miguel Power Associ ation , Inc.
Southeast Colorado P o we r
Association
White River Electric Association ,
Inc.
Yampa Valley Electric Association,
Inc.
Gunnison , Hinsda le, and
Saguach e Counties, Col o r ado;
Garfield , Pitkin, Gunni s on,
and Eagle Counties,
Colorado ;
Park , Te lle r, Cle ar Cree k,
Jefferson, Dougl a s, Elbe rt,
Arapah oe , a nd Adams
Count i es , Colorado;
Archule t a , Hin s dale, La Pl a t a ,
San J u an , and Mine ra 1
Coun t i es , Colorado; S a n Ju an
County, New Me xico;
Lake , Ch a ff e e, Fremont,
Saguach e , and Custer
Coun t i es , Colorado;
Pueblo , Hu e rfano, Las Animas ,
Otero , Custer, Costill a , and
Fremont Counties, Colorado ;
Alamosa , Rio Grande, Hin sda l e ,
Costi lla, Cone jos, Mi n e r a l,
and Sa9 u a che Counties,
Co l o r a do;
Dolores , Ouray, San Juan,
San Miguel, Montros e ,
Hinsda le, and Mesa
Coun t i e s, Colorado;
Prowers , Be nt, Otero, Che y e nne
Baca , Las Animas, Ki o wa ,
Pueb lo, El Paso, Crowle y,
and Lincoln Counties,
Colo r ado;
Rio Bl anc o, Moffat, and
Garfield Countie s,
Color ado;
Routt , Mo ffat, Jackson, Gran d ,
Eagle , and Rio Blan co
Coun t i es , Colora do; an d
Carbon County, Wyom i ng.
The certificated servi ce areas of t h e membe r s of Colorado-Ute a r e
depicted on Exhibit "A" attached hereto and in c orporate d h e r e in b y
reference.
Public Service i s an operating public utility, s ubj ect to t h e
jurisdiction of thi s Corrunission , engaged i n te r ali a in the
generation, purchase , t ransmission , distr i b uti o n and s ale of
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electric power and energy throughout extensi v e areas in the State
of Colorado, including Garfield and Mesa Counties and the City of
Grand Junction.
3. Colorado-Ute proposes to construct a s ingle circuit 345
kv transmission line, with a capacity of about 500 megawatts,
approximately 275 miles in length traversing nine counties in
western Colorado and one county in New Mexico, together with
related substation faciliti es . The line will originate at the
Rifle Substation of Colorado-Ute, proceed genera lly to the
vicinities of Grand Junction, Delta, Montrose, Norwood, Cortez and
Durango (He sperus ), and will terminate at the San Juan Gen erating
Station Switchyard locat ed in northwestern New Me xico. Public
Service proposes to participate , to the extent noted below, in
that portion of the line between Rifle and Grand Junction.
Exhibit A also shows the corridor t h ro ugh which the
Transmission Line will pass. The route has been ~elected to
connect existing substation and terminal faci lities near Rifle,
Grand Junction and Montrose . Additional terminal facilities will
be provided at the Rifle and Grand Junction s t a tions. Exi~ting
facilities at the Montro se switching station will be connected to
the Transmission Line but not expanded at the present time. Ne w
transformation and termina l facilities will be constructed n ear
Hesperus, Norwood, Lost Canyon, and at the San Jua n generating
station switchyard, the Shiprock substation and the Four Corner s
substation . Attached h ereto and incorporated h e rein by ref ere n ce
as "Exhibit B" is a map of Colorado showing e xisting transmis sion
and substation faciliti es .
With respect to th at portion of the line crossing priv ate
land, Applicants prbpos e to acquire , wh ere such landown e rs agree
-4-
to sell , a right-of-way corridor of sufficient width to contain an
additional single-circuit line to be constructed when future
system requirements so warrant. With respect to that portion of
the Transmission Line crossing federal , state , or locally-owned
lands, Applicants propose only to acquire a corridor of sufficient
width for a single-circuit line but will concurrently apprise the
governmental authority of the future need for additional corridor
space. If due to environmental or other concerns, a governmental
body should restrict Applicants to a narrow corridor not adequate
for two single-circuit lines , or if terrain and geographical
features so require, Appli cants propose to utilize special towers
in such areas, which could be converted to double-circuit use if
necessary , as a cost-effective method of preserving the ability to
construct a second circuit along the original right-of-way.
The cap~city of the proposed Transmission Line is to ~
jointly shared by Colorado-Ute, the United States Department of
Energy , Western Area Power Administration ("Western") and Public
Service as follows:
a ) Rifle to Grand Junction.
Colorado-Ute -37-1/2%
Western -37-1/2%
Public Service -25%
b ) Grand Junction to San Juan, New Mexico
Colorado-Ute -50%
Western -50%
These parties have entered into Letters of hjreement, copies
of which are attached hereto as Exhibits C and D, setting forth
the general intent of the parties. These parties have further
-5-
agreed to enter into comprehensive de fini ti ve agreements,
establishing in detail the respective rights and responsibilities
of each -including the establishment of own e rship shares and
operation and maintenance responsibilities . These agreements will
be introduced in evidence at the hearing on this application.
In addition, Colorado-Ute , by itself, will construct and
maintain a 115 kv tap line from the proposed Hesperus Substation
to Applicant's existing substation in Durango. The cost of this
tap line will be bourne entirely by Colorado-Ute.
4. The estimated cost of the above facilities , in 1982
dollars, excluding intere st expenses during construction , is
$125,000,000. That portion of the Transmission Line betwe e n Rifle
and Grand Junction will cost an estimated $25,000,000, which will
be shared in general accordance with the respective capacity
shares of Colorado-Ute, Public Service and Western. The proj ect
from Grand Junction ~o San Juan, Ne w Mexico is estimated to cost
$100,000,000, which will be divided between Color~do-Ute and
Western in a similar manner.
In the event that Appli cants are required, as noted above, to
utilize special towers over 25 per cent of the length of the line ,
the estimated cost increase is $12 ,0 00 ,000.
5. It is anticipated that construction of the Transmission
Line will begin within 12 months after approval by the Commis s ion,
and be completed and put in service within 24 months after
construction has started .
6. Colorado-Ute h as acquired and is in the process of
acquiring authorizati ons from the United Stat es Forest Service ,
,.. -o-
the Bureau of Land Manag ement, the Colorado counties which the
line will cross, individuals whose property will be crossed, and
from those state agencies from which authorizat ions may be
required.
7. Environmental factors in connection with the location
and design of the proposed Transmission Line have been considered
in an Environmental Analysi s prepared by environmental consulting
firms. This analysis was undertaken and is the basis for an
Environmental Impact Statement which is being prepared by the
United States Depart~nt of Agriculture, Rural Electrification
Administration ("REA") whi ch has been designated as the "Lead
Federal Agency". The Transmission Line, as constructed, will meet
present Federal and State environmental requirements and
stmldards: and the location, design, construction, and operation
of said facilities will be such as to comply with applicable
Federal and State laws and regulations.
8. Applicants have the capability to implement the
planning, construction, operation and maintenance of the
Transmission Line. Colorado-Ute presently proposes to finance its
share of the cost of the Transmission Line through debt financing,
from the Federal Financing Bank guaranteed by the REA. Public
Service has the financial ability and experience necessary to
participate and fund its portion of the Transmission Line.
Western will fund its portion of the line by Congressional
Appropriation. Further evidence of Applicants' ability to carry
out the planning, construction, operation , and maintenance of the
Transmission Line will be submitted at the hearing. Colorado-Ute
will apply to the Commission for all necessary approvals for the
issuance of any securities which shall may be involved h erein and
which shall have a maturity date of more than 12 months after the
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date of issuance. Att ached hereto and incorporated herein by
reference as Exhibits "E" and "F ", respectivel y, are copies of
Colorado-Ute's Balance Sheet and Colorado-Ute's Stateme nt of
Operations and Equity, both as of June 30 , 1982. Attached hereto
and included herein by r eference as "Exhibit EE" and "Exhibit FF"
are, respectively, Publi c Service's Comparative Balance Sheet
dated June 30, 1982 and Comp arative Statement of Income for the 12
months ended June 30, 1982 . Also attached hereto and incorporated
herein by reference as "Exhibit G " is a statement of the capital
structure of Colorado-Ute as of June 30 , 1982, and pro forma
capital structure as of the same date giving effect to the
anticipated cost and financing of the Tra nsmission Line.
9. The need for the proposed Trans mission Line is based on
the requirements of Colorado-Ute , Public Serv ice and Western.
Public Service n ee ds its share in the capacity of the line betwee n
Rifle and Grand Juncti on to provide adequate service to its
co·1sumers in its Grand Jun ction Service Area. Colorado-Ute n eeds
its share in the capac ity of the e ntire line to meet its load
requirements and maint ain system reliability in wes tern Colorado .
Western's needs for additional transmission capacity are set
forth in its letter dated July 9, 1982 addresse d to Girts Krumin s ,
the President of Colorado-Ute, a copy of which letter is attach ed
as "Exhibit H". The line , wh en constructe d will further serve to
strengthen the interconnected transmission s ystem in the area .
Public convenience and ne cessity requires this granting of this
application.
10. The only public utilities or power and e nergy suppliers
in the State of Col orado , other than those a lready mentioned , that
might be affected by the proposed Transmission Line are the
Tri-State Gene r a tion and Transmission Association, Inc. and the
-8-
Platte River Power Authority. Neither of. these power suppliers
have electrical loads in western Colorado , and the Transmission
Line will not be located in any portion of their service
territories. The proposed line will enter the certificated
territories of six of the members of Colorado -Ute, said members
being:
Delta-Montrose Electric Association
Empire Electric Association, Inc.
Grand Valley Rural Power Lines , Inc.
Holy Cross Electric Association , Inc.
La Plata Electric Association, Inc.
San Miguel Power Association, Inc.
In addition, since the proposed Transmission Line will be
interconnected with tran smission lines owne d by Western and Public
Service, power can be delivered for retransmission to all other
Colorado-Ute members.
I
11. Applicants will submit to the Commission additional
information and data in connection wi th this Application, at the
hearing of this Application. Although Western is not and will not
be a party to these proceedings , it will appear and present
testimony of its need and participation in. the project.
WHEREFORE, Applicants pray that the Corrunission grant them a
Certificate of Public Convenience and Necessity to construct,
operate, and maintain the Transmission Line .
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Dated this 6th day of Augu s t, 1982.
STATE OF COLORADO )
Respect fu lly s ubmitted,
COLORADO -UT E ELECTRIC ASSOCIATION, INC.
/s / Howard s . Bjel land
By: Ho ward s . Bjelland , Reg. No. 643
Jonathan P . Sch n eider, Reg. No. 11772
P . o . Box 1149
Montrose , Col orado 81~02
Phone : ( 303 ) 249-4501
PUBLIC SERVICE COMP ANY OF COLORADO
/s / James K. T ar pey
By: James K . Tarpey , Reg. No. 1705
Kelly, Stansfie ld & O'Donnell
900 Public Service Company Building
550 15th Street , Suite 900
Denv er , Colorado 80202
Phone: (303 ) 825-3534
) ss.
County of Montrose )
Girts Krumins, being duly s worn, d eposes a nd says that he is
President of Colorado-Ute El ectric Association, Inc., and that h e
has read the foregoing Applic ation a nd exhibits of Colorado-Ute
and knows the content thereof , and that the same are true
according to his best kno wl edge and belief .
/s / Girts Krumins
Girts Krumins
Subscribed and sworn to before me this
1982. My commission expires:
day of Augu s t,
Notary P ublic
-10-
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
J. K. Fuller, being duly sworn, deposes and says that he is a
Vice President of Public Service Company of Colorado , and that he
has read the foregoing Appplication and exhibits and knows the
content thereof, and that, with respect to Public Service, the
same are true according to his best knowledge and belief.
/s/ J. K. Fuller
J. K. Fuller
Subscribed and sworn to before me this
1982. My commission expires:
Notary Public
-11-
day of August,
KE Y TO NAMES
DMEA Delta -Montr ose Electric Association
EEA Empire Electric Association
DAGGETT
GVRPL Grand Volley Rural Power Lines
GCEA Gunnison County Electri c Association
HCEA Ho ly Cross Electric Association
!REA lntermountoin Rural Electric Association
LPEA Lo Plato Electric Association
SDCEA Songre De Cristo El ectric Association
SIEA Son Isobel El ectri c Association
SL VREC Son Luis Vo lley Rural El ectri c Cooperati ve
SMPA Son Miguel Power Association _______ .__,---.-
GRANO
SECPA Southeast Colorado Power Associat ion
WREA White River Electric Associ ation +
YVEA Yampa Volley Electric Associ ation
® Member System Headquarters
PROPOSED CORRIDOR
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COLORAOO -UTE E XI STING FACILITIES
.JOINTLY OWNEO FACILITIES (COLO -UTE 8 OTHERS)
PUBL I C SERVICE COMPANY OF COLORAOO 8
MOUNTAIN PARKS ELECTRIC, INC.
WESTERN AREA POWER AOMINISTRATION
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SYMBOLS
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NUCL EAR POWER PLANT
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SYSTE M MAP
EN LARGED AS OF OCT. I , 1981
Colorado-Ute Electric Association, Inc.
Telephone (303) 249-4501
P . 0 . Box 1149
Montrose, Colorado 81402
Mr. A. M. Gabiola, Area Manager
De p artment of Energy
Western Area Power Ad ministration
Post Office Box 116 0 6
Salt Lake City, Utah 84147
Mr. J . K. Fulle r, Vi c e President
Public Service Company of Colorado
Post Off ice Box 840
Denver, Colorado 80201
Gentlemen:
EXHIBIT C
TWX 910-929-6924
Augus t 2 , 1 9 8 2
Rifle-Grand Junction 345 kv Transmission Line
Pu r suant t o d i scussions among Publi c Service Company of ·
Colo rado (Pub lic Service ), Colo rad o -Ute Electric As so c iation,
In c., (Co l orad o-Ute ), a nd the Western Area Pow er Admin istration
(Western ), and with reference to the January 22, 19 8 2 letter
between Colorado-Ute and Public Service, (copy attached ),
Colorado-Ute and Western propose to construct, operate, and
maintain a 345 kv transmission line from Colorado-Ute's Rifle
Substation through Grand Junction to the San Juan Powerplant
Switchyard located in northwestern New Mexico. Also, with
reference to said discussions, Public Service has determined that
it will participate in the section of 345 kv transmission line
from Colorado-Ute's Rifle Substation to Colorado-Ute's Grand
J u nction Substation site.
Therefore, based on t h e above pre mises, the follo wing summ ar-
izes the intent and mutual undertakings of the parties:
l . A 345 kv tran s mission line will l:::e constructed fro m
Co lo ra do -Ute 's Ri fle Subs tation t o Grand J un cti on S ub stati on .
Colorado -Ute, Public Service, and Wes t e r n will share the cos t and
capacity of the 345 kv line, including te r minal facilities, but
excluding facilities required to =canm~r~ local loads served by c. .'.:) ;.·. /~-.:.. _.;--
Mr. Gabiola
Mr . Fuller -2-August 2, 1982
Colorado-Ute and Public Service. A one-line diagram of the
proposed system is attached. The capacity entitlements and cost
responsibility will be as follows:
Rifle-Gnd Jct
Rifle Sub 345 kv Line Gnd Jct Sub
Colorado-Ute 37.5% 37.5% 29.2%
Public Service 25.0% 25.0% 41.6%
Western 37.5% 37.5% 29. 2%
TOTAL 1 00 .0% 100.0% 100.0%
2. It is r~co gnized that Public Service does not presently have
transmission capacity between. its Ri f le 23P kv Substation and
Colorado -Ute's Rifle 345 kv Substation. It is agreed that
Colorado -Ut~ shall make such capacity available to Public Service
in exchange for a like amount of capacity between the Grand
Junction 345 ':v Substation and a future 230 kv substation located
in the Fruita area. The details of such arrangements shall be in
the defini ti v e agreement referenced in pa~agraph 9 o f this letter.
agreement.
3. Immediately following the execution of this Letter of Intent,
Colorado-Ute shall file an application with the Colorado Public
Utilities Commission for a certificate of public convenience and
necessity for construction, operation, and maintenance of the
Rifle-San Juan transmission line including the Rifle-Grand
Junction 345 kv portion thereof. Colorado-Ute shall be
responsible ~or completing the environmental impact statement.·
Public Service and Western will assist Colorado-Ute in the
completion of this work.
4. Responsibility for the design, construction, operation, and
maintenance of the Rifle to Grand Junction 345 kv line will be
determined in the definitive agreement referenced in paragraph 9
of this agreement; however Colorado-Ute shall design, construct
operate, and maintain the 345 kv terminal facilities at its Rifle
Substation and Grand Junction S ub station site on behalf of the
Mr. Gabiola
Mr. Fuller -3-August 2, 1982
participants. The cost of design, construction, operation, and
maintenance shall be shared in accordance with each participant's
capacity entitlement; provided, that to the extent practical,
routine ma intenance will be performed by the parties on a
reciprocal basis without monetary payment. It is the intent of
the participants to proceed with the constru ction of the
transmission line and associated terminal facilities as soon as
possible.
5. As required, the parties will appoint an engineering and
operating committee which will continue to perform power flow,
transient stability, and other technical studies to determine
operating characteristics , transfer capability and design
parameters for the proposed transmission line and terminal
facilities •. The cost of such studies shall be shared in
proportion to each pa~ticipant's transmission line capacity
entitlement •
. 6. Any participant may tap or interconnect with the Rifle to
Grand Junction transmission line for its own purposes. All such
plans shall be subject to the approval of the other participants,
which approvals shall not be unreasonably withheld. Such plans
shall be reviewed for completeness and conformance to sound
engineering principles and interconnected system oreration. The
cost of such taps or interconnections shall be borne by the
participant desiring the modification or as otherwise agreed in
the event more than one participant benefits.
It is recognized that the switching facilities at Rifle and
Grand Junction are configured in a breaker and one half
arrangement, but will initially be operated as a ring to minimize
capital expenditures. It is agreed, therefore, that the project
partici.pants will bear their share of future costs for the omitted
circuit breakers and related equipment based on the benefits
received.
7. After completion of the proposed Rifle to San Juan 345 kv
l ine the United States and Colorado-Ute plan to jointly
participate in uprating the Uni ted States' existing Rifle to
Shiprock 230 kv line for 345 kv operation. Following the upr ating
of Western' s Rifle to Shiprock line and when required to meet load
growth and other electrical requirements, Colorado-Ute and Western
plan to construct a second 345 kv transmission line l:::etween Rifle
Mr. Gabiola
.Mr. Fuller -4-August 2, 1982
and the Shiprock Substation. To the extent that Western and
Colorado-Ute make provisions for such a second Rifle to
Shiprock line by initially arranging for additional right-
of-way or installing double-circuit towers in certain locations
to meet environmental requirements, Public Service shall not
be responsible for any costs associated with this future
line.
8. The participants will make every effort to meet their
financial obligations in a timely manner . If, however,
necessary appropriations and financing are not made available
to a participant, then the other participants hereby agree
to release and absolve such participant from any liability
or responsibility in connection with the project.
The participants will make every effort to meet the
general obligations under this letter agreement and the
definitive agreement to be entered into purs~ant to paragraph 9
of ~his agreement. If, however, because of regulatory
restrictions of any kind, it becomes impossible to construct
this project in a timelj· manner, each party reserves the
right to withdraw from its participation in this agreement
without further liability or responsibility in connection
with the project.
9 .. Following the execution· of this letter, it is the intent
of the parties to proceed to incorporate these items into
definitive agreements. The parties will make their best
efforts to complete such agreements as soon as possible.
If the foregoing is satisfactory to you, please indicate
your acceptance by signing three copies of this letter and
returning a copy to each of the other parties.
y yours,
Li.~·~ .. ·>-..
PUBL~7RVICE
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Colorado-Ute Electric Association, Inc.
Telcphone (.303 ) 249-4501
_ .........
Mr. J. K. Fuller
P. 0. Box 1149
Montrose, Co lorado 81402
Public Service Company of Colorado
P.O. Box 84 0
Denver, Colorado 8020 1
Dear ~lr. Fuller:
Rifle to Grand Junction Area
Transmission Facilities
TWX 910-929-6924
January 22, 1982
R£C'U JAN 2 5 19 62 .r
With reference to the January 8, 1982 meeting in your office,
this letter summari.~es the discussion and understandings reached
as follows:
1. Public Service Co mpany of Colorado is planning to proceed
with the immediate construction of transmission system
additions to serve oil s h ale related loads deyeloping in
an area north of the Colorado River in the general
vici n ity of the town of Parac hu te, Colorado. Th ese
system additions initially consist of a s ub station at
Parachute and a radial 230 kv line from the Company's
existing Rifle-Cameo 23 0 kv line north to the Colony
Project (Davis Substation ). It is important that these
facilities be completed and placed in service as soon as
possible.
Colorado-Ute has been planning to proceed with the
immediate construction of a 138 kv line from its Rifle
Substation to a new substation at the Battle~ent Mesa
Project. These facilities would supply power to the Holy
Cross Electric Associat~on, which has loads developing in
and around the co mmu nity of Battle ment Mesa. Battlement
Mesa is located across the Colorado River from the town
of Parachute. At t h e present time, loads in the Battla-
ment Mesa area that exceed 100 kw are certificated to
Public Service and are intermingled with Holy Cross
loads.
---.... _....,
.. .... . ..
"· .•.
Mr. J. K. Fulle r -2 -January 22, 1982
2.
Public Service and Co lo rado -Ute h ave app l ied for Special
Use ~ermits from Garfield County to construct and operate
the facilities menti oned a b ove.
The capacity of t h e existi ng P u blic Service Rifle-Cameo
23 0 kv line a n d t h e proposed Colorad o -Ute Rifle-Battle-
ment Mesa 1 3 8 kv l ine is s u ffic i e n t to serve the
near-term l o ads of b oth P u blic Service a n d Colora d o-Ute·,
b ut not th e comb in ed l o a d s a n ticipated b y t h e l ate
1 9 80's .
While the existing Public Service Rif le-Cameo 230 kv line
can -be uprated for 345 kv operation, it is believed that
it can be best used .·as part of the subtransmiss ion system
to serve Colorado River Valley loads between Ri f le and
Cameo. It is contemplated that this line can be operated
at 23 0 kv into the foreseeable future. As a result, it
is agreed that Public Service and Colo r ado ~ute will
jointly proceed to establish, as soon as practicable, a
345 kv system between Rifle and the Grand Junction area
(wh i ch inc l udes the Cameo gene r ating station ), and a tie
fr om the 345 k'l s y st em to the t ra n s mission s y s tem in th e
Gr an d Jun ct ion area. Add iti on a l taps o n th e 345 k v
system may be made by P u b l ic Service a n d Colorad o-Ute
individ u ally or joint l y as required by loads in the
area.
As you know, Colorado-Ute and the Weste~n Area Power
Administration are presently plannin0 a double-circuit
345 kv line from.Rifle to Paonia to Montrose, and beyond,
to be constructed as soon as the environmental and
regulatory requirements can be completed. Therefore,
Colorado-Ute will initiate discussions with WAPA to
consider routing one of these circuits between Rifle and
t h e · general area aro u nd Gra n d J u nction jointly with
P u bl i c Service.
3. With refere n ce to the delivery o f po wer to the Ho ly Cross
El ec t r i c As s ocia t i on, it is agr eed t h a t Ho ly Cr o ss may
connec t a 25 kv Jist ri bution ci rc u i t at the Co mp a n y 's
'· .. . . ... ., ....
Mr. J. K. Fuller -3-January 22, 1982
Parachute Substation to serve its Battlement Mesa load3
including certain loads exceeding 100 b; which are
presently certificated to Public Service. It is further
understood that Holy Cross has agreed to, and will wheel
power to these Public Service loads in the Battlement
Mesa area that excee.d 100 kilowatts. It is understood
that Public Service will initially wheel power for
Colorado-Ute to its Parachute Substation. Based on this
arrangement and understanding, Colorado-Ute has suspended
its plans to construct a 138 kv transmission line between
the Rifle-Battlement Mesa area and has withdrawn its ·
Special Use Permit application before Garfield County.
4. It is agreed that P~blic Service Company ~ay connect a 25
kv circuit at Colorado-Ute's Rifle Subscation. to serve
the town of Rifle. Colorado-Ute will wheel power for
Public Servic~ to Colorado-Ute's Rifle 25 kv Substation
bus.
5. An existing wheeling agreement by which reciprocal
whe eling services are exchanged involving deliveries for
Public Service at Colorado-Ute's 69 kv Rifle Substation
Bus and deliveries for Colorado-Ute at points on the
Public Service 115 kv Malta-Poncha transmission system
will be extended to cover wheeling of additional power as
provided for in items 3 and 4 above. Initially, Public
Service will provide up to 12 ~1W of 25 kv capacity at the
Parachute Substation for use by Colorado-Ute and
Colorado-Ute wi 11 prov iJe up to 1 2 MW o e 2 5 k'T capacity
at its Rifle Substation for use by Public Service .
6. Public Service and Colorado -Ute agree to provide when
appropriate a future interconnection between the two
systems at or near Davis Substation (Colony Project).
7. Public Service and Colorado-Ute will continue joint
planning studies to further define details for the 345 kv
system and as~ociated ties to lower voltage systems
referred to in item 2 above. In addition, these studies
will include an analysis of long-range needs for
,_ .. . ,, ..,. -.. .. .
".
( .... ..
c-
Mr. J. K. Fuller -4-Janua ry 22, 1982
additional distribution substation capaci~y in the
Parachute-Battlement Mesa and Rifle areas and provisions
for both parties to share such additional substation
capacity in an equitable manner.
8. It is intended that the above understandings and agree-
ments will be incorporated into an interconnection and
transmission service agreement between the parties.
If Public Service Company so concurs with the above, please
indicate such concurrence by signing and returning a fully
executed copy of this letter to this off ice.·
·very truly yours,
~le~~:r
Vice President
~ K. Fuller
FAK:mj
cc: Mr. Ed Grange, Holy Cross Electric Association
CAM£0
RIFLE-GRAND JUNCTION AREA
TRANSMISSION SYSTEM
ONE-LINE DIAGRAM
JULY 1982
CRA IG
(WAPA )
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(WAPA)
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GRANO JUN CTIO N
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MONTROSE
LEGEND
DI ST1H9 SYST'EM
CAlllEO -iRANO JUNCTION -FlllJ ITA 230 kV FACILIT IES
$411 kV .iotNT P!IO J ECT
--i:J--PO'lrtR CIRCUIT eREAl<[R
UTE • COLORt.00 •UT E ELECTR IC ASSOCl.t.T ION 1NC.
PS C PV8UC SERVI<% CCiMPlllNY CIF C~RA OO
WA PA • WESTERN AREA POWEii ADM I NI STRAT ION
Department Of Energy
PO. '30:· 1006
Sa it l-ake City, Utah 84 147
Mr. Girts Krumins, President
Colorado-Ute Electric Association
P. 0. Box 1149
Montrose, CO 81402
Dear Mr. Krumins:
In Reply
Refer to: LOOOO
33 0 ./6
This letter agreement amend s and supersedes that original agree ment dated
Novemb er 13 , 1980, between Colorado -Ute Electric Association, Inc .
(Colorado -Ut e ) and t he Western Area Power Admini stratio n (W estern).
EXHIBIT D
Colorado -Ut e and Wes tern plan to finance, con struct, oper ate, and maintain a
345-kV tran s mission sys te m between Craig and the Four Corn e r s area . The
Parties intend to construct the sy stem in a coordinated manner and to share
capacity entitlements, costs, and responsibilities rela ti ve to certai.1 of the
features . The purpose of this l etter i s to recogni ze eact Party 1s intent to
par tic ipate, to de scribe t he tra nsmi ss ion system involved , to set forth each
Par t y 1s capacity entitlements, and to discuss relat ed matt e r s agreed upon .
Des cript ion of Transmission Sy stem
It is planned to construct the 345-kV transmission system in three phases. The
first phase will consist of two single circuit 345-kV iines between Craig
Switc hyard and Co lorado -Ute 1s Rifle Substati on (Colo rad o-Ute 1s Craig-Rifle line
was converted to 345-kV operation in 1982, and Western's Craig-Rifle line will
be uprated to 345-k V and extended to Colorado-Ute 1s R~fle Substation by
Nov emb er 1983); a single circuit 345-kV line between Rifle Substation and San
Juan Switchyard via a corridor passing in the general vici~ity of Grand
Junction, Delta, Montrose, Norwood, Cortez, and Durango, Colorado; a 345-kV
line connecting San Juan Switchyard and Shiprock Substation (by others); and a
345-kV li ne between Shiprock Substation and Four Corners Switchyard.
Phase 1 will include 345-kV switchyard additions at Craig, Rifle, (Colorado -
Ute), San Juan, Shiprock, and Four Corners; new 345-kV substations in the
vicinity of Grand Junction, Norwood, Lost Canyon, and Durango; and 345/230-kV
interconnections at Craig, Rifle, Grand Junction, and Shiprock.
It is t he intent of the Parties to co mpl ete t he first phase of t he 345-k V
tra nsmi ssi on sys tems as s oon as possible . It i s esti mated that 24 t o 30 months
will be required to co mpl ete t he work following receipt of necessary regulatory
approvals.
2
The second phase which is expected to be required by 1987 will consist of
uprating We stern's 230-kV Rifle (W estern) -Curecanti-Lost Canyon-Shiprock lin e
to 345-kV; connecting Western's Craig-Rifle (Color ado-Ute ) 345-kV lin e into
Western's Rifle Substation; a single circuit 345-kV line interconnecting
Montrose and Curecanti Substations (or an electrical equivalent); a new 345-kV
switchyard at Rifle (Western); and a new 345-kV s ubstation at Curecanti and
North Fork.
The third phase, when required, will consist of adding a new single ci~cuit
345-kV line between Colorado-Ute's Rifle Substat ion and Shiprock Substation.
It is planned, where possible, to acquire sufficient right-of-way initially so
that the two 345-kV lines to be constructed between Rifle and San Juan/Shiprock
in Phases 1 and 3 can occupy a common right-of-way.
A one-line diagram of the proposed system is included as Exhibit A to this
letter . The project will also include extensions of communication and control
systems to the various substations and switchyards.
Capacity Entitlements
The Parties hereto and others will share, as follows, the capacity of Phase 1
of the 345-kV transmission system between Craig and Four Corners area,
including line termination facilities and interconnections but excluding
facilities that connect to the local area system constructed solely to serve
loads :
Capacit:i: Entitlements in Percent
Colorado Publi\:
Ute Western Service Others
Craig-Rifle (Ute) 345-kV Line 64 0 0 36
Craig-Rifle (W estern) 345-kV Line 0 100 0 0
Rifle (U te)-Rifle (Western)
345-kV Line 0 100 0 0
Rifle (U te)-R~yle (Western
230-kV Lin~ 64 0 0 36
Rifle (U te)-Grand Junction
345-kV Line 37.5 37.5 25 0
Grand Junc~ion-San Juan
345-kV Line 50 50 0 0
Shiprock-San Juan 345-kV Linell 0 0 0 100
Shiprock-Four 17orners
345-kV Lin~ 50 50 0 0
Interconnection at Rifl e (U te )
345 /23 0-k V Y
Interconnection at Shiprock-
345/230-kV Y
100
0
0
100
0
0
3
0
0
1/ To the extent that the parties capacity entitlements are pre-
served' it is p 1 anned that the 345-kV transmi SS ion system between San
Juan, Shiprock, and Four Corners will be considered a co mm on 345-kV bus
for connecting the systems of Colorado-Ute and Western with participants
in the San Juan and Four Cor~ers Project .
2/ The interconnections at Rifle (Colorado-Ute ) and Shiprock Sub -
statTons provide for power transfers between 345 and 230-kV transmissions
systems, and contribute substantially to reliability of the bulk power
transmission system. They are expected to be approxi ma te ly equa l in cap-
acity and cost. Recognizing that both Western and Colorado-Ute share
responsibility for reliable power system operation and that the util iza-
tion of the interconnections by the pa rties for pow er transfers wi ll vary
from ti me to ti me, the parties agree to exchange capacity i n the int er-
connection faci li ties as necessary to best accommodate t he needs of both .
Participation by Public Service Company of Colorado
Public Service Company of Colorado (Publi c Service ) plans to parti cipate
in a part of the proposed 345 -kV system to be constructed between Rifle
(Colo rado -Ute ) and Grand Jun ction Substations during the Phase 1 cons -
truction program . A three party agreement dated August 2, 198 2 su mm a-
rizing the intent and mu tu a 1 undertakings of the parties is inc 1 uded as
exhibit B to this letter.
Cost Allocation
It is intended that costs for the 345-kV transmission system will be
allocated to the parties in proportion to capacity entitlements .
Related Matters
1. Establishment of E&O Committee
An interim Engineering and Operating Committee (E&O) will be formed as
soon as possible to provide for joint review of all technical aspects
of the proposed 345 -kV transmission system including system studies
and other duties as may become necessary . Each party will designate
one or more representatives to the E&O Committee as necessary to
accomplish its purpose. Such Co mmi ttee shall serve until the formal
agreement is executed or longer if otherwise agreed .
2. Use of Faci l ities
It i s recognized that during the process of constructing the 34 5-kV
transmission system, certain facilities of either party may need to be
taken out of service from time to time. During these periods, the
4
parties agree to accommodate each other by sharing of avai l ab;e re~aini~g
transmission system capacity. The party being acco mm odated wil l ~eimburse
the other party for any financial or other lo ss resu l ting from accommo-
dation. The parties will make their best effort to minimi ze outage cur-
tailments and to utilize remedial action schemes as needed to enhance
system transfer capability whenever facilities of either party are out of
service for construction of the 345-kV transmission system.
3. System Studies
As required, the parties will perform power flow, transient stability,
and other techni ca 1 studies to demonstrate operating characteristics
and transfer capability of the proposed transmi$Sion configuration and
design parameters for the facilities and equipment co mpon ents there-
of . The costs of such studies shall be shared equally.
4. Series Compensation
Should a party plan to install or participate in the installation of
series capacitors in the Rifle to Four Cor ners area or on related
transmission lines, the parties will conduct studie s ne cessary to
exa min e the associated changes in subsync hronous resonance haza rd s and
any other studi es if ne eded .
5. Join t Transmission System Operation
Believing th~t economic and other benefits will be derived from j oin t
transmission system operation, the parties sha ll investigate and
determine the cost and benefits of such operation. The capability and
shared used of the joint system will be determined considering through
power transfers as well as internal loads. It is understood that
transmission lines operated at 230-kV and above will generally be
included in the joint transmission system.
6. Taps and Interconnections
Either party may tap or interconnect with the 345-kV joint trans-
mission project for its own purposes; provided that the E&O Committee
shall review such plans for completeness and conformance to sou nd
engineering principles. The cost of such tap or interconnection shall
be borne by the party desiring the modification , or as otherwise
agreed in the event that both parties benefit.
7. Environmental Studies
Colorado-Ute will conduct environmental studies and prepare neces sary
environmenta l reports and documents related to the Rifle-S an
Juan/Shiprock portion of Phase 1 of the project. Such reports and
documents sha 11 be prepared to the standards and procedures required
by the Rural Electrification Admini strat ion, United States Department
of Agriculture . Western will parti c ipate with the Rural Electrifi-
cation Administration as a cooperating agency in the preparation of an
5
environmental statement for the project . Western wi 11 conduct environ-
menta 1 studies and prepare necessary en vi ronmen ta 1 reror-t: s ~rid document s
related to th e uprating of it s Craig-Rifle (C o1ora~::-U!e) :~rc'..l it , th'e
future uprating of the Rifle (W estern )-Shiprock circuit, the Shiprock-Four
Corners Circuit, and Shiprock Substation additions.
8. Financial Participation
Western and Co 1 or ado-Ute sha 11 inake every effort to obtain funds to
meet their obligations in a timely mann er; however, it is understood
that the participation of We stern and Colorado-Ute in the pruject is
contingent upon each party obtaining the necessary appropriations and
financi ng , and, if such necessary appropriations and fi nan cing are not
available to a participant for this project, then the other partici-
pant hereby agrees to release and discharge s uc h participant from any
liability or respon sibility in connection wi t h t hi s project.
9. Ope ration and maintenance
To the extent possible, it is planned to divide the operation and
maintenance responsibilities for the propose d jointly owned 345-kV
transmission project in proportion to the capacity entitlements of
each party. The objective will be to minimi ze the need for monthly
and annual billings for operation and maintenance work , provided, that
the pa rties will share extraordinary maintenance, including major
replacement expenses, on the basis of their capacity entitlements in
the joint project.
10 . Exec ution of Final Agreement
Following the exec ution of this letter, it is the int ent of the
parties to proceed to incorporate these items into Contract No .
14-06-400-2463 for Interconnections and Transmission Service. In
addition, the parties will coordinate with other entities owning
existing facilities at Craig Station, Colorado-Ute Rifle Substation,
San Juan Station, and Four Corners Station in order to determine fin-
ancing, construction, ownership, operation and maintenance responsi-
bility, and the joint use of facilities necessary to accommodate the
project. The parties will make their best effort to complete a
definitive agreement as soon as possible, and each ·party shall be re-
sponsible for its share of the project costs prior to the execution of
the definitive agreement.
If the foregoing is satisfactory to you, please indicate your acceptance
by si gning both copies of this letter in the space provided below and
return one copy to me.
Sincere ly ,
A. M. Gabi o 1 a
Area Manager
6
Enc losur e
in uuo~icate
Accepted:
AUG 5 1982
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LEGEND
EXISTINQ
PffASE I -
PHASE lt
CIRCUIT BltEAKER --0--
POWER T'RAHSFORMER ~
COLORADO-UTE C·U
UNITED !T:OTES U.S.
PU8LJC SERVICE: p S C
COMPANY at COLORADO
SAN ~UAN NOTE:• L.OST CANTON SU8STATION CAN SE
CONNECn:D TO EITitE" 34!5 kll UNE •
RIFLE -SA N JUAN 34~5-lcV TRANSMISSION SYSTEM
PHASED DEVELOPMENT
' ..
Colorado-Ute Electric Association, Inc.
Telephone (303) 249-4501
P. 0. Box 1149
Montrose, Colorado 81402
Mr. A. M. Gabio l a, Area Manager
Department of Energy
Western Area Power Administration
Post Office Box 116 0 6
Salt Lak e City, Utah 84147
Mr. J. K. F u l l er, V ice Preside n t
Public Se rvice Company o f Colo r ado
Post Office Box 840
Denver, Colo r ado 80201
Gentlemen :
TWX 910-929-6924
August 2, l 982
Rifle-Grand Junction 345 kv Transmi s s ion Line
Pursuant to discussions among Public Service Company of
Colorado {Public Servi c e), Colorado -Ut e Electri c Assoc i ati on,
I nc ., (Colo rado -Ut e ), a nd t h e Wes tern Are a Pow er Ad ministr a tion
(W estern ), an d wi th referenc~ to t h e Jan u ary 22, 1 98 2 letter
between Colorado-Ute and Public Service, (copy attached ),
Colorado-Ute and Western prop ose to construct, operate, and
maintain a 345 kv transmissi on line fro m Colorado~Ut e's Rifle
Substation through Grand Junction to the San Juan Powerplan t
Switchya r d located in northwestern New Mexico. Also, with
reference to said discussions, Public Service ha-s determined that
it w~ll participate in the section of 345 kv transmission line
from Colorado -Ute's Rifle Substation to Colorado -Ute's Grand
Junction Substation site.
Therefore, based on the above premises, the following summar -
izes t h e intent a n d mutual undertakings of the parties:
l. A 345 kv trans~ission l ine will 1::e co n ~tructed fr om
Co lo rad o -Ute's Rif l e Su bstati on t o Gra n d J u ncti on S u bstation .
Colo r ado -Ute, Publi c Se rv i c e, and Wes t ern wil l s ha re t h e cost an d
capacity of the 345 kv line, including terminal facilities, but
excluding facilities required to convert local loads served by
Mr. Gabiola
Mr . Fuller -2 -August 2, 1982
Colorado-Ute and Public Service. A one-line diagram of the
pro p o se d system is attach ed. The capacity e n title ments and cost
respo nsibility will be as follows:
..
Rifle-Gnd Jct
Rifle Sub 345 kv Line Gnd Jct S u b
Colorado-Ute 37.5% 37.5% 29.2%
Public Service 25.0% 25.0 % 41. 6%
Western 37.5% 37.5% 29.2 %
TO TAL 1 0 0.0% 1 0 0.0 % 1 00 .0 %
2. I t is r~c ogni z ed t hat Publi c Se r vi c e doe s not pre sent ly have
transmission capacity betwe e n. its Rifle 230 kv S~bstation and
Colorado -Ute's Rifle 345 kv Substation . It is agreed that
Colorado -Ute shall make such capacity available to Publi c Service
in exchange for a like amount of capacity between the Grand
J 1Jnction 345 kv Substation and a future 230 kv substation located
in the Fruita area. The d e t ails of such arrangements shall be in
the definitive agreement referenced in parag r aph 9 of this letter
agreement .
3. I mm ed iate ly f ollo wi n g the exec u tion of this Letter of I n te n t,
Co l orado-Ute s h all fi l e an application with t h e Colorado Pu b l ic
Utilities Commission for a certificate of public convenience and
necessity for construction, operation, and maintenance of the
Rifle-San Juan transmission line including the Rifle-Grand
Junction 345 kv portion thereof. Colorado-Ute shall be
responsible for completing the environmental impact statement.·
Public Service and Western ·will assist Colorado -Ute in the
completion of this work • .
4. Responsibility for the design, construction, operation, and
maintenance of the Rifle to Grand Junction 345 kv line will be
determined in the definitive agree ment ref~renced in paragraph 9
of this agree ment; however Colorado-Ute shall design, c o nstru ct
operate, and maintain the 345 kv terminal facilities at its Rifle
S u bstation and Grand Junction S u bstation site on be h alf of t h e
Mr. Gabiola
Mr. Fuller -3-August 2, 1982
participants. The cost of design, constructi0~, op~ration, and
maintenance shall be shared in accordance ~i~h ea~h participant's
capacity entitlement; provided, that to the extent practical,
routine maintenance will be performed by the parties on a
reciprocal basis without monetary payment. It is .the intent of
the participants to proceed with the construction of c.he
transmission line and associated terminal facilities as soon as
possible.
5. As required, the parties will appoint an engineering and
operating conunittee which will continue to perform power flow,
transient stability, and other technical studies to determine
operating characteristics, transfer capability and design
parameters for the proposed transmission line and terminal
facilities .. The cost of such studies shall be shared in
proportion to each participant's transmission line capacity
entitlement;
. 6. Any participant may tap or interconnect with the Rifle to
Grand Junction transmission line for its own purposes. All such
plans shall be subject to the approval of the other participants,
which approvals shall not be unreasonably withheld. Such plans
shall be reviewed for completeness and conformance to sound
· eng in?.ering principles and interconnected system operation. The
cost of suc..:h taps or interconnections shall be borne by the
participant desiring the modi fication or as otherwise agreed in
the event more than one participant benefits.
It is recognized that the switching facilities at Rifle and
Grand Junction are configured in a breaker and one half
arrangement, but will initially be operated as a ring to minimize
capital. expenditures. It is agreed, therefore, that the project
participants will bear their share of future costs for the omitted
circuit breakers and related equipment based on the ~nefits
received.
7. After completion of the proposed Rifle to San Juan 3'45 kv
line the United States and Colorado-Ute plan to jointly
participate in uprating the United States' existing Rifle to
Shiprock 23 0 kv line for 345 kv operation. Following the uprating
of Western' s Rifle to Shiprock line and when required to meet load
growth and other electrical requirements, Colorado-Ute and Weste rn
plan to construct a second 345 kv transmission line 'cetween Ri fle
Mr. Gabiola
Mr. Fuller -4-August 2, 1982
and the Shiprock Substation. To the extent that Western and
Colorado-Ute make provisions for such a second Rifle to
Shiprock line by initially arranging for additional right-
of-way or installing double-circuit towers in certain locations
to meet environmental requirements, Public Service shall not
be responsible for any costs associated with this future
line.
8 ~ The participants will make every effort to meet their
financial obligations in a timely manner. If, however,
necessary appropriations and financing are not made available
to a participant, then the other participants hereby agree
to release and absolve such participant from any liability
or responsibility in connection with the project.
The participants will make every effort to meet the
general obligations under this letter agreement and the
definitive agreement to be entered intQ pursuant to paragraph 9
of this agreement. If, however, because of regulatory
restrictions of any kind, it becomes impossible to construct
this project in a timely manner, each party reserves the
right to withdraw from its parti~~pation in this agreement
without fur~her liability or responsibility in connection
with the project.
9. Following the execution of this letter, it is the intent
of the parties to proceed to incorporate these items into
definitive agreements. The parties will make their .best .
efforts to complete such agreements as soon as possible.
If the foregoing is satisfactory to you, please indicate
your acceptance by signing three copies of this letter and
returning a copy to each of the other parties .
yours ,
WESTERN k~EA PO\'lER AmHNISTRATION
. ··-... ~· . . . •; . . ..
()
--·---·------·
Colorado-Ute Electric Associ::i.tion, In.c.
Telt."p hon c (.303) 249-4501
Mr. J. K. Fu ller
.. . .....
. • ....... ;
·' ..
P. 0 . Box 1149
Montrose, Co lo r:ldo 81402
Public Service Company of Colorado
P.O. Sox 840
Denver, Colorado 8020 1
Dear Hr. Fuller:
)
Rifle t o Gra n d J u nctio n Area
:Transm iss ion Fa ci li ties
.
TWX 910-929 -6924
Ja nu ary .22, 198 2
R£C'O JAN 2 5 1982
y
•.r •
With reference to the January 8, 1982. meeting in you r office,
this letter summarizes the discussion and understandings reached
as follows :
--. ..... ~
1. Public Servic~ Company of Colorado is planning to proceed
with the immediate construction of transmission system
additions to serve oil shale related loads deyeloping in
an area north of the Colorado River in the general
v i cinity of the town of Parachute, Colorado . These
s y st em addi t ion s i niti a lly co ns i s t of a subs t at i on a t
P ara chu te and a r ad ial 2 30 k v l i n e fr om th e Comp a n y's
exis t in g Rif l e-Came o 23 0 kv li ne no rth to t h e Colon y
Project (Davis S u bstation). It is i mportant that these
facilities be co ~plete d and placed in service as soon as
possible. --·
Colorado-Ute has been planning to proceed with the
imm~diate construction of a 138 kv line fro m its Rifle
Substation to a new substation at the Battlement Mesa
Project . These facilities wo~ld supply power to the Holy
Cross Electric Association, which has loads developing in
and around th~ co mm unity of Battlement Mesa. Battle ment
Mesa is located across the Colorado River from the town
of Parachute. At the present. ti:ne, loads in the Battle-
ment Mesa area that exceed 100 kw are certificated to
Pu blic Ser?ice a nd are i n ter ming l ed with Ho ly C ~oss
loads.
· .
C·-· ... . . .
Mr. J. K. Fuller -2-Jan u ar7 22, 1 982
Public Service a n d Colorado-U~e have a~;:!e~ ~~= Special
Use ~ermits fro m Garfield Co u nty to co n struct and operate
/ the facilities mentioned above.
2. The capacity of the existing Public Service Rifls-Cameo
23 0 kv line and the proposed Colorado-Ute Rif le-aattle-
ment Mesa 138 kv line is sufficient to serve the
near-term loads of both Public Service and Colorado-Ute·,
but not the combined loads anticipated by the late
1980's. · ........
·.···
While the existing Public Service Rifle-Cameo 23 0 kv line
can -be uprated for 345 kv operati o n, it is b elieved that
it c an be b est u sed :as part o f t h e su b tra n s mi ss io n system
t o s e rv e Colo rad o Rive r Va ll e y lo a d s b etw e e n Rifl e and
Cam e o . It is contemplated that this l i ne c a n be ope r at e d
at 23 0 kv into the foreseeable futu re. As a resul t , it
is ag r eed that Public Service ana Co l o r ado MOte wi ll
jointly proceed to establish, as soon as prac t icable, a ·
34 5 kv system between Rifle and the Grand Junction area
(which includes the Cameo generating station ), and a tie
from the 345 kv system to the transmission system in the
Grand Junction area. Additional taps on the 345 kv
syst em may be mad e by Publi c Service rnd Color a do -Ut e
individually or jointly as req u ired b y l o ads in the
area.
As you know, Colorado -Ute and the W~stern Area Powe r
Administration are presently plannin1 a double-circuit
345 k7 line from Rifle to Paonia to Montrose, and beyond,
to be constructed as soon as the environmental and
regulatory requirements can be completed. Therefore~
Colorado -Ute will initiate discussions with WA?A to
consider routing one of these circuits between Ri f le and
the gene r al area around Grand Junction jointly with
Public Service .
3. With reference to the delivery of power to the Holy Cr oss
Electric Association, it is a~reed that Holy Cross may
connect a 25 kv <li~tributio n circuit at the Com?any's
--------------------. -~-------------------~-~-·---4·.--... ~_.._.,.,.._,.,._~ ..... ---,--.--...~ ....
• ..-1 ;. ·=
·(.:1 .•
%
.. ...... ..
' .
r·
~--~
Mr. J. K. Fuller -3-January 22, 19 82
Parachute Substation to serve its Battlement Mesa load3
including certain loads exceeding 100 kw which are
presently certificated to Public Service. It is. further
understood that Holy Cross has agreed to, and will wheel
power to these Public Service loads in the Battlement
Mesa area that exceed 100 kilowatts. It is understood
that Public Service will initially wheel power for
Colorado-Ute to its Parachute Subst3tion. Based on this
arrangement and understanding, Colorado-Ute has suspended
its plans· to construct a 138 kv transmission line between
the Rifle-Bat~lement Mesa area and has withdrawn its
Special Use Permit application before Garfield County.
4. It "is agreed that P!Jblic Service Compa.!y ;nay connect a 25
kV" circuit at Colorado-Ute's Rifle Subs-1:ation to serve
the town of Rifle.· Colorado-Ute will wheel power for
Public Service to Colorado-Ute's Rifle 25 kv Substation
bus .
5. An -::xisting wheeling agreement by which reciprocal
wheeling services are exchanged involving deliveries for
Public Service at Colorado-Ute's 69 kv Rifle Substation
Bus and deliveries for Colorado-Ute at_points on the
Public Service 115 kv Malta-Poncha transmission system
will be extended to cover wheeling of additional power as
provided for in items 3 and 4 above. Initially, Public
Service will provide up to 12 l-!W of 25 kv capacity at the
Parachute Substation for use by Colorado-Ute and
Colorado-Ute will proviJe up to 12 ~~-of 25 kv caoacitv
at it.s Rifle Substatio:i fo"C use by l?ublic Service·. · -
6. Public Service and Colorado-Ute agree to provide when
appropciate a future interconnection between the two
systems at or near Davis Substation (Colony Project).
1. Public Service and Colorado-Ute will continue joint
planning studies to fu~ther define details for the 345 kv
systein .and associated ties to lower voltage systems
referred to in item 2 above. In addition, these st~dies
will include an analysi~ of long-range ne~ds for
. . . . ·
4 ~
C,, .. ..
C.:, ·•
• . ... ..... . .
Mr. J . K. Full er -4 -January 22, 198 2
additional distribu tio n substation capacity in the
Parachute-Battlement Mesa and Rifle areas and provisions
for both parties to share such additional substation
capacity in an equitable manner.
·.
8. It is intended that the above understandings and agree-
ments will be incorporated into an interconnection and
transmission service agreement between the parties.
If Public Service Company so concurs with the above, please
indicate such concurrence by signing and returning a fully
executed copy of this letter to this office.
~J. K. Fu ller
FAK:mj
Very truly yo u rs,
~~
F. A.~uhl e me i e r
Vice Pr esident
cc: Mr. Ed Grange, Holy Cross Electric Association
·-·
COLORADO-UTE ELECTRIC ASSOCIATION, INC. EXHIBIT E
Assets
Utility Plant (at Cost)
Utility Plant
Constructio n Work
$529,706,137
in Progress 305,993,331
Total Utility Plant
Less Accumulated Depreciation
and Amortization
Net Utility Plant
Investments in Other
Associatio ns
Current Asse ts
General Cash
Construction Fund
Cash
Other Specia l
Deposits
Temporary
Investme nts
Receivables
Materia ls &
S upplies,
at cos t
Prepaid Expense
Total Curre nt Assets
Notes Receivable
Deferred Charges and Other
Assets
2,166,191
4,951,689
14,008,771
3,600,000
12,973,852
21,370,109
6,756,176
BALANCE SHEET
June 30, 1982
$835,69 9,468
77 ,540,142
$758,1 59,326
7,304,323
65,826,788
9,874,926
21,868,298
$863,033,661
Liabilities
Equities
Capital stock of $5 par valu e
Authorized 50 shares, issued
14 shares 70
Patronage Capital
Other Member
Equities
Long Term De bt
Federal Finance
2,823,305
(3,099,5 84)
Bank 532,073,000
Rural Electrifica-
tion Administra-
tion 147,096,484
National Rural
Utilities Coop-
erative Finance
Corp. 53,246,580
Pollution Control
Bonds
Total Long Term
Debt
Current Liabilities
Accounts Payable
Accrued Expenses
Notes Payable
60,849,136
34,638,243
10,2 56 ,427
25,150,000
Total Current Liabilities
(276,2 09)
793,265,200 e
70,044,670
$863,033 ,661
e EXHIBIT F
COLORADO-UTE ELECTRIC ASSOCIATION , INC.
STATEMENT OF OPERATIONS AND EQUITY
12 Mo n ths Ende d Jun e 30 , 1982
Operating Revenue
Operating Revenue Deductions
Production Expense
Other Power Supply Expense
Transmission Expense
Administration & General Expense
Depreciation & Amortization Expense
Taxes
Total Operating Revenue Deductions
Electric Op erating Mar gi ns
Interest & Othe r Dedu cti on s
Interest
Allowance for Funds Used in Construction
Other Deductions
Total Inter 0 st & Other De duct io ns
Ope rating Margins
Non-operating Margins
Total Margins
Equity at Beginning of Year
Equity at End of Year
$112,843,853
37,854,8 05
7,240,596
4,627,029
4,859,192
14,531,828
6,082,688
75 ,196,138
37,647,715
70,318,337
( 34,869 ,149)
105,841
35 ,5 55,029
2,0 92,686
143,691
2,236,377
( 2,512,586)
( 276,209)
..
PUBLIC SERVICE COMPANY OF COLORADO
·COMPARATIVE BALANCE SHEET
ASSETS
EXHIBIT EE
At June 30
Property, plant and equipment, at cost:
Electric
Gas
Steam and other
Common to all departments
Construction in progress
Less accumulated provision for depreciation .
Nuclear fuel, less accumulated provision for
amortization (1982-$3,921,313; 1981-
$2,714,352)
Investments:
Subsidiaries c onsolidated :
Equity at June 30
Notes receivable
Other, at cost
Current assets :
Cash
Temporary cash investments
Accounts receivable, less provision for
uncollectible accounts (1982-$3,693,008;
1981-$2,871,487)
Cu rrent accounts with subsidiaries
consolidated
Notes receivable from associated companies
Notes. receivable
Fuel inventory, at average cost
Materials and supplies, at average cost
Cost of gas delivered but not billed to
customers
Gas in underground storage, at cost (LIFO)
Prepaid expenses
Total current assets
1982
$2,038,613,695
328,965,678
12,29 4 ,926
83,517,920
84,812,004
2,5 48 ,204 ,223
642,785,044
1,905,419,179
22,635 ,23 6
1,928,054,415
80,683,455
4,205,012
72,019
84,960 ,4 86
17,804,220
101,895 ,9 85
1,921,624
14,472,0 10
27,295
68,339,548
46,417,260
20 ,964,284
(5,126,126)
1,428,23 0
268,144,330
1981
$1,517,123,401
31 0,805 ,895
9,434,825
79,228,737
470,006,578
2,386 ,5 99 ,436
566,09 9,1 0 5
1,820,5 00 ,331
8,096 ,378
1,828,596,709
44,494,988
28,442,076
158 ,662
73,095, 726
9,188,391
18,359,267
70,045,841
1,506,844
86,828
61,810,805
42,190,042
4,315,311
(4,391,795)
2,8 0 7,795
205,919,329
Deferred charges:
Debt expense (being amortized)
Other
7,803,531
23,101,427
30,904,958
$2,312,06 4,189
6,767,880
11, 466 ,877
18,234,757
$2,125,846,521
The accounts of the Company since Dec e mbe r 31, 1981 have no t been examined by
independent public accountants.
Not to be made public unless accompanied by footnotes similar to those contained
in the Company's Annual Report for 1981.
77r1 information containrd ltrnin Is gi~n in r1spons1 to your requ1s1 for information covering tlt1 company
and 1101 Jn conn1c1ion with any sale, off,, for sale, or off,, to buy any securities.
PUBLIC SERVICE COMPANY OF COLORADO
COMPARATIVE BALANCE SHEET
CAPIT.<\L AND LIABILITIES
EXHIBIT EE
At Jun e 30
Common stock (Note l)
Retained earnings
Total common equity
Preferred stock (Note 1):
Not subject to mandatory redemption
Subject to manda t ory redemption at par
Long-term debt (Note 2)
Current liabilities:
Notes payable
Long-term de bt due with in one year
Accoun ts paya ble
Cur r ent a cc oun ts with s ub sidiaries
consolidated
Dividends payable
Custome r de pos its
Ace.rued taxes
Accrued interest
Other
Total current liabilities
Deferr ed c re dits :
Cu s tom er a dva n ces f o r c onstruction
Investment credit (b ei ng amo rtize~ over the
pr od uctive lives of t he rela~ed pr operty)
Accumulated deferred income taxes:
Due to accelerated amortization
Due to accelerated depreciation
Other
198 2
$ 596,957 ,155
16 5,764 ,75 8
762,721,9 13
14 0 ,00 7,5 00
89,400 ,000
815,002,169
1,80 7,131,5 8 2
48,898,858
99,2 0 9,795
5,584 ,306
2 4 ,278 ,030
6 ,862 ,478
5 2,61 2 ,447
16,564,815
13,168,562
267,179,291
25,7 14 ,6 26
124,238 ,186
11,318,286
49 ,5331849
26,948,369
237,753,316
$2,312,0 64,189
1981
$ 573,77 9 ,38 4
15 1 ,541 ,3 86
725 ,32 0 , 77 0
14 0 ,00 7,5 00
89,40 0 ,00 0
738,098,36 0
1,692,826,63 0
45,5 16 ,252
89 ,0 54 ,335
4 ,895,997
2 2 ,645 ,23 7
8 ,030 ,671
4 2,335,899
16,347,764
12,133,157
240,959,312
24 ,5 22,614
111, 2 28, 3 39
10,533,742
27,943,178
17,832,7 0 6
192,060,579
$2,125,846,521
The acc oun ts of the Com pany since December 31, 1981 have not been examined by
i nd e pend e nt pu blic acc ou ntan ts.
Not to be made public unless accompanied by footnotes similar to those c ontained
in the Company's Annual Repor t fo r 1981.
The information contained Jrenin Is gi11en in response 10 your request fo' Information covering rhe company
and 1101 In connection witJr any Ja/e, offer Jo' sale, o' offer to buy any se°''ities.
EXHIBIT FF
PUBLIC SERVICE COMPANY OF COLOR.ADO
COMPARATIVE STATEMENT OF INCOME
1 Operati ng revenues:
Electric
Gas
Ot her
Operati ng expe nses:
Fuel used in generation
Gas purchased for resale
Purchased power
Ot h er op erating expenses
Maintenance
De preciation
Taxes (ot h er than income taxes)
Inc ome taxes
Ope r at i ng i n c ome
Other income and deductions :
Allowance for equity f unds used during
construction
Equity in earnings of subsidia r y companies
Interest from subsidiaries
Miscellaneous income and deduct i ons-net
Interest charges:
In t e r es t on long -term de bt
Amo rtiza t i on of de b t disc oun t
a nd exp e nse-less premi um
Ot her interest
Allowance for borrowed fimds used during
construction
Net income for period
Twel ve Mon t hs Ended Jtme 30
1982 1981
$ 7 83,92 9 ,1 0 5
555,7 6 6,874
8 ,7 0 3,2 30
$
1,34 8 ,3 9 9,2 09
186,85 0 ,738
44 7,197,7 4 6
100 ,6 00 ,495
19 4 ,557,6 13
54,729,919
72,81 0 ,35 0
56,1 01 ,7 45
84,654,1 0 5
1, 19 7 ,502, 711
150 ,896 ,498
11 ,076,2 47
4 ,537,602
3,621,227
4,342,788
174,474,362
6 4,588 ,939
623,18 7
5,649,625
(7,0 73,673 )
63,788,078
110,686,284
• $ 678 ,190,650
464,875,82 0
6,911 ,4 47
$
1,149 ,977 ,917
16 9,4 16 ,34 1
372,2 00 ,2 6 3
10 3,00 3,31 8
163,268,326
46,00 5,726
61,456,69 0
44,691 ,4 0 2
6 5 , 94 5, 4 6 5
1,0 25,98 8,0 31
123,989 ,886
16 ,769 ,479
3 ,219 ,533
980,984
6,092,055
151,051,937
59 ,139 ,088
592,7 11
3,2 0 8,5 0 1
(12,187,255 )
5 0 ,753,045
100 ,298,892
The a c co un ts of t h e Co mp any s i nce Decemb er 31, 1981 have not been examined by
i ndependent pub lic a c c oun t an ts.
Not to be made public unless accompanied by footnotes similar to those con t ained
in the Company's Annual Report for 1981 .
Tht' information contained herein Is given in response to your request for information covering the company
and not in conuc1/on with any sale, o/ft'r for sale. or offer to buy any securities.
-XHIBIT G
COLORADO-UTE ELECTRIC ~SSOCIATION, INC.
STATEMENT OF CAPITAL STRUC TURE AT JUNE 30, 1982 AND
PRO FORi.'1A, GIVING EFFECT TO ISSUANCE OF PROPOSED SECURITIES
Equity
Long Term Debt
Total Capitalization
Equity Percentages
Debt Percentages
Actual
June 30, 1982
($ 318,138)
776,802,076
$776,483,938
( .0004)
1.0004
Issuance of
Proposed
Securities
$ -o-
130,000 ,000
$130,000,000
Pro Forma
June 30, 1982
($ 318,138)
906,802,076
$906,483,938
( .00035)
··~
Department Of Energy
Western .'Vea Power Administration
P.O. Box 3402
Golden. Colorado 80401
Mr. Girts Krumins
President
Colorado-Ute Electric
Association, Inc.
P .o. Box 1149
Montrose, CO 81401
Dear Mr. Krumins:
.e
EXHIBIT H
JUL 9 1982
This is in regard to the We stern Area Power Admini stration (We stern ) and
Colorado-Ute Electric Association , Inc . (Colorado -Ute) joint development
of the multi-circuit extra-high-voltage transmission line in western
Colorado . The proposed 345-kV system would resolve the area's transmission
deficiencies to the mutual benefit of .both our organizatio ns. We are,
however , very concerned about the present status of the joint development
project . It seems to be on hold in spite of your efforts to develop a
coordinated transmission plan to meet various transmission needs in an
economical and environmentally acceptable manner .
Western's interest in eliminating dupl ica tion by jointly developing
transmission facilities, as well as our needs for enhanced transmission
in western Colorado, remains unchanged. We are par ticularly concerned
about the adverse impacts to interconnected system stability resulting from
transient outages of our existing single-circuit 230-kV Rifle-Shiprock line.
Our records show that since June 1980 the Rifle-Shiprock line has either
initiated or compounded 9 of the 22 disturbances within the Western Systems
Coordinating Council (WSCC) -exclusive of the WSCC eastern islanding
scheme (two operations). These disturbances caused loss of local load and
were reflected into other areas of WSCC , particularly Wyoming and Montana .
Utility systems in these areas have experienced extended blackouts and
received strong complaints from industrial customers .
While we strive to eliminate unreliable service at any level, uncontrolled
cascading outages are absol'utely unacceptable and indicate noncompliance
with WSCC system design criteria and its accepted performance levels . Wi t h
the strengthening of transmission in other regions , the western Colorado
transmi ssion system now is identified as the weakest segment within WSCC .
The need for its improvement is no longer a local or State issue but is now
one which has received regional and national attention through WSCC and the
Nor th Am erican Electric Reliability Council's (NERC) reportings.
EXHIBIT H
2
Western's established need for increased transmission capacity is not based
on load growth and has not diminished. Our 230-kV line loading has a direct
impact on transfer limits of adjacent systems in Utah and Wyoming. The
various established simultaneous limits are lower than nonsimultaneous
limits and tend to erode our ability to satisfy desired transfer levels. The
actual schedule capability is further reduced by adverse loop flows within wscc .
Western is fully aware of Colorado-Ute's efforts to minimize the environmental
impact by constructing a double -circuit facility; however , construction of a
single-circuit 345-kV Rifl•-Shiprock line is a viable solution to Western's
transmission needs, to some of your needs, and would restore the system to
WSCC reliability criteria. This option would still provide the opportunity
to jointly uprate the existing 230-kV line and should be given serious
consideration.
We invite your corrments on this apprnach or other alternatives leading to
timely construction of extra-high-voltage transmission facilities in western
Colorado.
-~
cc:
Mr. R. F. Walker
Sincerely,
tJ;;tC 1/. cy
Robert L. McPhai1
Administrator
President and Chief Executive Officer
Public Service Company of Colorado
550 15th Street
Denver, CO 80202
Mrs. Edythe Miller
Chairwoman
Colorado Public Utilities Commission
Room 550
1525 Shennan Street
Denver, CO 80203
P.O. B o x 640
TO:
FROM :
DATE :
SUBJECT :
GARFIELD COUNTY
COUNTY ATTORNEY'S OFFICE
G l enwood Springs, Co lorad o 8 16 0 2-0 640
MEMORANDUM
Davis Farrar, Planning
Earl G . Rhodes , County
February 22 , 1982
Department
Attorney ¢
Colorado -Ute Electric Letter dated 2/12/82
Please find a copy of a letter to Larry Velasquez dated
February 12, 1982, from Colorado-Ute Electric Association,
Inc. I would think that you would want to review this
and keep t h is in your files.
/tb
Attachments
Pho n e 945-9158
Colorado-Ute Electric Association, Inc.
Te lephone (3 03 ) 249-4 50 1
P. 0. Box 1149
Montrose , Colorado 8140 2
Larry Valasquez, Chairman
Garfield County Commissioners
P. o. Box 640
Glenwood Springs, CO 81602
Dear Chairman Valasquez:
TWX 91 0 -929-6924
February 12, 1982
Rifle-San J uan 345 kv T ransmission Line
Public Ut ili t i es Comm iss ion Decis ion No . C82-199
The Colo ra do Publi c Util i t ies Commi ss ion (PUC) ha s i ss ued
it s Deci s ion No . C82 -199, da t ed February 5, 1982, denying Colo-
r ado -Ut e 's a ppli c ation for a Cert i ficat e o f Publ i c Conv e ni e nce and
Nec ess i t y to const r uct the propo s ed Rifl e-Sa n Juan 345 kv T r an s-
mis si on Line . I am e nclosing a copy of the PUC Deci s ion fo r yo u r
in f ormation.
The PUC decision ha s unfo r tunat e ly cr ea ted a r o a dblock to
Colo r ado-Ut e 's ef fo r t s to p rovide continu e d r el i able e l e ctric
s erv ice to i ts me mb ers i n Southwest Colo ra do . Du e t o t h e nume r ou s
l ega l a n d fact u al errors cont ained in the decisi o n, Co l orad o -Ute
wil l seek rehearing of the P UC decision. Th e reasons for Colo-
rado-Ute's decision to seek rehearing are set forth in the state-
ment by Colorado-Ute President Girts Krumins, which was released
at a press conference yesterday, February 11, 1982. A copy of
Mr. Krumin's statement is enclosed.
Something must be done as soon as possible to assure that
electric service is maintained. Therefore, Colorado-Ute, after
consulting with other electric power suppliers, has restructured
the Rifle-San Juan Transmission Line so that it can be constructed
in phases. A summary sheet showing the proposed phased project is
attached to Mr. Krumin's statement.
The first step would be the construction of one 345 kv cir-
cuit, on towers designed for two circuits, from Rifle, Colorado to
San J u an, New Mexico. The second phase wo u ld be upgrading o f the
existi n g Western Area Po wer Adm inistration 23 0 kv line fro m Rifle
to Shiprock, Ne w Mexico, to 345 kv. The t h ird a n d final ph ase
woul d be t h e a ddit i on of a se cond c ircu i t o f 345 kv l i n e to th e
t ow ers con s t r uct e d in pha se on e. Th is la s t phas e would not b e
con s tructed until it is needed sometime in th e 1990 's or later .
Chairman Valasqu ez -2 -F ebruary 12, 1982
Colorado-Ute would own 50 percent of each phase of t h e proj-
ect, instead of 70 percent of one double-circuit 345 kv line, as
originally proposed. This will ultimately result in 750 megawatts
of Colorado-Ute-owned capacity, added in 250 megawatt increments,
however, instead of a one-time increase of 700 megawatts.
As indicated on the summary sheet, the Rifle-Delta portion
of phase one of the project may be routed via Grand Junction,
instead of the Hotchkiss-Paonia area, if Public Service Company of
Colorado participates in the line. The general route for the
remainder of the project will probably be the same or similar to
that originally proposed.
Colorado-Ute looks forward to working with all of the coun-
ties and federal agencies involved, so that when this badly-nee ded
pro j ect is finally approved, Colorado-Ut e can begin construction
as soon as possible. I will continue to keep you informed of the
status of the PUC review of this project.
Very truly yours,
~~:1!i~~
Right -of-Way & Land Acquisition
JRM /dcm
Enc.
cc: Identical letters have been
sent to the persons shown on
attached list.
Larry Va lasquez, Chairman
Garfield County Commis sioners
P . o. Box 640
Glenwood Springs, CO 81602
Ma xi ne Albers, Chairperson
Mesa County Corrunissioners
P. o. Box 2128
Grand Junction, CO 81502
John Haw kins, Chairman
Delta County Co mm issioners
5th & Pa·lmer
Delta, co 81416
Neil Reams, Chairman
Mont rose County Commissioners
P. o . Bo x 1 2 89
Montros e, CO 8 1 402
Fred H . Ell erd, Chairman
San MNiguel Co unty Commissioners
P . o . Bo x 548
T e lluride, CO 81435
David A . Calhoon, Chairman
Ouray County Commissioners
P. O. Bin C
Ouray, CO 81427
Ma rlyn v . Jones, Di strict Manag er
Bureau of Land Management
u . s. Department of the Interior
P. o . Box 1269
Montrose, CO 81402
David A . Jones, District Manager
Bureau of Land Management
u . s. Department of the Interior
764 Ho rizon Drive
Grand Junction, CO 81501
Paul c. Sweetland, Forest Supervisor
San Juan National Forest
u . s. Department of Agriculture
F e d era l Building
701 Camino De l Rio
Du ra ngo , CO 81301
Jimmy R . Wilkins , For es t Supervisor
Grand Mesa , Uncompahgre & Gunni so n Wayn e Twilley , Chairman
Dolo res County Commissioners
Box 58
~ National Fo rests
u. s. Department of Agriculture
P. o . Box 138 Dov e Creek, CO 81324
William C. Bauer, Chairman
Montezuma County Corrunissioners
101 w. Main
Cortez, CO 81321
Sara Duncan Chairperson
La Plata County Commissioners
Box 3220
Durango, CO 81302
Delta , CO 81416
Richard E. Woodrow, Forest Supervisor
White River National Forest
u. s. Department of Agriculture
P. o . Box 948
Glenwood Springs, CO 81602
public information
STATEMENT BY PRESI DENT GIRT S KR UMIN S February 11, 1982
Th e conunission decision, announced on January 12 and printed
about four weeks later, has created a serious obstacle in our
efforts to continue reliable electric service in southwestern
Colorado.
Nevertheless, it is the sole responsibility of Colorado -Ute
and its me!7lber systems to provide the service needed by the
cons um ers in that area . And we will do everything within our
pow er to accomplish this .
Of necessity, the first step will be to seek rehearing of
the .cormnission de cisio n , which cannot be pernitted to stand
becaus e it is replete with legal and fact u al errors of gr eat
importance.
The commission decision compl etely disregards the
recoillIT\endations of its own hearing examiner who heard the case.
Likewise, the commission ignored the recommendations of its own
professional staff . In addition, the corrunission severely
criticized Colorado -Ute's load forecasting methodology which is
prescribed for Colorado-Ute by an agency of the federal
government. In its decision, the comI:lission failed to mention ,
l et alone even consider, its own existi ng forecasts of
Colorado -Ute member system requireraents . Those f orecasts are
not substantially different from Colorado-Ute's projections.
--more--
--2--
In .our . opinion, the most serious legal error in the decision
is the conunission 's apparent view that a public . utility must
show that its own service is inadequate before it can propose to
build addition a l facilities required to maintain an adeq u ate
l evel of service in t h e territory i n which it is the sole
supplier.
Major generation and transmission projects require five to
ten years of lead time. If the comm ission's decision should
s tand as writt e n, large areas in the State of Co lo rado coul<l
have years of blackouts in ~ver-increasing numbers before the
situation could be remedied.
We do not believe that the cor:u'"lission r:ieant to say th.at it
will not permit a public utility to start construction 6f
ad ditional faci liti es unless and unt i l the existing system
becomes inadequate --in other words, when the lights go out.
For these reasons, Colorado-Ute is compelled to ask for
rehearing instead of filing a new transmission line application
at thi.s time .
But something has to be done and done quickly to keep the
lights on in southwestern Colorado . Therefore, in consultation ·
with other electric power s u ppliers, we h ave restructured the
proposed Rifle-San Juan transmission line project so that it can
be constructed in phases. We will present this proposal to the
cornmiseion for its consideration.
--3 0 --
PROPOSED PHASING OF RIFL E-SAN JUAN TRANSMISSION SY STEM
1. Co nstr u ct o n e circ u it 345 kv li ne f r o m Rif l e t o Sa n J u a n o n t ow ers
desig n ed for t wo circuits *
Colorado -Ute Electric Associatio n -50% share
Western Area Power Ad ministration -50% s hare
· 2 . Upgrade present Western Area Power Administration 230 kv line from
Rifl~ t~ Shiprock to 345 kv
Colorado -Ute Electric Association -50% share
Wester n Area Po wer Ad mi n istratio n 5 0% s hare
3. Add sec ond circ u it to ne w Rif l e-Sa n J uan lin e
Colo ra do -Ute El ect ri c Ass o ciat ion -5 0% s h a r e
Weste rn Ar ea Pow er Adm i ni st r at ion -5 0% s hare
*Ri f l e-Del ta po rti on may be ro uted via Gr and Jun cti on i f Publ ic Se rvi ce Comp any of
Colorado participates .
2-11-82
(Decision No. C82-l99)
BEFORE THE PUBLIC UT ILITIES COMMISSION
OF THE STATE OF COLORA DO
IN THE MATTER OF THE APPLICATION
OF COLORADO -UTE ELECTRIC ASSO -
CIATION, I NC ., P. 0. BOX 1149,
MONTROSE, CO LORADO , 814 01, FOR A
CERTIFICATE OF PUBL I C CONVENIENCE
ANO NECESS ITY TO CONSTRUCT,
OPERATE ANO MAINTAIN A 345 KV
TRANSMISSION LINE ANO RELATED
SUB STATION FACILITIES, TO SE
LOCATED IN NINE COUNTI ES IN
WESTERN COLO RADO , AND ONE CO UNTY
IN NE11i MEXICO, SUC H FACILITIES
COLLECTIVELY TO BE KN OWN AS THE
RIFLE -S AN JUAN 345 KV TRANSMIS -
SION LINE.
)
)
)
) APPLICATION NO . 33226
)
) COMMISSION DEC ISI ON
) GRANTING EXCEPTI ON S OF
) GUNNI SON RIVER COALITION ANO
) WRIGHTS MESA ELECTRIC CONS UM ERS
)A SSOCI ATION, ANO DENYING EXCEPTION S OF
) COLO RADO ANO NATIONAL WILDL IFE
) FEDERATION, ANO DENYING
) APPLICATION
)
)
Feb ruary 5, 1982
STATEME NT ANO FINDI NG S
SY THE COMMISSIO N:
On October 10 , 1980, Colorado-Ute Elect ri c Association, Inc ., (h erein-
after "C o lorado -Ut e"), fi l ed the instant app lication. By this applic ati on,
Colorado-Ute seeks a certificate of public con venience and necessity to
construct, operate and maintain a 345 KV transm i ss ion line in nine counties
in west ern Co lo rado, and one county in New Mexico . Herein after, such trans-
mission line may be referred to as the "Rifle-San Juan Line."
The following parties fi l ed requests to intervene in this proceeding .
Such requests were granted on the fo ll owing dates by the followi ng Comm i ssion
Oeci s ions :
!NT!:R V::NO R Qt.IT GRANT::D BY D::CIS I ON NO .
Ronald K. Dessain November 21 , 1980 C8 0-2 36
Hig !1 Co un try Ci tizens
Alliance Dece mber l, 198 0 &
Mar ch 9, 1980 C8 0-458
Wrights Mesa El ectric
Co ns ume rs Associati on Ja nuary 15, 1981 C81-113
Empire El ectric
Association January 23, 1981 C81-236
Robert T. Co lgan ,
James M. Jac kso n &
Be n D. Shaw February 4, 1981 C81-279
Western Colorado Utility
Taskforce March 26, 1981 ER81-l
Gunni so n Riv er
Coal i t ion April 2, 1981 ER81-ll
De l ta-Montrose
Electri c Asso c iation Apri 1 13, 1981 R81 -724-I
The matter was in itia lly set for heari ng in Mon trose, Colorado
on March 18 and 19, 1981, by Notice is s ued Decemb er 19, 1980. That
heari ng date was vacated and the matter was reset for May 18 t hrough 20,
1981, Montrose, Colorado. As reschedu l ed, the matter was heard on
May 18, 19, and 20, 1981 . However, the hearing not being comp l eted, t he
mat ter was set for further hearing on July 14, 1981, Montro se, Co lorado,
and continuing t hereafter t hrough t he 17th of July, 1981 if necessary.
Th e matter wa s heard on eac h of those day s and was conc luded on July l7,
. 1981.
At the commencement of hearing on May 18, 1981. a motion to
add co-intervenors was presented by the National Wildlife Federation and
the Colorado Wildlife Federation, requesting leave for such parties to
intervene . The motion was denied on the grounds that it was extremely
late, being filed after hearing had commenced, that good cause for being
l ate had not been shown, that a substantial personal interest had not
been shown, and that the petition did not show the nature and quality of
the evidence to be presented. On June 25, 1981, a letter was filed with
2
the Commission asking that t his ruling be reconsidered . A r es pon se t o
said letter wa s filed by Colorado -Ut e on July 2, 1981. Decis ion No.
R8 1-l2Dl -I was i ss ued on July 8, 1981, striking t he l etter request . The
Natio na l and Co lo rado Wildlife Federations filed a respo nse to Co lo rado -
Ute' s request to strike on July 9, 1981. At the commence ment of Heari ng
on July 14, 1981, a letter was tendered to the Exa miner f rom t he National
Wildli fe Federation and t he Co l orado Wi l dlife Federation asking that t he
forma l response fi l ed on July 9, 1981, be con s idered as a motion to set
aside the order de nying intervention status to t ho se entities. Co l orado-
Ute filed a response to the l etter mo t ion on July 21, 1981 . By Reco mm e nded
Decision No . RSl -1891, the Examiner treated the respon se filed on Ju l y 9,
19 81, as a motion to set aside in terim order, and co ncluded that s uffici ent
grounds wer e not set forth therein to modify the ru l ing denying intervention
status to t he Nation a l and Co l orado Wildli fe Federations .
Over the se ven days of heari ng , testi mony was heard from the
parties to t he proceeding and from 37 public witnesses . Num erous l etters,
cards, and petitions were received, so me in favor of t he application and
so me opposed to t he application .
Ex hibits l t hrough 72 were marked for id entif i cat ion during
t he hearing. Al l such exh ibits were ad mi tted, with th e exceptio n of
Ex hibit No . 7, which was rejected. In addition to t he number ed ex hibi ts,
lettered ex hibi ts A through J were marked for identification and admitted
into evidence. At t he conc lu s io n of the hearing, the parties were
granted un ti l August 10, 1981, to file statements of position if t hey so
des i red, and t he s ubject matter was taken under advisement by the Exa min er.
Statements of po sition were filed on behalf of Delta-Montrose
Electric Association, Co lorado-Ute, the Staff of t he Com mi ssi on ; and the
Gu~nison River Coalition and Wrights Mesa El ectr i c Co nsu me rs Association .
3
On November 13, l981, Hearings Examiner Robert E. Te mmer
iss ued Recommended Decision No. RS l-1891 (hereinafter De c ision No .
R81-1891). 8y said dec i s ion , the Exa min er r ec ommend ed t hat a cer~i ficate
of public co nv enie nce and necessi t y be granted to Co lo rad o-Ute for that
portion of t he Rifle-San J uan 345 KV transmiss i on line f rom Delta, Coiorado,
south to t he Colorado-New Mexico border. The Exa miner f ur t her reco mmended
that the Staff propo sal be imp l ement ed by Colorado-Ute for t hat portion
of the proposed transmission line extending from De l ta, Co l orado, north
to Rifle, Co l orado. The Exami ner conditioned the imp l ementation of the
Staff proposal by Colorado-Ute upon the fol l owing: "Co lorado-Ut e shall
contact t he owners of the two lines to be upgraded to secure their
cooperation, and s hal l make a comparat iv e analysis of the two a lternatives .
Said study s ha ll be fi led with this Commission within forty-f iv e day s of
the effective date of this order, and if it shows t he up graded lines and
re l ated faci li t i es to be mo re favorab l e, t hi s condit ion s ha ll be satis i f i ed.
If t he study does not s how t hat result, this matter may be set for f urther
heari ng to determine what facilit i es s hould be certificated for the area
north of De lta ."
On December 3, 1981, t he Gunni so n River Coa li t ion and Wrights
Mesa El ectric Consumers Association filed co nso lidated exceptio ns to
Decision No . RSl-1891. Also contai ned in suc h co nso li dated exceptions
are the exceptions of the Colorado and National Wildlife Federation
regarding the denial of party status. Colorado-Ute f il ed response to
the consolidated exceptions of Gunnison River Coalition and Wrights Mesa
Electric Consumers Association, and on denial of party status only of
Co l orado and National Wildlife Federation on December 14, 1981.
4
·T he Commission has reviewed the record of proceedings in this
app li cation, together with the transcripts of testi mony and ex hibits,
the various statements of position and other pleadings filed by the
parties herein . On the basis of that rev i ew, the Commission fi nds that
it should enter its awn findings of fact and conclusions of law in t he
decision herein without regard to the recommended decision of the Examiner.
FINDINGS OF FACT
THE CO MMISSION FINDS:
A. THE PARTIES
Colorado-Ut e i s a public ut ility engaged in t he transmiss i on ,
ge neration , purc hase and sa l e of e l ectric power and energy . It se ll s t he
e le c~ri c pow er and energy at wholesale, principally to its 14 member s.
Its member s are rural e lectric distribution cooperatives in the State
of Colorado .
Delta-Montrose Electric Association, Inc., and Empire Electric
Association, intervenors in this proceeding, are members of Colorado-Ute.
They receive all of t heir power from Colorado -Ute pursuant to a ll require-
ments contracts .
The Gunnison River Coalition and the Wrights Mesa Electric
Consumers Association are citizens groups. These two organizations will
hereinafter be referred to as 11 i ntervenors. 11 Any other intervening party
will be referred to by name .
5
2. COLORADO -UT E'S PROPOSAL FOR A 345 KV TRANSMISS I ON LINE AND RELATED
SUBSTA TION FAC I LIT IES
As i ndicated earl ier in t hi s de cisi on , Co l orado-Ute, on Oc~ob er 10 ,
198 0 , f il ed wi t h t hi s Commi ss ion t he in stant appl icatio n see ki ng a certi fi cate
of publ ic conv eni e nce and necessity f or t he con structi on , ope r ati on , and
mai ntenance of a do ubl e circuit 345 KV transmissio n l i ne and re l ated sub-
stati on fac ili t i es, such fac iliti es co ll ecti ve ly to be known as t he Ri f l e-
Sa n Ju a n 345 KV Tra nsmiss i on Lin e. The iine wo ul d exte nd fr om Col orado-Ute 's
Rif l e Subztatio n, near Rifle, Co lo rado, so ut h to New Mex i co, with on e circui t
ending at the Sa n J uan Ge nerat in g Stati on, and t he other circu i t endin g
at t he Shiproc k Substat i on. It i s pro po sed t hat t he do ubl e c i rc uit l i ne
would proc eed genera lly sou t h f rom Rifl e to t he Paoni a-Ho tchki ss a r ea ,
the n would proc eed wes t to the Del ta area, then would proc ee d south e rly
to the Lost Canyon Subs t ation. [!ear Corte z , then eas te rly to the proposed
Hesperus Substation near Durango, then southerly to New Mex i co, and the
termination points . The exact siting of the line would be determined in
accordance with applicable law and is not an issue in thi s proceeding, as
only the general route of the line is an issue in this proceeding. The
line will cover approximat e ly Z90 mile s. It i s propos ed by Colorado -Ut e
t hat t here woul d be s ub station s, e i t her at the ou tset or in t he f ut ure,
desig nated as t he Nor t h Fork Sub station , whi ch wo ul d be in t he Paon ia-
Hotchkiss area, t he Delta Substation, which would be near Delta and would
real l y be for f ut ure use, at Montrose, at Norwood, at Lost Canyon and
at Hesperus.
Colorado-Ute, in its application, stated that it would have an
ownership interest in the San Juan 345 KV transmission line of between 65
and 70 perce nt and t hat the Western Area Power Administration (WAPA), an
agency of the United States Department of Energy, would have an ownership
i nterest of betwee n 30 and 35 percent. Colora do-Ute stated that deta i ls
as t o t he exact own ers hip perce ntages of t he sub stati on faci li t i es and
6
. .
responsibilities f or co nstruc tio n, operation and maintenan ce of t he San
Juan line had not .been finalized as of the date of its application, but
that ownership of the terminal and s ub station faci li ties would be determined
by t he requirements and benefits to the "res pecti ve parties ."
Colorado-Ut e ha s majo r generating facilities in t he Hayden -Cra ig
area of no rthw est Co lo rado. At the present time, Co lo rado-Ute has a 138
KV G 115 KV transmi ssion system t hat ru ns from Hay den t hrough the Rifle
Substation and sout hw estern Colorado to t he New Mexico bor der. Co lo rado -
Ute, alo ng with others, also has a 230 KV transmiss ion line that runs from
the Hayden-Craig area to the Rifle Substation. This transmission l ine
was built so t hat it could be upr ated to 345 KV. This will be done.
WAPA has a 23 0 KV transmission line t ha t r un s f rom t he Hayden -Cra ig area
to its Rifle Substation and south from Rifle through Curecanti and Lo st
Ca nyon t o New Mexico. Thi s portion of the line from Hayden to Rifle is
being uprated to 345 KV.
The proposed doubl e circuit 345 KV transmission line would
roughly f ollow WAPA's 230 KV line from Rifle to the Paonia-Hotchkiss
area, then would leave that route and go wes t and then roughly follow
Colorado-Ute's 115 KV line to t he Nol"'#ood area, then would l eave t he
route of that line and go back to roughly f ollow the rou te of t he WAPA
230 KV line to Lost Canyon. It wou l d then again follow Co l orado-Ute's 115
KV line to the Hesperus area and t hen go south to the New Mexico border.
It is proposed that Colorado-Ute's existing 115 KV line will become a sub
transmission system and be transferred to Colorado-Ute's members.
Colorado-Ute has indicated that the three main purposes to be
served if the do uble circuit 345 KV line is built is to serve its member
loads in the southwestern part of the state, to strengthen the intercon-
nected transmi ssion system i n the area, and to provide a base transmission
system to tie in new ~ase load ge ne rating facilities.
7
..
·C. PU BL I C CONVENIENCE ANO NEC ESS!TY: THE LEG AL PARAMETERS:
The co ns tr:ict ion of a new facility, plant or system, such as
the proposed Rifle-San J ua n 345 KV Tra nsmi ssio n Line, i n gover ned by
CRS 1973, 40-5-101 which states:
40-5-101. New construction -extension. (1) No public
utility sha ll begin the construction of a new facility,
plant, or system or of any extension of its facil i ty,
plant, or system wi thout first havin g obtained from the
Commission a cert i ficate that the present or future public
conve nie nce and necessity require or wil l require s uch
construction . Sections 40-5-101 to 40-5-104 sha ll not
be co nstrued to req ui re any corporation to sec ur e such
certificate for an extens ion within any city and county or
city or town within which it has theretofore l awfu lly
commenced operations, or for an extension in to territory,
either within or without a city and county or city or town,
co nt iguou s to its facility, line, pl ant, or system and not
t he retofore served by a public utili ty providing t he same
co mmodi ty or service, or for an extension within or to
territory already served by it, nec essary in t he ordinary
course of i ts business. If any public utili ty, in co ns truc t ing
or extending its line , plant , or system interferes or is about
to interfere with t he operation of t he line, plant, or
system of any other pub l ic ut ility a lready constructed, the
Commission, on complaint of the public utility c laiming
to be injuriously affected, after hearing, may ma ke s uch
order prohibiting s uch construction or exte nsions or
prescribing such terms and co nditions for the location of
the lines, plants, or systems affected as to it may seem
just and reasonable .
(2) Whenever the Commission, after a hearing upon its own
motion or upon complaint, fi nd s t ha t t here is or will be a
duplication of servi ce by public uti li ties in any area, t he
Co mmi ssion s hal l , in its discretion, issue a certificate of
public convenie nce and necessity assigning specifi c territories
to one or to each of said utilities or by certificate of
pub l ic convenience and necessity to otherwise define the
conditions of rendering service and constructing extensions
within said territories and shal l , in its discretion, order
the elimination of said duplication upon such terms as are
just and reasonable, having due regard to due process of
law and to all the rights of the respective parties and to
public convenience and necessity.
Although the Public Utility Law itself does not set forth any
standards to guide the Commission in determining whether a new facility,
plant or system is required by the public convenience and necessity,
Colorado case law does provide some guidance for the Co1M1ission's
determination of when the public convenience and necessity requires the
construction of a facility, or a pl ant, or a system.
8
!n Western Color ado Powe r Co . v. Publi c Uti li ties Co mmi ss ion,
159 Co lo . 262, 411 P.2d 785 , ap pea l di smi ssed 385 U.S. 22, 87 S .. Ct.
230, 17 L.E d. 2d 21, rehearing denied 385 U.S. 984, 87 S. Ct . 500,
17 L.E d. 2d 445 (1966), the Colorado Supreme Court he l d that proof of
pub l ic convenience and nece ss ity is mandatory prior to the construction of
any new facility, plant or system; the Court also set forth some basic
princip l es of public convenience and necessity. First, section 40-5-101,
supra, is the foundation of the principle of regulated monopoly. It was
designed to prevent duplic ati on of faci lities and comp etition between
utilities. Second, any public utility service, facility or plant which
creates rather than prevents duplication is not in the public convenience
and necessity. Third, the inadequacy of existing facilities must be shown
in order for t he Commission to authorize a new service or construction of
a new faci l ity or pl ant. ~. 159 Colo. at 273-274, 411 P.Zd at 791.
!n Western Co lo rado Pow er, t he Co urt he ld t hat t he Hayde n I e l ectri c
ge nerati ng pl ant constructed by Co lo rado-Ute was not requi red by the
publi c conv eni ence and necess i ty. Th e Co urt specifi ca lly fo und from t he
record t hat adequ ate e l ectri c servi ce was ava il ab l e to serve t he needs
of Co l orado-Ute 's proposed new c ustomers; t hat the co nstructio n of
the Hayden plant, which required an investment of $30 mil l ion, was not
necessary to supply . any e l ectric requirements for the present or
foreseeable f uture ; that Colorado ratepayers should not be required
to pay for the plant through their rates; and that the Hayden plant
was an unnecessary duplication of existing e l ectric facilities which
were adeq uate to s upply the ne eds of the public. ~. 159 Colo. at
278-279, 411 P.2d at 793-804.
Under section 40-5-101, the Commission has the power and
authori ty to iss ue all or part of the requested certificate of pub li c
con venience and ne cessity ("CPCN") and to attach to a C?C N such terms
and condi:ions as in the Commission's judgement may be required by t~e
public co nvenience and necessity. See C.R.S. 1973, 40-5-103(1) ?S
9
ame nd ec by H.B. 1035; £h , Inter nati onai Uni on. United Mine Wor kers of
America v. Publ i c Uti l ities Co mmission, 170 Colo. 556, 463 P.2d 455 (1970 ).
Basically then, the question of public con venien ce and nece ssity
re volves arou nd three questions: (1) is there a need to be met, (2) is
the propo sed construction operationally feasible to meet the need, if
suc h t here be, and (3) i s t he ·constr uct i on proposa l finan c ially feasible.
D. COLORADO-UTE. ON TH E BASIS OF THE RECORD HEREIN. CANNOT BE FOUND
TO BE FINANCIALLY CAPABLE OF CONSTR UCTING THE PROPOSED RIFLE -S AN JUAN 345
KV TRANSMISSION LIN E AND PROVIDING ADEQUATE SERVICE AT REASONABL E RATES .
It i s axiomatic t hat a uti l ity seeking a certif i cate of publ i c
conv e ni e nce a nd necessity mu st s ubm it to t he reg ul atory body with
a ut hor i t y to i ss ue t he certifi cate data s how i ng t he uti li ty 's "est im ated
cost of con stru ct i on a nd ex pe nses of op e r at ion " and "h ow i t pl ans to
r a is e t he mone y neede d t o con struct its pl a nt.11 1 Thi s Commi ss ion has
f or ma li zed t hi s re qui rement in its Rul es of Pract i ce a nd Pro ce dure.
Appe ndi x H. I V. A., states:
A. App li cat i on for a Certificate of Pub l ic Con venie nce
and Necessity --Initial Issuance, Extension, Transfer or
to Exercise Franchise Rig hts .
When application . is made for authority for a certifi-
cate of publi c convenience and necessity, extension, transfer
'or to exerc i se franchise rights, the applicant in addition
to complying with the rules applicable to a ll pleadings,
particularly Rules 11 a nd 13, will s ubmi t the information
where app l icabl e and a ppropriate either in the application
or as ex hibi ts.
1. Name a nd address of applicant. If individual, state in
addition if trade name is to be used, i e., John Smith, dba
(doing bu s iness as) Farmers' Uti li ty Company;
a . If a partnership, name a nd address of co-partners
and trade name, if any;
1welch, Francis X., Cases and Text on Public Utility Regulation (1968
Rev. Ed.), at page 78. On t he s howi ngs re qu isite to a util i ty 's obtai ning
a certificate of pub l ic co nve nie nce a nd necessity, We l c h concl udes: "In
short~ it wi ll ha ve to demonstrate that it, as a utility busi ness, could
prov id e adeq uate service at a r easo na ble pr i ce ." I d. (emphasis in origi na l)
10
b. If a corporation incorporated under the laws of
the State of Colorado, a copy of its Artic l es of
I ncorporation with al 1 amendments to date certified by
the Secretary of State of the State of Colorado . If
an out-of-state corporation, a certified copy of i ts
Arti c l es of Incorporation and amend ments to date, cert i fied
by the Secretary of State of its state of incorporat ion
and attached t hereto a copy of i ts authori zation to do
bus iness in Co l orado, certified by t he Secretary of State
of Co l orado; or reference to fili ng if already on f il e
with the Pub l ic Uti liti es Co mmi ssio n.
2. Description of type of uti li ty service r end ered or to
be rend ered and a written description of the area served
or sought to be served; a map of the area so ught su itab l y
marked to conform with the written description in the
application.
3. A feasibility study showing estimated investment, income
and expe nse.
4. A copy of the proposed tariff showing the proposed
rates, ru l es and regu l ati on s.
5. Evi dence of financial ability to carry out op eration
co ntemplat ed in cert ifi cate request inc lu ding a ver i fied
recent financia l ba l ance s heet, op erating and ea rned s urplus
statement, i f any , for a 12-mo nth period end in g as of date
of balance sheet.
6. Names of public ut ili ties of like character servi ng in
or near the area so ught in the appli cation.
7. Statement that co mp etent evidence will be presented at
the hearing to show qualifications of app li ca nt to conduc t
t he uti lity operations so ught in the appli cat ion, and that
public co nvenienc e and necessity requires the granting of
the app l i cati on .
a. In appl i cation to exe rci se fra nchise rights, a l so
certifi ed co py of franchise ordinance, proof of publication ,
ad op t ion and acceptance by the comp a ny attached to t he
original ap plicati on, numb er of c ustomers served or to be
served, popul ation of city or town and, any other pertinent
information .
9. Application to transfer ex i stin g certificate of pub l ic
conven i ence and necessity may be by joi nt or separate app li ca-
tions by the transferor and transferee containing attached
copies of sales agreement or contract of sale together
with all instruments pertaining to the tra nsfer; also
statement showing accounting entries, including any pl ant
acquisition adj ustment amount proposed, on the books by
both parties before and after the proposed transfer, all
in accordance with the Un iform System of Accounts prescribed
by this Co mm ission . Evidence that the transfer is in the
public interest with an eva lu ation of be nefits and detri ments,
if any, occurring to customers of both or all parties after
transfer of certificate of public convenience and necessity
as compared to cost and kinds of services rendered prior
to transfer.
. ,
.!...i.
• i
-------------------·--·· ·-· ------
!he reason for the requirement (as set f~rth in subparagraphs
3 and S above) tha t a util~ty demonstrate the economi c feasi bil i ty of
a major new project before issuance of a cert ific ate of publi c convenience
and nec e s s ity is obvious . ihe Commission ul t imat e ly ha s t he duty to
enfo r ce dua l statut ory mand ates t hat t he uti li t y cha rg es be "j ust
and reas on ab l e " and t hat uti li t y service be "adequ ate, effic i e nt, j ust
and r eas on a bl e." CR S 1973, 40-3-101 (1 ) and (2). If t he Commis si on
fai l ed to scruti nize t he expe ns es and r eve nu es associate d with maj or
new util i ty co nstruct i on and t he fi na ncia l fitness of the uti l ity
des i ri ng to unde r take t he co nstructio n , before i ss uin g certifi cates
of publi c co nv eni en ce and necessity , a ut il ity whi ch did no t have t he
fi nancia l wherewi t ha ll coul d pl ace t he Commi ss ion in an un tenable
po s i t ion . Having ob ta in ed a ce r t ifi cate of pub lic conv eni enc e and
necessity, but unable from borrowing s or inte rn a l genera t ion to compl et e
or operate a project, a utility is likely to reques t the appropriate
regulat ory authority, in our case this Commission, to allow it through
rate increases to raise the construction and operating capital it
requires. If rate increases, necessary to raise construction and operating
capital, put pressure on the statutory requirement of "just and reasonable"
rates, CRS 1973, 40 -3-101(1), the utility could threaten project
abandonm e nt , t he reby jeopardizing "adequate and effi c ient " service
CRS 19 73, 40-3-101 (Z), if t he Commi ss ion declined t o aut ho r i ze the
ra i ses necessary t o s usta i n co nstruction, operating, and capita l costs
i n co nn ect i on with a new project. In order t o avoi d the un tenab l e
situation of havi ng to choose between higher rates, which may not be
I
just and reasonable, and project abandonment, it is necessary in the
first i nstance for a utility to show that a particu l ar pro j ect is
feasible and that it has the financia l ability to carry out the project
for which a certificate of public convenience and necessity is sought.
In short, t he uti l ity is required to present co mpetent evidence upon
l2
which t he Commission can make a proper finding that t he proposed
project is economically feasible. International Union, United Min e
Worker s of America v. Public Utili ties Commi ss ion, 17 0 Colo . 55 6 ,
561; 463 P.2d 465 (197 0).
In its Statement of Position, the Gunnison Ri ver Coa l ition
states (on page 6) that it specifically requested copies of Co l orado -
Ute' s Appendix H. IV. A(3) feasibility studies in its Consolidated
Interrogatories and Request for Production which it fi l ed on Apri l 8,
1981. According to the Gunnison River Coalition, Colorado -Ute answered
in its responses served April 23, 1981:
"Co l o.rado·Ute furnis hes herewit h a copy of
1975 Loa n Su pport Study, and has previo us l y
f urnis hed to a l l parti es of record on Ap r il 16,
19 81, a co py of t he 19 78 Loan Suppo rt Study,
whi ch do c um ents Colo rado -Ut e be li eves sat i sfy
pa r agr aph (iv) (A) (3) o f App end ix H o f t he
Commis s ion's Rul es of Pr act ic e and Pr oce dure."
Ne i t her t he 1975 no r 1978 lo an support stud i es we r e made a part of t he
application or offered as exhibits by Colorado -Ute in t his proc eeding .
Colorado -Ute did at tach an unverified bal anc e s heet and s tatement of
ope rations to t he application he r e in . (Ex hibi t 0 and E to t he appli cat ion,
res pect ive ly bot h dated Augu st 21, 198 1 ). How ever, we f ind t hat t hese
two fi nancia l statements were neither current nor reflective of Co l orado-
Ute 's prese nt and reaso nab l y foreseeab l e f ut ure financia l co ndition .
The only financial witness presented by Colorado-Ute in
this docket was Robert Vold, Colorado-Ute 's vice president for finance
and accounting. Mr. Vo l d sponsored no exhibits. His prepared testimony,
exhibit 0, was 5~ pages long, l~ pages of which described his education,
experience and corp orate duties. At the conclusion of his few pages of
prepared direct testi mony, Mr . Vold concluded that Colorado-Ute had
13
... successfully ar~angec financi ng for much larger
projects and expect[ed] no particular difficulty
in comp l eting th i s project .
Exhibit 0, p. 6. Such i nformation as Mr . Vol d was able to provide
co ncerning t he estimated cos ts of t he proposed power line came fro m
Colorad o-Ute's manager of power sy stems and eco nomi c planning, Raymond
Ke i t h. Mr . Keith sponsor ed exhibit 14 which i s a breakdown of est imated
project costs a nd a divison of those costs between Colorado-Ute and
WAPA. Mr . Keith devoted 7 lines of discussion in his 27 pages of
prepared direct test imony to t he sub j ect of t he project's costs, and
non e of th i s discussion de a l t with revenue/expense ana ly sis. Ex hibi t
B, p. 25.
Mr . Vold confirmed on cross-examination t hat Colorado-Ute
had experienced negative operating margins of slightly l ess than $7
mi l lion2 for the 12 months ending December 31, 198 0, and negative
operati ng margins of slightly more than $71J mil l ion 3 for the lZ months
endi ng March 31, 1981. ~e a l so confi med t hat operati ng margins were
negati ve for t he l2 mo nths endi ng J un e 30, 1981, a l t hough he was un ab l e
to supp l y the precise do ll ar amou nt. Consistent with these negative margins,
Mr . Vo1d admitted, was a times interest earned ratio (TIER) of less than
1.0 for t he same accounting period s. Mr . Vold acknowledged that Co lorado-
Ut e' s precarious fina ncia l condition si nce ear ly 1980 pe rsisted in spi te
of the Commission 's a ll owance of very large rate increases to Colorado-
Ute in ear l y 1980 and in early 1981 --25% in the former year and 2ir,.; in
the latter.4 These increases, it is to be noted, were only the most
2see also Colorado-Ute's 1980 Form 1 filed with the Commission at schedule
page number 114.
3 see a l so exhibit I to Colorado-Ute 's securities application filed
April 27, 1981, and docketed with the Commission as Application No .
33775-Securities .
4 See Tr., vol. III, p. 42
14
recent in a number of increases Colorado -Ute has obta ined since 1975 .
These increases took effect at an ann ual rate of 16.6% on a compound
basis for 1975-198 05 and ranged fro m 12.6% per year to 28.9% per yea r
over t he period6 . Mr. Ke i th admi tted t hat for 1981 the rate of increase
in Colorado -Ute 's whol esa l e rates to its member s would be of a comparab l e
magnitude (in excess of 15%).7
Against this record of f in ancial dec line acco mpani ed by
rapidly in creasing rates, Mr . Vo ld on cross-exami nation discussed
Co l orado-Ute 's $1.5 bil l ion fi ve year (1981-1985 ) cap i tal requirements 8 ,
requ i rements that themselves are more than three ti mes as l arge as
Colorado-Ute's tota l book assets of $516 mi lli on at the end of 1980 .9
These capita l requirements would be met predominantly through debt bor-
rowings, stated Mr . Vold which wou ld require Colorado -Ut e to incur
ever increasing amounts of interest ex pen se 10 ; with margin s in creas in g
at a s lower rate than interest expense, or margin s actually continuing
to be negative . Increasing interest expense, Mr. Vold co nceded, cou ld
5see ex hibi t 62.
6see exibit 33 and Tr ., vol. III, p. 41.
7seeTr., vol . III, p. 42.
3see exh ibi t 36.
9see Co l orado -Ute 's 1980 Form l f il ed with the Co mmi ssion at sc hed ul e
page number 110.
10 some of th i s expense in 1981, Vol d agreed, could be traced to interest
on borrowings for co nstruction of Cra ig 3 ($125 million borrowed in 1981);
co nstruction of a Sl3 million headauarters co ntrol center ($2 million
to be borrowed in 1981 ); construct ion of variou s pr ojects in preliminary
stages, inc lud ing the power line proposed here and the proposed iri -
Co un ty Reservoir (up to S2 0 mill ion to be borrow ed in 1981 aga in st SSO
mi llio n autho rized); and co nstruction of Co lo rado-Ute's 20% share of
the Hayden-Bl ue Riv er transmi ssio n l in e (u nk nown 1981 borrowings).
15
ha ve a se vere i mpact on TIER. Acknow l edging t hat Colorado-Ute's TIE:R ,,
has been l ess than 1.10--i n recent per i o~s. Mr . Veld agreed that Colorado-
Ute's mortgage or i ndenture agree ment with Its principal lenders of past
years --the Rural Electrification Association (REA) and t he Cooperati ve
Fin a nce Corporatio n (CFC) --r equired Colorado-Ute to maintain a TIER
abo ve 1.0 in order to be co nsidered e ligibl e for credit .
Perhaps to al l eviate its eroding margins and falling TIER,
Co lo rado-Ute anticipates requesting rate re li ef in 19 82, 1983 and
1984. Mr . Vold did not specu l ate on the size of t he in creases that
Co lorado -Ute would seek in those years; nor did he venture an opinion .
about the further rate relief Colorado-Ute would require beyond 1984.
However , Staff witness Bruce Mitche l l, an engineering analyst, on cross-
examination, dicussed his Exhibit 46 which indicates that the proposed
345 KV line alone wou l d precipitate revenue deficiencies for Colorado-
Ute in excess of $20 million a year in its ear l y years of operations.
Mr. Mitche l l considers it high l y probab l e that Colorado-Ute wi11 seek
rate relief on a freq uent basis after 1984 even i f t here is rate re l ief
in 1982, 1983 and 1984.
Exhibit 14 sets forth a total construction cost for the proposed
project of $243 mi 11 ion; these are said to be 11 es ca 1 ated" 1983 do i 1 ars . 12
Colorado-Ute 's share of the $243 million is shown on Exhibit 14 to be
11of co~rse a TIER of 1.0 i s less than what Co l orado-Ute intends to
achieve through rate increases . In its last rate case, Colorado-Ute 's
then executive vice president stated that a TIER of l. 92 was "t he m1 n1 mum
needed in view of future financing requirements." I&S Docket No. 1474,
Girts Krumin's pre-filed pages 15-16 .
12 Exhibit B, p. 26.
16
$168 million. On cross-examination Mr . Vold agreed that Colorado-Ute's
$168 million s hare should actually be s hown t o be $2 0-$25 million high er
to account for interest during construction.13 This wou l d push the entire
project cost as high as $193 million . In response to questioning, Mr.
Vold agreed that the cost of this project for Co l orado-Ute --whether
esti mated at $168 million or at $193 millior. --in fact qualifies the
proposed 345 KV line as the most expensive single project Colorado-Ute
has to date undertaken.14 Mr. Vold testified that sources of capital
Colorado-Ute had drawn on in the past for long -term financing --equity,
pollution control bonds, and loans insured by the REA --would be unavail -
ab l e for the proposed power line project. For all but 10%15 of its .
$188-$193 million s hare of the capital costs of the project, Mr. Vold
stated that Colorado-Ute would have to seek a l oan guarantee from REA 16
and actual loan proceeds from some other l ending so urce. Such a source
for Co l orado-Ute in t he past has been the Fe deral Financing Bank, but
Mr. Vold expressed doubt (Exhibit 0, page 6) that this in stitution co uld
conti nu e to s upply f und s und er t he loan guarantee program. Mr . Vol d
could name no ot her potential l end ers t hat might make capita l avai labl e
to Colorado-Ute und er an REA guarantee.
13 Presumably the S20·$25 million is based on a range of assumed interest
rates of 12% (12% X $168 mi lli on= $2 0.l mil l ion) to 15% (15% x $168 mi l lion=
S25.2 million)
14 cross-examination revealed that the book value of a large Colorado-Ute
transmission line like that from Craig to Rifle was under Sl5 million;
that the bo.ok values of Craig land 2 were Sll6 million and $102.5 million,
respectively; and that as of year end 1980 Colorado-Ute had spent only
S39.5 million construction work in progress (CWIP) on Craig 3. It is also
worth noting that the capital costs on the proposed power line will have to
be raised, and will be expended faster than Colorado-Ute heretofore
has experienced on a major project . This is because of the project's
tight two year timetable for material acquisition and construction (see
exhibit 30, page 13).
15 Mr. Vold testified that 10% of Colorado-Ute's share of the power line,
when operational, would be devoted to the benefit of non-REA Act beneficiaries
and thus 10% of project costs •11ould be ine l igible fo:-the REA guarantee .
Exhibit 0, page 5,. The non-REA Act 10% Colorado-Ute wouid seek to obtain
from CFC. !d .
16when it submitted its application, Colorado-Ute stated fina ncing might
in part co me frcm ~EA-insured loans (App. No . 332.26, p. 5, para. 6).
Mr. Vold contradicted this :lai m.
17
, .
As indica ~eo above, Colorado-Ute, in its appiication, stated
it would have an ownership interest in t he Sa n Juan 345 KV transm iss ion
line of between 65 and 70 percent, and :hat WAPA would ha ve an ow nership
interest of between 30 and 35 percent. The exact parameters of WAPA's
participation in the proposed line did no t become c le ar throughout the
course of these proceedings, and this lack of clarity stands out as one
of the critical deficiencies in Colorado-Ute's proof of financial feasiblity.
Colorado-Ute witness Vold cla imed not to know whether Congress had even
deliberated let a lon e approved, appropriat ion s for WAPA's contrib ution
of 30 to 35 percent of the total project costs. WAPA ha s no t entered
into a firm agreement to participate in the project, even t hough Colorado -
Ute and WAPA were supposed to have executed a "definitive" contract
before January, 1981. 17 Colorado-Ute 's· 1 ate president, Mr. Bugas,
stated that Colorado-Ute itself would try to fund the entire project
cost even if WAPA doesn't contr ibu te. 18
17 Exhibit 6, page 5, paragraph ll. No explanation has been offered by
Colorado-Ute for its failure to come to terms with WAPA . As late as
April 22, 1981, Mr. Bugas expected to have the agreement signed before
May 21. See Ex. A, p. 2.2 .
18Tr ., vol. II, p. 58 . Color!do-Ute, however, has offered no showing
that it could do so and remain in compliance with the REA loan guidelines
for non-Act projects. Those guidelines are set forth in exhibit 49 at
page 13.
18
Mr . Vold's professed ignora nc e of WAPA's ability, readines s
and willingness to co ntribute fi nanc i al ly to t he project i s part i cu l ar ly
disturbing in light of t he impact of WAPA 's participation on capital
requirements for the project. As Colorado-Ute 's witness Mr. Keith (Exhibit
B, page 22) and the then executive vice president Krumins (Exhibit 30, page 1)
have p1ain1y stated, Co1orado-Ute's needs for transmission capacity (even
as Co lo rado-Ut e sees them) cou ld adequately be met by a single-circuit
345 KV line; WAPA's participation is the sole and exclusive reason for
the proposal that the l ine be double circuit. Colorado-Ute's own Exhibit
12 shows that the cost per mile of a double-circuit 345 KV line is 80% higher
than the cost per mile of a single-circuit 345 KV line ($500,000/mile vs.
$275,000/ mile). Thus, WAPA's possible participation presumab l y has
increased the project's capita l requirements abo ut 80%. If Co l orado-Ute
were to proceed with the double-circuit line and WAPA i s not ready, willing
and ab l e to participate f in ancia lly , Co lorado-Ute a lon e would bear the
burden of this 80% inflation of project costs. Yet, curiously, Colorado·
Ut e 's se nior fi na nci a l off icer apparently did no t perceive a need to
make eve n i nform a l inv estigati on s of WAPA's ab ili ty to contribute capita l .
Based upon Colorado-Ute 's fai lu re to present credibl e information
with respect to the financial viability of the project, we find t hat
Colorado-Ute , based upon the record, does not have the ability to finance,
construct, or operate a project as costly and large as the proposed 345 KV
double-circuit line while still providing ad.equate service at reasonab l e
price levels . If the Commission were to authorize the proposed line herein,
it is very likely that Colorado-Ute 's members would be burdened with an
annual regimen of major rate increases for years to come. We do not
find that Colorado-Ute can make this project pay its own way, nor do we
find that Co l orado-Ute can absorb further fixed and variable costs on
a major project of this magnitude without negative margins or an unaccept -
:ible TIER .
19
E. COLORADO-UTE HA S NOT PRO VED A CO MP ELLI NG NEED =cR THE 0 ROPOS EC LI NE
I N ORDER TO SERVE ITS SO UTHWE ST MEMBERS .
·In the law of publi c convenience and necessity , "n ecessity "
raises two questions. One is whether new or additional service is required .
The other question, ass uming t he answer to the first is positive, i s
whether t he particul ar system or fac ility proposed by t he appli ca nt utility
i s appropriate to t he need. The distinction between t he two inquiries
was aptly set out by t he co urt in Kentucky Utility Co. v. ~Service
Commi ss ion , 252 SW. 2d 855 (Ky . 1952).19 For a regu l atory body to grant
a certificate of publi c convenience and necess ity , the court t here stated,
the body mu st fi rst find a "n eed for a new service system or facility";
then, the co ur t co nti nu ed, t he body mu st find "an abse nce of wasteful
dup li catio n result ing from construction of the new system or facil i ty."
252 SW 2d at 890. The Kentucky co urt defined dup l ication in th i s co ntext
as:
" .. an excess iv e investment in re l ation
to productivity or efficiency, and an
unnecessary multip li city of properties."
Id. ~We stern Colorado~ £2. v. ~U tilities Commission, 159
Colo. 262, 304 , 411 P.2d 785 (1966) (holding that Colorado 's l aw on
publi c convenienc e and nece ss ity requires "that duplicati ng facilities
req uiring enormou s inv estme nts shou l d no t be suppor ted by t he consuming
pub l ic if they are unnecessary ."]
19 rn the case , the court overturned a commission decision approving a
cooperative's proposal to construct 597 miles of new transmission line .
Al though t he court agreed wi th the com mission that additional transmission
service was needed, it determined the commission had not considered the
a l ternative of having uti li ties other than the cooperative expand the i r
existing system to make it "adequate to serve all consumers at a cost much
lower than the cost of two separne sets of lines." 252 SW 2d at 892 .
20
Colorado-Ute he re has proposed a double-circuit 345 KV transmis sio n
line with a nominal capacity of 1000 MW , 70% of which or 700 MW, i s to be
owned by . Co 1 orado -Ute. 20 The 1 i ne wi 11 run from Rifle, Co 1 or ado to Sa n
Juan, New Mexico. The new line will not replace, but will be in add i ti on
to an ex i sti ng WAPA 230 KV line and an existi ng Co l orado-Ute 115 KV line
also running from Rifle to t he San Juan-Shiprock, New Mexico area. WAPA
is plann i ng to uprate the 230 KV Rif1e-Shiprock line to 345 Kv.21 Thu s,
the Co lo rado-Ute-WAPA project proposed here cannot be viewed narrowly as
the replacement of whatever existing transmission capacity there is in
western Colorado by a new 1000 MW system. The proposed new 1000 MW system
must be seen as an addition to existing capacity that wil l make available
in two to three years, nominal carrying capabi li ty of from 1,273 MW to l,623
MW in western Colorado as fo llow s:
20 This assumes WAPA participates in the project and becomes entitled to 30%
of the capacity . If WAPA cannot or will not participate, Colorado-Ute would
own all 1000 MW of capacity.
21 Exhibit 6, p. 4, para. 7; exhibit 16, p. 30; exhibit 28, p. 8; ir ., vol.
II, p. 118. According to the cited reference in exhibit 6, Colorado-Ute
is to be offered an opportunity to participate in the uorating and ownership
of an uprated 345 KV WAPA 1 i ne from ~ifl e to Shi prock.
21
Nominal Maximum Nominal Minimum Ref ere n:e
(MW) ( M\o/)
Colorado-Ute SW 73 73 Ex. 4-, Ex .25 ,
Colorado gener at ion last page "
Co 1 oradc-Ute 115 50 Ex. 4
KV 1 i ne
WAPA Rifie-Shiprock
1 i ne
at 23 0 KV 200 Ex . 12
at 345 KV 50 0 Ex. 12
Rifle-San
Juan-Line 1,000 l,000 Ex.12
1,623 MYl2 2 l,273·M'W22
Colora do -Ute in t he co ur se of t hese pro ceedi ng s has brought forth
num e rou s formulations of "ne ed" for its propos ed 345 KV double -circuit line.
Responsible aop lication of t he publi c convenience and ne cess ity doc t rine
requires c los e exa mination of t hose formu l ations . It i s necessary to determine,
first, whether there is a need at al l for improved transmis sio n ca pacity in
Colorado -Ute 's western Co l orado territory; and, then, to determine whether
Colorado-Ute 's proposed system addition is appropriate, gi ven t he reg ul atory
duty to avoid "an excessive investment in relation to productivity or efficiency
and an unnecessary multiplicity of properties." Kentucky Utility Co . v.
~ Service Co mmi ss ion , ~. 252 SW 2d at 890. We s hall address each
22 Mini mum case assumes existing Colorado-Ute 115 KV line wou l d be withdrawn
from transmission service in southwestern Co l orado and that WAPA reversed
'pl ans to up rata the 230 KV l ine to 345 KV. Additional capacity fro m series
compensation is not considered here. Al so, the capacities here are understated
since the fact of existing interconnection of the WAPA 230 KV and the
Colorado-Ute 115 KV lines gives the system greater than nominal capacity.
Tr ., vol. II, p. 22.
23 Thro ugh 1989, t he so uthwest Colorado l oca l generation capab ili ty is s hown
on the l ast two pages of ex hibi t 5 as: Bullock 1 & 2 (12 MW): Taco ma-Am es
(11 MW); Nu cla 1, 2, 3 (36 MW); Col l bran (13.5 MW). Colorado -Ute wi tnesses
parenthetically have c l ai med t hat combined fixed and var i ab l e costs of the
Nu c l a and Bul l ock plants are so high t hat t he plants ca nn ot ec onomi ca ll y
be oper ated beyond 198 9. See e.g., ex. B, p. 6. Ac t ually, t he 1980 combined
fixed and variable power cOS'ts of Cra ig 1 wer e 35.84 mill s /kwh and for Nucla
were 31. 72 mills/kwh . Colorado-Ute Form 12 Operating Report (1980), schedu l e
12 ( d).
22
of Colorado-Ut e 's stated needs for t he proposed line in terms of those needs
merits and in terms of whether investment in a 345 KV do ubl e-circ ui t line is
a cost-effecti ve way of address ing t he needs. The various "needs" t ha t hav e
been me ntioned by Colorado-Ute and/or i ts two member s who interve ned in s uppor t
of the instant appl i cation may be grouped as fo ll ows:
Needs Re lated to Co lorado-Ute's
Southwes t Tra nsmi ssion System
-Reducing line lo sses
-Improving voltage levels
and vo l tage stab ili ty
-Improving reliability
-Me eti ng t he demand growth of
So uthwe st Co lorado memb ers in
t he l980's
Ne eds "Secon dary"24 to Improving
Southwest Co l orado Transmission Svs tem
-P roviding base transmission system
for p1anned doubli ng or trip ling of
generation capac i ty in the l98 0 's
-I ncreasing the nor th-to-south transfer
capabi li ty of t he Co lo rado-New Mexico
transm i ssion system interconnection
24 11 Secondary 11 is Colorado-Ute 's own description . Ex . A, p. 15; ex 8, p. 10.
23
The Southwest Colorado Transmission Svstem
Colorado-Ute has six members in southwestern Col or ado .25 According
to Colorado-Ute's late president, Mr . Bugas, meeting the needs of those
members "i s what t hi s case i s all ab ou t .•26 The principal prob lem with
meeting. those needs is the diff i cu l ty of being able to transmit e l ectricity a
distance of so me 100-200 mil es fro m t he Cra ig -Hayden co mpl ex in t he north to
where the so uthwest Colorado memb ers take power in the south. The problem
arose because so me years ago Co l orado-Ute made a corporate decision to l ocate
i ts major generation add i tion for t he mi d-198 0's in the north eve n t hough it
knew that the so ut hw estern load center would be its "critical" growth area . 27
The existing nor t h-to-s outh transmission path avai l ab l e to Co lo rado-
Ute consists of its own 115 KV Rifle-New Mexico l ine and t he 23 0 KV Rifle-
New Mexico line of WAPA. Although accord ing to exhibit 12 the nominal capacity
of t hes e line s would be 50 MW and 200 MW, respectively, for a combi ned capacity
of 250 MW, t he fact that they are interc onnected at various points (s ee map
in ex hibit 2) means that operated in parallel they have co nsiderably greater
capacity.28
25 They are: De~t a-Montro se, Empire, Grand Va ll ey, Gunnison County, La Plata
and San Miguel . See exhibit 8 and map in exhibit l.
26 Tr ., vol . I, p. 198. Mr . Keith agreed. Tr ., Vol . II, P. 197.
27 co l orado-Ute explicitly recognized as early as 1975 (in its 1975 Loan
Support Study) that the southwest load center would require either additional
transmission or additional generation capacity in the early-to mid-eighties
because of its projected exceptional growth. Tr., vol II, p. 194, p. 196 .
It conducted the planning process for location of the unit that would
follow Craig l and 2 in the 1-2 years following 1975. Tr., vol . II, p. 194.
In that pl anning process Colorado -Ute management expressly considered and
expressly rejected building the next unit in the southwest . Tr ., vol II,
p. 195. Colorado-Ute elected to locate its next unit in the north where
Cra ig 3 is under construction today .
28 Tr, vol. II, p. 22. The interconnection is pursuant to contract for the
mutual benefit of Colorado-Ut e and WAPA. Exhibit A, p. 14.
24
In recent years, Co l orado -Ute has been able to rely on 'NAPA' s
parallel 230 KV system in the southwest to meet member loads at peak when
Colorado -Ute's own 115 KV line and Colorado -Ut e 's lo cal southwest generation
capacity --som e 73 MW 29 --prove in ade qu ate. At peak in 1980, Co lorado-Ute
used 50 MW of capacity on WAPA's paral l el line . 30 WAPA's parallel l ine will
be ava ilabl e to Co lo rado-Ute for back-up at pe ak in t he so uthw est until
at l east 1983. 31
29 see ex hi bit 4; exhibit B, p. 6.
30 ir., vol. II, p. 22 .
31 Id. WAPA has never indicated to Co l orado-Ute t hat its 230 KV line
co uld no t be avail able beyond 198 3. ir., vol II, p. 25.
25
1. ~ine Losses
Ther e i s no evid e nce in t he record that l osses of po wer and
energy on WAPA's 230 KV line are s ignifi cant . There is evi dence, however,
t hat transm i ss ion lo sses on Colorado-Ute's 115 KV line are excessi ve , perhaps
in the ra ng e of 8%32 a l t hough Colorado-Ut e has pro vided no systemati c
demonstration of line loss l eve l s. Colorado-Ute's l ate pres id ent, Mr . Bugas,
agreed t hat l ine lo sses in so uthw est Co lorado --whatever t heir l eve l --have
been red uced as a res ul t of a new WAPA -C olorado -Ute transmiss ion system
in tercon nection at Lost Canyon and can be somew hat mitigated by operation
of the Nucla statio n. 33 Nevertheless, it could well be that lo sses will
rema in excessive on . t he 115 KV l i ne without some correcti ve action.
32 see testi mony of De l ta-Mo ntro se witness Potter, Exhibit E, p. 16.
33 Tr., vol . II, pp . 18-19. Empire 's Mr . Johnson testified the Lost Canyon
interco nn ection was in service as of July 15, 1981.
26
2. Volt age Le vels And Voltaae Stab il ity
Again, there i s no evidence of problems on WAPA 's 230 KV line
with vol tage l eve l s or voltage stab ili ty. Ag a in , Colorado-Ute has offered
no qu antifi cation of the magnitud e of any voltage problem s on its 115 KV
line, a lthough its witnesses a llude to s uch problems in t heir narrativ es .
Mr. Johnson of Empir e described voltage regulation problems experie nced
~ . ~ on Empir e 's system in t he last year . Both he and the late Mr . Bugas
agreed these voltage prob l ems have been directly addressed and solved
by t he new Lost Canyon WAPA -Co lorado-Ut e interconnection. Mr . Potter
said that Delta-Montrose had voltage problems at ·t he Montrose substation.
To t he extent s hun t capacitors ca nnot a ll eviate De l ta-Montro se 's probl ems,
so me corrective action may be necessary .
34 Exhibit F, p. 3 ff.
35 Tr ., vol . II, p. 18 .
27
3. Transm~ssion Svstem Rel iab ilitv
The l ate Mr . Bugas denied that t here was a reliabil~ty problem on
e i ther Co l orado-Ut e's or WAPA 's southwest transmi ssion system . 36 The Staff
made inquiries about sustai ned forced outage rate s on t he line over t he three
years, 1978-198 0 ; t he inquiries re vea l ed t hat in 19 80 , t he only year in
which t he rate was unusu al ly high , the ca use was vandalism , and t here was no
"techni cal deficiency.1137 To t he extent re li abili ty has been an iss ue in
t hi s case with respect to Co lorado-Ut e 's so ut hwe st system, it has been in the
co ntext of what Mr. Keith ca lled t he "sacrifi ce of re l iability" ass ociated
with Co 1 orado-Ute' s proposed new daub 1 e-c i rcuit 1 i ne, i .e. , an "occurrence or
disaster t ha t wou l d ca use on e t ow er t o go down would ca us e us to lo se both
circu its.11 38
3611 .. (W]ithin the lim its of operation of the system I think it is very
re li able ." Tr ., vol. II, p. 15
37 Tr ., vol. III, p. 78.
38rr ., vol. III, p. 54.
28
4. Me mber De mand s I n The 198 0's
I n truth and in fact, Colorado-Ute 's case for the nee d for
additiona l transmi ss ion capac ity in t he servic e areas of i ts so uthw estern
Colorado member s r ests on its projections of memb er load growth t hrough
the 1980's. Tho se projections are a matter of wide di sagreement in t hi s
record, for Co lorado-Ut e 's projections si gnificantly exceed t ho se of t he
two other witnesses in the case who prepared projections. The difference
in the projections is illustrated below .
So uthw est Col orado Memb er Load Projections
Staff Memb er Coalition Witness
Co l orado -Ute 39 Mitche11 40 Or. Shah 41
1980 (act ual) 17 0 .2 MW
1984 (projected) 338.lMW 275-314 MW 227 . 9-277 . 9
1989 (projected) 508 .0 MW 47.2 MW 291 -412 .5 MW
Co l orado-Ute prepared its projections of member l oads by co ndu cti ng
a "power requ i re ment study ." Ex hibit 9, t he 1980 Power Req ui rement Study
Report, was spo nsored by Mr. Ke i th to i llu strate t he methodo l ogy and result
of Co l orado -Ute 's projections. Preparation of Colorado-Ute 's power require-
ment s study, Mr . Keith admitted, fol l owed a set of procedures outlined by
REA in t he latter 's Bulletin lZ0-1 .42 Th e procedures began with the prepar-
39
Ex hibit 8.
a.a · Ex. G, p. 9 and ex. 44. Mr. Mitchel l projected no range for t he year 1989.
41 Ex. J. pp. 36-38. Or . Shah 's ranges are wi th (high) and without (low)
t he fo llowing new industria l loads: AMAX, She ll -Mobi l, Homestak e and
C-b Tract. Ex. J, p. 10.
42 Tr, •1 01. II, p. 200. Bulleti n 120-l appears in t he rec:Jrd as ex hi bit 32.
29
MW
ation by Colorado-Ute of what Mr. Keith agreed was a "fair ly mechanical 11 43
set of ieast squares projections of the power requirements of each member 's
residential and small commer cia l customers based on tre nding of histori ca l
data from t he 197 0s. Co lo rado-Ute t hen t urned its least sq ua res project ion s
ov er to the memb ers, who may have modifi ed t ho se projections and who, in
addition , esti ma ted t he future lo ads of t he i r own large co mm ercia l and
industrial c ustomers.44 I n addition, accordtng to Mr . Keith, in t he co urs e
of the power requirement study Colorado-Ute and its membe rs:
... co ntacted large co mm ercia l s co ncernin g
t he ir long -rang e pow er and energy requirements .
co nduc ted surveys in the r es idential c l ass ... ;
perform ed studies on the · effects of price
elasticity on e l ectrica l use; and ana lyzed and
included the effec ts of co nservation.
Exhibit 9, pp 2-3. A brie f anaysis of Mr . Keith's statemen t fo llow s.
a. Contacts Of Large Commercials
A major contributor to increased power demand s in 1984 and 1989
in Colorado-Ute's projections is the addition of new large industrial or
commercial customers. Nineteen of the largest of these potential new
customers are shown on exhibit 13 to exhibit 9; they a lon e account for the
addition of 294.5 MW of demand on the system (in Colorado-Ute's projecti ons)
in 1989 that did not ex i st in 1979. Mr. Keith testi fied t hat he ta lked with
six of t hese nineteen customers, a lthough he was unable to find any notes
or memoranda concerning his contacts.45 Under REA guide l ines
43 Tr., vol. II, p. 204.
44 Tr., vol. II, p. 205.
45 Tr ., vol. II I p. 6.
30
f or t he pre pa rat ion of pow e r r equiremen ts studi es, Mr. Ke i t h ad mi tted , t he
·lo ads of l arge i ndu s t r i a l/co mm erc i a l cus tome rs s uch as t hese are no t
s upposed to be i nc lu ded i n power projecti on s unl ess t hose l oads are a l ready
"known or contracted.1146 Nevertheless, Mr. Keith was unable to identify
one customer of the nineteen large "potentials " in exhibit 13 to exhibit 9
that was~ contract for power either in 1984 or 1989.47 The late Mr.
Bugas was able to say that one of those customers, AMAX-Mt. Emmons (35 MW
in 1989), definitely was !22! under contract;48 Mr . Johnson of Empire Electric
noted that another, Shell -Mobil (60 MW in 1989) still was not under contract;
pub l ic 1o1itness David Sumner related that another, Homestake Mine (6 MW in
1989) ,-had i ndefi ni te l y postponed its project; 49 and Mr . Keith admitted
that still another, C-b tract, while schedu l ed by Colorado-Ute to demand
100 MW in 1989, actua ll y was itself consider ing not on l y the ge neratio n
of its own power but a l so se lling back to Co l orado-Ute up to 80 MW 50 .
Th ere is no hard evi dence in t he rec ord , to say nothi ng of even suc h
soft evi dence as no tes of hearsay co nversation s, by which the projected
lo ad of!!!:£ po tentia l Colo rado -Ute memb er l arge custome r can be scrut ini ze d
f or acc ur acy and re li ability.
46 Tr ., vol II , p. 208; exhibit 32 , p. 4; Tr., vol. III, p. 4 .
47 Tr ., vol . III, p. 6.
48 Tr., vol. II, p. 115.
49 Tr ., vol I, p. 79.
50 rr ., vol. III, p. 9.
31
b. Conduct Of Survevs !n The Residential Class
Exhibit 9 to the contrary notwithstanding, Mr. Keith admitted on
cross-examination that neither Colorado-Ute nor any Colorado-Ute memb er
had done anythin g like an eng ineering end-use survey or appliance saturation
study because it was "im possible for t hem to de so-.11 51 In an attemp t
to support Mr. Keith, Delta-Montrose bro ugh t on Mr . Potter to declare that
his utility had done a s ub stitute for a real saturation study because a
real one, eve n though REA recom mend ed it, "wou l d not be appropr i ate ...
in a wi nter peaki ng system such as Delta -Montrose's.u 52 Mr . Potter then
had to be reminded that he had said no thing about the "inappropriateness"
of an e nginee ring end -use forecast f or Delta-Montrose when he had s ubmi tted
the latte r's own actua l power requirement study to REA . At t hat ti me he
had said no thi ng about winter peaks; he had simply ad mi tted Delta-Montrose
neither had t he ti me nor the mon ey to do a real app li anc e saturation survey . 53
Neith er Colorado-Ute nor its two memb er-s upporters in this case offered
any qu a ntified or quantifiabl e data reflecting the impact of any saturation
studies on Colorado -Ute's 1984 and 1989 projections .
51 Tr., vol. III, p. 14.
52 Exhibit E, p. a.
53 Exhibit 70, p.9
32
c. Studi es On The Effe cts Of Pr i ce El asticity
Mr. Keith cou l d identify no price e l ast icity study prepared
by a Co lorado-Ut e memb er; Colorado-Ute 's own s uch study, Appe ndix C to
Exhibit 9, i s t he only one in the reco rd . 54 Colorado-Ute's study,
ass uming a rate of increase in its own wholesale rates of 9% per year
thro ugh the 198 0s, concluded that the pri ce of e l ectricity would have
no impact an red ucing demand for energy in the 1980s unl ess so meth in g
unfo resee n were to reverse the trend of t he 197 0s . 55 Colorado-Ute's
study ass umed ·a 9%/year increase in its owr. who 1esa 1 e price of e 1 ectri city
during the 198 0-1990 time period even t hough its data s how ed those wholesale
rates had in creased at a compound rate of 16.6%/year fro m 1975-198 0 and its
members ' retai l rates increased at a rate of 12.6%/year during t he same
per i od;56 even tho ugh its own who l esa l e rate was to increase more than
15% in 198 157 ; and even though its chief fina ncia l officer had no qua lm s
about ad mitti ng that Colorado -Ute wo uld seek Commission -authorized rate
re li ef annu a ll y at l east t hro ugh 1984 . 58
No eco nomi st assisted or participated in t he Co l orado-Ute
e l astic i ty study .59 The Coa l ition 's Or . Reading critiqued the study.
Dr . Rea ding, a Ph .D. economist, was qualified as the only ex pert in
t hi s docket in statistics, econ om etrics and eco nomi c forecasti ng .
Among the many f l aws Or. Reading observed in Co l orado -Ute's e l asticity
study was the study 's abs urd prediction that "as the price of electricity
went up, people would tend to use more ."60 A result such as this,
Reading opined, was at such variance with economic theory and co mmo n
~~ir ., 'lol. !II, pp. 16-17 56Tr., vol. !I!, pp . 38-39; Ex.9, Appe ndi x C, p.16
57 ~x. 62
58 1r ., vol. !!I, p.41
~9 iesti mon y on J uly 14, 1981 6o!r., val. !I!, o.47
c:x. H, p. 7
33
se nse that Co lcradc -Ute s hou ld have known i t had f und amenta l data and /o r
statistical problems with i ts mod e l.61 Dr . Reading co nc luded a
properl y f ormulated model would i ndeed have fou nd pr i ce e l ast i city
exercising an effect on deman d i n t he 198 0s; Co l orado-Ute's study,
he said, was so flawed it would have t o be reform ul ated to be
usefu l . 62
61Id.
62 Ex. H, p. 9. On rebuttal, Co lorado-Ute witness Krumin s, an engineer-
attorney who l ast took an economics course in co ll ege 20 years ago and
co ul d no t define "econometrics," tr i ed to s how t hat in hi s critiqu e of
Appendix C Or. Reading had incorrectly ca l c ul ated a rate of rea l price
increases of 10-11% per year for t he 1980s. To get 10-11%, Dr. Reading
subtracted an infl at io n rate for 1975-60 of 7.5% from an average
Co l orado-Ute ann ual who l esa l e price increase rate over 1975-1980 of 18 .~.
Ex. H. p. 10. Sub tracti ng an infl ation rate of 8.9%/year instead
of 7.5%/year as Mr. Krumins suggested was proper, wou l d not cha nge the
resu l t of Dr . Reading's ca l cu l ation . Although in its study Co l orado -Ute
subtracted an inflation rate from an assumed rate of annual increase in
its who l esa l e prices (of 9%) over the 1980s to derive a rate of rea1
price increases, Krumins suggested on rebuttal that Dr . Reading should
have subtracted the inflation rate from the rate of retail price
increases to get t he rate of real price increases . If Dr . Reading had
done so, he might have taken the 8.9% inflation rate suggested by Mr.
Krumins in Exhibit 61 from the 12.6% 1975-1980 compound annual rate
of increase in Co 1o rado-Ute 's members' retail prices (Exhibit 62)
to get a real price rate of increase of about 4%. This is l ess t han the
10% rate that would resu l t from proper app li cation of Colorado-Ute 's
own methodology but st ill significant l y greater t han Colorado-Ute 's
0 -.5% pred i cted annua l rate of 198 0-199 0 real price increases.
34
d. Analysis Of The Ef f ects Of Cons ervation
On cross-exam inati on , Mr. Keit h admi tted t hat ne i t her Co lo rado -
Ute nor its members had attempted to quantify demand or energy savings
from a single conservation practice or renewab l e energy source in the
decade of the eighties. Colorado-Ute 's 1980 Power Requirements Study
specifically took no consideration of the effect of conservation measures
such as member distribution of hot water heater blankets, water flow
restricters or electric outlet gaskets . 63 It identified no potential
source of cogeneration or small power production t hat could either reduce
load or the need for Colorado-Ute's own generation, or both.64 And it
made no adju~tment for the saturation of solar hot water heating thro ugh
the me mbers ' service areas. 65 In s hort t he Colorado-Ute power projectio ns
qu ant i fie d abs olu te l y zero redu cti on i n de ma nd or energy on its and i ts
memb er systems t hrough 1990 du e to any lo ad ma nage ment or co nservati on
poli cy . Thu s, we fi nd t hat Mr . Kei th's c l a im s abou t t he compr ehen s iv e ne ss
of th e da t a inpu ts o f Colo rado -Ut e 's pow er r equirements s tudy is l ess t han
me a ningfully acc urate.
Wh en al l f s sa i d and done, Co l orado-Ute's 1980 Power Requ i rements
Study must be acknow l edged as no more, no less than what Or. Readi ng
characterized it to be: the outcome of a "rubber ru1er066 process of
mathematica l straightline trending of historica l data with seat-of-the-
pants guesses and judgments to "bend" the ruler her e and there . Colorado-
Ute's own exhibits show that this method of rubber ruler forecasting has
consistently over-projected since 1975. Exhibit 5 and exhibit 8 to t he
198 0 Power Requiremen~ Study (itself official ex hibit 9) pictorially display
the way Colorado-Ute's 1977 projections co nsistently exceed even its 198 0
63-vol. III, 18. 1 r., p.
64. vol. !II, 19. Ir., p.
55_ Ir., vol. III, p. 20.
601"' ri, 5. c:x. p.
35
ones. Thi s i s because t he rubber ruler aoproach used by Co lorado -Ute depends
so heavily on tre nding his t orica l data and obviously, as Mr . Keith ad mi tted,
t he 198 0 projecti on s have mor e histori cal data relevant to t he period
19 80 -1990 than the projections prepared in 1977 co uld have.67
Mr. Mitchell of the Staff concl uded that Colorado-Ut e 's study
"essentia lly used judgment co upl ed with tre pd s of customer s and average
consumption per customer to derive the forecast.11 68 Mr . Mitchell found
Co l orado-Ute 's projections of southwest Colorado member ioads in the past
had consistently over-projected more t han the projections of load growth
by other Colorado uti li ties had,69 and as a result he fe l t co mp elled to .
reduce Colorado -Ut e 's 1984 southwest memb er demand projection from 338
MW to a range of 275 MW -314 MW.70 Dr. Reading, as an economic forecasting
expert, was forced to conc lud e t hat the 198 0 study "sh ould be rejected
as a basis for mak ing judgments about t he f utu re needs in Co lorado -Ute 's
area" and "should not be used for planning purposes .11 71
Whil e Dr . Reading critiqued Colorado-Ute's 198 0 Powe r Requir ements
Study and Mr . Mitchell ventured an a l ternative to t he study's 1984 southwest
loc a l projections s imply because he "had as much faith " in his own judgmental
estimates as in Colorado-Ute's,72 t he Coalition's witness, Dr . Shah, actual l y
prepared an alternative forecast to Colorado-Ute 's as the resu l t of a load-
resource analysis. Dr . Shah, a Ph.D. electrical engineer with twenty years
experience working for indu stry and government, was qualified as an expert
in power engineering, electrical load forecasting and electrical transmission
system design and planning.
67
68 Tr., vol. III, p. 29.
69 Ex. G, p. 10.
70Ex. 44.
71 Ex G, pp. 9-10.
72 Ex. H, p. 11.
Ex. G, p. 10.
36
Because Co lorado-Ute and its members possessed no "credible"
studi es of t he effect of energy conservation, price elasticity or load
management on consumption or demand t hro ugh t he l98 0s, Dr . Shah did not
build adj ustm ents for those phenomena into his forecast, even t hough he
felt t he phenomena would deflate actua l power and energy requirements. 73
Dr . Shah did, however, examine the separate 1980 power requ irements studies
of Colorado-Ute 's eight western area members 74 as well as the data sheets
for each Colorado-Ute member's individual power requirements study in
appendix D to exhibit 9;75 he also revised Colorado-Ute's 1980-1990 population
estimates for the southwest members by pinning t hose esti mate s to data
generated by the state demographer for counties and incorporated places. 76
Finally, Dr. Shah systematically quantified demand and energy savings
certain to occur in the l980s due to certain techno logica l and economic
developments with which he was fa mili ar both by traini ng and by consu l ting
73 Ex. J, pp . 5-6.
74 They are listed at p. 33 of ex . J and i nc lud e, in addition to the
"southwest" members, White River and Yampa .
-= '~Ex. J, p.6.
76 colorado-Ute's Mr . Krumins admitted on rebut ta l that engineers un trained
in demography (a disc ipline Mr . Krumins claimed never to have heard of)
disaggr~gated the state demographer's data to produce t heir own population
projectio ns :or Colorado-Ute's member s.
37
experience : improve ments in meter efficie ncy, indus trial power factors ,
1 ighti ng sys'tem design and buil ding energy performa nce standards. 77 i hu s,
although his ana ly s is used t he same raw histor i cal statistica l data for
each member that Colorado-Ute used; i.e . the sa me consumption and custom er
c l ass data, Dr. Shah qua ntifi ed some of t he factors that, as Dr. Reading
testified, wou l d make t he 198 0s so different fro m the 197 0s t ha t mecha ni ca l
tre nd i ng of data from t he latter decade inevitably would lead to gross over-
projections. Recognizing that a significant proportion of Colorado-Ute's
· projected demand for the so uthwest members in 1984 and 1989 was made
up of est imates of demand for "potential" large co mm ercia l/indu strial
customers not under contract, Or . Shah produced a low esti mate (excl udin g
those loads) and a high one (including them) for each year . 78
F. COLOR ADO -UTE EXISTI NG GENERATION ANO TR ANSMI SSIO N RESOURCES ARE
SUFFICIE NT TO MEET THE NEEDS OF ITS SO UTHWEST MEMBERS INTO THE MID TO
LATE 1980's.
1. Ge neration Capacity
After cornp l etion as scheduled in 1983 of t he Craig 3 unit now
und er co nstructio n, Colorado-Ute projects its 19 84 capacity will be
l,076 MW. Thu s, with Craig 3 on line, Co lorado-Ute wi ll have more than
adequate net generation and firm power through 1984 to meet even its own
77 Ex. J, pp. 36-38.
78 Ex. J, pp. 36-38.
38
projecti ons o f 1984 memb er de man d. Thi s i nc lud es t he pr oject ed de ma nd
of Co l or ado-Ute 's 14th member , I nte r moun ta in Ru ra l Electric As sociat i on
(Intermount a in ). 79
79
Thi s was es t a bl is he d in l eng t hy exa min at i on of th e l ate Mr. 8ug as (b egi nn i ng
at Tr., vo l . II, p. 204 ) in whi c h net ge neration for t he pre-198 0 13 me mbers
(ex hib i t 25) was comp ared to t he proj ected co inc id ent de mand of t he pre-198 0
13 memb ers (ex hibi t 3 to of f i cia l ex hi bi t 9); s up pl eme nted by examin atio n
of t he l ate Mr . Bugas on t he pro j ected de mands and ava il ab l e firm power for
meeting the needs of I ntermoun tai n, t he new 14th member (See exhibit 26).
The l atter exa mination showed that pursuant to contract with WAPA ar.d Pub l ic
Service of Co l orado, Co l orado-Ute i n 1984 expected to have at least 135 MW
of f i rm power to meet what t he l ate Mr . Bugas agreed was a n overstated projection
of !ntermo untai n's 1984 projected de mand co i nc i de nt wi t h the 13 membe r of 187
MW . ~ Tr., vol. II, pp . 10-ll.
39
Colorado-Ute plan s to have t wo new 1a:-ge 400 Mw uni ts in addi tio n
:o Craig 3 in place by 198 9 . If t hose units are built and i n place, Co lorad o-
Ute ca n easily meet eve n its own high 1989 projectio ns of member de mands.80
Eve~ if those two units a:-e no t built, Colorado-Ute's capacity in 1989
will be mor e than adequate to me et Dr. Shah's 1989 demand projections.81
Vario us resource-demand co mpari so ns appear below .
SUMMARY RESOURCE (CAPACITY) ANALYSIS
MW DEMAND (MW~ % RESERVES
Available Coloraao-Colordo-
Vear Caoacitv Ute ~ Ute
1984 1,076.S 766.9 603.72 40%
1989
(with 2 SW
units) 1,916.5 l,195.8 818.67 60%
1989 (w ith-
out 2 SW
unit.s ) 1,076 .S 1,195.8 818.67 (10%)
Note: (1) Capacity figures from last 2 pages of ex hibi t S; (2)
Colorado-Ute's demand figures from exhibit 3 to exhibit 9; (3) Shah 's
figures from exhibit J, p. 35. All figures are for 13 members exclusive
of Intermountain and potential f irm capacity sales.
~
78%
134%
31%
80 co l orado·Ute 's 1989 capacity projection is 1,916 .S MW. See same sources
as in preceding footnote.
81 see p. 35 of exhibit J, as corrected.
40
2. Tra nsmiss ion Cacacitv
At no pcint in its direct case did Co l orado -Ute_ through witness
or exh i bits state precisely what its so uthwest area transmi ss ion capacity
would be in f uture years. The l ate Mr . Bugas stated t ha t the ex i sting
so uthw est system is adeq uate, with WAPA back-up, to meet Colorado-Ut e 's own
projections of southwest member needs through 19 83 .82 This s uppor ts an
inference t hat WAPA wi ll have backup capacity at Co lo rado-Ute 's peak in
1983 in excess of lS O MW on its 23 0 KV line (the nomin a l capacity of whi ch
according to exhibit l2 i s 200 MW).83 That WAPA ha s so mu c h capacity
avail ab l e of co urse t hrow s doubt on t he persistent (and persistently undocu -
mented) hearsay assert ion of Co 1 orado-Ute ,· s wi tnesses84 and t hi rd-nand
exhibits 85 that WAPA's line is a lrea dy "fully loaded ." More significantly,
it suggests that t he actual capacity of the southwest transmission system
current ly ava il ab l e to Co l orado-Ute is in the neig hbor hood of 300 MW.
82 Tr., vol. II, p. 22.
81 -co lorado -Ute's southwest members' peak can be calculated to be 291 .4 ~"
from ex. 3 to ex. 9. Subtracting the no min al 50 MW of capacity in Colorado-
Ute' s 115 KV line and the 75 MW of southwest generation (see ex. 4)
1 ea ves 178. 4 MW that must be prov i ded by 'ilAPA at the 1983 peak .
84-ror exampl e the late Mr. Bug as at p. 20 of exhibit A.
85 For exa mp le the draft of the Draf t E 19, ex . 16, at p. 26.
An inference t o t hi s effect fi nds s uppor t in t he testi mo ny o~ Mr.
Mi tc hell. Re lying on Yampa Project docu ments s upplied by Co lo rad o-Ute in
di sc ov ery bu t no t entered by Colorado-Ute in to evi dence, Mr . Mi tchell
con c luded t hat t he ex i sti ng so ut hw est system had effect ive carrying capabi l ity
of 306 MW . Gi ve n hi s certa i nty t hat Co lo rado-Ute had over-projected i ts
loads, Mr . Mitchell conc lud ed un equivo ca lly t hat t he ex i st ing tra nsmi ss i on
system wi th ou t~ ucar adi ng .~ !lJ. cou l d meet t he needs of Colorado-Ute 's
southwe st memb ers through 1985-1986.86 Mr. Mi tche ll a lso testif i ed t hat
ser i es comp e nsati on app li ed to WAPA's 23 0 KV lin e could immedia te ly add 20
~~ of add i t ion a l capac i ty; and t hat mo re elaborate seri es co mp ensati on on
t ha t line, i f fo und feas ibl e after a 6-12 mon t h study, co ul d add 100 MW
of capacity.87 Thi s would give the so uthw est system a ca pability in the
neighborho od of 450 MW (325 MW now plus 120 MW t hroug h co mpen satio n) wi t hou t
the additio n of a s ingl e new line. That 450 MW of capacity co uld, accordi ng
to Colorado-Ute 's own projections, a lmo st meet t he so ut hwest memb ers '
req uirements un ti l t he winter of 1987-1988;88 and cou ld meet eve n t he high
estimate of 412 .5 MW for the winter season of 1989 -90 of Dr . Sha h. 89
86 Ex G, p. 10 -11 . This estimate did not consider the effects of this
amount of load in the southwest Colorado area on the ability to transfer
power to the Arizona-New Mexico area. The necessity to transfer energy
to t he Arizona-New Mexico area during peak load periods in so uthwest
Co l orado i s debatable because of t he power exc ha ng e agreement between
WAPA and t he Sa l t River Project. A sens i tivity ana ly sis of t he capability
of t he existing transmi ssion system to provide for increasing so uthwe stern
Colorado loads as well as probable sc hedu l es of generation, including
transfe r s of ene.rgy to the Arizona-New Me xico area was not entered
in to evid ence by Co lo rado -Ut e.
87 Tr. vo l . 5, page 79-80. We fi nd it i s appropriate to take into acco un t
transmi ss i on ca pa city of WAPA even t hough WAPA is nei t her regula ted by nor
an apclicant before t he Commission. See Western Colorado Po wer Co. v. PUC,
~', 15 9 Co l o. at 303-3 04 . --- -
88 1987 southwest demand is 463 MW accordi ng to Ex hibits 3-9.
89 Ex. J., pp. 36-38.
42
We find that Colorado-Ute failed to prove that the existing
transm issi on system, with co nstructi on of some modifications significantly
less exte nsi ve than the proposa l of Co lorado-Ut e her e in , cou ld not meet
the needs of the southwestern member s into the late 1980's.
G. COLORADO-UTE SHOULD PERFORM FEASIBILITY ST UDI ES TO DETERMINE
COST EFFECTIVE ALTERNATIVES TO ITS PROPOSAL HERE!N WHICH WILL
MEET THE REALISTIC TRANSMISSION NEEDS OF ITS SOUTHWESTERN SYSiEM.
Colorado-Ute 's Mr. Walker, agreed that the only systematic evalu -
ation of a lternatives to a 345 KV double-circuit line that Colorado-ute
performed was set forth in the ~ pages of text in the environme ntal analys i s
(ex hibi t 15, p. B-Z, pp . B-5 through B-8 ). The a lternativ es reviewed were:
1. No action
2. Reduction of Project Need through Conserva tio n
3. Purchase of Power
4. Noncentralized Generation Facilities
5. Rebuilding existing Transmission Lines
6. Installing Series Compensation
Each was rejected with cursory comment. Colorado-Ute performed no studies
of the feasibility of any of t he alternatives; nor did WAPA; nor did
Colorado-Ute's engineering consu l tant in the environmenta l review process;
nor did t he REA, the project's potential funder.
The Staff, as well as the Coalition 's witness, Or. Shah, suggested
se vera l transm i ssio n system design alternatives that Colorado-Ute appare ntly
did not consider. Or . Shah was qualified in this docket as an expert in
transmission line planning.
He ~reposed modifications to the existing southwestern Co1oracc transmission
system which, oy creating five new loops, or electric oeltways, in his
judgment would both increase system reliability and augm ent capacity to
handle southwestern Colorado demands for 1989 and beyond. Dr . Shah
beiieves his a l ternatives would do so at a cost of less than Sl5 million,
compared to Colorado-Ute's S193 million share of the project .90
Dr. Shah 's principal alternative had three components. The first
component was to construct a 230 KV line from Cameo to Grand Junction with a
230 KV/115 KV transformer at Grand Junction. The se'cond component was to
construct a new 230 KV line to Delta along with a new 230 KV sw i tching
station on the Rifle-Curecanti 230 KV line with a 230 KV/115 KV transformer
at Hotchkiss. The third component was either to install series capacitors
on WAPA's 230 KV line from Curecanti to Shiprock;91 or to build a new 115
90 Ex. J. pp. 12-13.
91 Mr. Mitchell testified this step alone could add 100 MW of capacity .
KV line from Lake City to Durango. Dr. Shah priced hi s alte rn ative proposa l
92 at $12,59 0,000 . If Colorado-Ute seriously co ns idered hi s a l ternati ve
or any other s imilar one, the record herein fa ils to indicate it. No competent
evidence was presented to rebut the feasibility of this alternative . ...
The testi mony of Mr . 'll eaver (exhibit I), sponsored by Dr. Reading,
recited numerous conservation-based strategies that Colorado-Ute and its
members have rejected without study. Dr . Reading urged that Colorado-Ute
not be allowed to expand bulk transmission capacity on the premise that
future demand would require that capacity until Colorado-Ute had ex hausted
the demand/energy saving potential of these conservation measures .
Or. Sha h recommended as we ll that Colorado-Ute ser iou s l y consider
construction of decentralized "peaker " plants in the southwest load ce nter.93
92 ihe ability of the Cameo -Grand Junc tio n and Rifle -Curecant i 230 KV
iines t o provide capacity for southwestern Colorado loads was not reoutted
by any competent evidence pertaining to the cost, concept, or feasib ility
of t his alternative.
9~ .;Ex. J. p. 12.
45
Peakers, Dr. Shah sa i d , cou l d mee t Co l orado-Ute's s horter t erm sou~hwest
power requirements at a cost, even if t hey bur ned oil, substantially l ess
than the cost of t he "excessive " transmission line losses Co 1o raoo-
Ute and its member s in the case comp l ained of . 94 Dr. Shah 's decentralized
peaker approach was a l so endorsed by Dick Winger so n , a nuclear and che mi cal
engin eer with interests in energy reso ur ces.95 Co lorad o-Ute by co ntrast,
did not produce a study or evide nce in s uppo rt of its decision to reject
the peaker option.
94 see Ex. E, p. 16.
95 Tr., vol I, p. 61, pp. 65-66.
46
The Staff, too, has recommended alterna t ive s. In the Staff 's
vi ew, Co lo rado-Ute:
... has not rea lly attempted to demonstrate t he
eco nomi c co nseq uences or advantages to t he power
system of the proposed course of action [double-
ci rcuit 345 KV line). Instead [Ute] has a lmo st
exc lu si ve ly re li ed on the resu l ts of techni cal
engineering analysis tc provide justification for
t he proposa l . The co ns ideration of a l ternatives,
either of 12!23 or short term ~ature, was n t
ad'ijUateTv addressea:---------
Ex hibi t G, page 5 (emph. s upplied). When the Staff asked Co l orado-Ute for
an economic ana ly s i s of alternatives, what the Staff obtained according to
Staff witness Mitchell, was "a long subjective narrative on t he ad vantages
of the proposal as advanced by [Ute] with very l ittle information concerning
specific a l ternatives." 1£. In 1 ight of the in adequacy of Co l orado-Ute 's
ana ly sis of a l ternati ves, the Staff specifica ll y proposed severa l of its own.
On e of t he Staff's recommendat ion s was that Co l orado-Ute and WAPA
pursue the possibility of seri es co mp ensation of WAPA's 23 0 KV line south
of Delta to add 100 MW of capacity. Ex. G, pag e 13. Mr . Mi tche ll stated
that the st udie s required to ascertai n the feasibility of t hi s proposal
(m a i nl y in light of possible subsynchronous resonance) cou ld be performed
in 6-lZ months ; he also opined that Colorado-Ute cou ld continue to meet its
so uthwest member needs through 1986 with no upgrading of the existing system.
'
Thus, Colorado-Ute could easily study ~eries compensation through calendar
1982 and still have time, if technical analysis proved series compensation
not feasible, to take other steps responsibly to meet southwest member needs.
North of Delta, the Staff has also endorsed an alternative to
Colorado-Ute 's proposal. The Staff would simp ly follow uprating of the
existing Rifle-Cameo 230 KV line (owned by Public Service Company of Co lorado )
to 345 KV with construction of a short, new line from Cameo to Delta and
another from Curecanti to Montrose --all of course, with aporopriate
s ub statio ns. Cf. ex hibit G, pp. 15-16. The Staff has docume nted t hat
its ~1ternative proposal north of Delta wcuid cost so mewh at less than
a.-. I
Cc1arado-Uta's prc;:icsal north of Delta. See exh ~bit 4i. Thus , both Dr.
Shah and the Staff recognized t h ~ existe nce of transmission system pla nn ing
Q' a lternatives t hat Colorado-Ute rejected withou t any meaningfu l study.·0
The Commission. at this time is no t endorsina anv of the alter na tives
discussed in this De cis ion . However, the Co~mi ssi on ass um es that Colorado-Ute
will re-evaluate t he various a lternati ve s which may be uti li zed i n realisticall
forecasti ng and meeting the transmissio n ne eds of its Soutnwestern system
memb ers. In undertaking this re-evaluation, Colorad o-Ute s hould perform
feasib ili ty studi es with regard to the va r iou s a l ternatives, and be prepared
ta present t he same to t he Co mmi ss ion in any future certificate proceeding
involving t he transmission needs o f its So uthw estern membe rs or oth er memb ers.
In Decision No. C81-ll98, issued July 7, 1981, in Case No . 5693,
t he so-ca ll ed ge neric case, we indicated that we were greatl y enco uraged by
t he acti vities of Co l orado uti l iti es in t he area of power poo l i ng. Power
poo ling, of co urse, i nvolves both ge neration and transmi ss i on. That be i ng
the case, i t s houl d be clear that t hi s Comm i ssion is not opposed to appro pr i ate
i nterconn ection capability of Co l orado-Ute wi th other uti l iti es. Howe ver,
our endorsement, and even encouragement, of power pooling does not equate t o
an acquiescence in t he concept of Colorado-Ute being a f uture energy broke r
for t he Western Unit ed States. It i s not necessary for us, in t hi s docket,
to reach any co nc lusion, accept ing or rejecting the c l a im put forth in th i s
case by the Coa li tion that Colorado-Ute envisions itself as a regiona l power
energy broker for the Western United States. Nevertheless, we wish to make
it perfect l y clear that our concept of power pooling and transmission
interconnection does not carry with it any implied acquiescence of the concept
that Co 1 orado-Ute', or any other uti 1 i ty, should p 1 ay the power-broker ro 1 e .
96 Tr. vol. III, p. 105-106.
48
Po wer poo li ng, and t he necessary transmi ss ion in terco nnections which go wi th
it, is des i gned to render reliab l e service at less cost than if individual
uti lity members operated independently of a pool. In other words, once
reliability ha s been assured in a power pool, the primary motive becomes
the reduct~on of costs in the construction and operation of the members '
power systems. Power pooling results in the reduction of production
costs through the co nservation of fuel and capacity, and the increase in
reliability of the bulk power system. The essence of power pooling i s
mutuality. Export of energy, on a more or le ss permanent basis, is not
what we envision as being a regular feature of appropriate power pool-
ing. To the extent that strengthened transmission fac ilities intercon~
riecting with other utilities can be of material benefit tc Colorado-Ute's
members ' systems, Co l orado-Ute should be prepared to demonstrate the same
by c l ear and competent evidence i n any fut ure certificate proceedi ng.
H. Deni a l of Intervent i on
.With respect to the exceptions filed by Col orado and Natio nal
Wild l ife Federation, the Comm i ssion states and f i nds that the Exam i ner 's
denial of intervention and party status to those potential intervenors
was within his discretion and judgment under the factual circumstances·
co nsidered by him and will not be disturbed .
C 0 N C L U S I 0 N
Premises cons idered, we find that Colorado-Ute, in this docket,
has not shown that its proposed 345 KV San Juan Transmission Line is
fina ncially and operationally feasible in me eting the needs of its
So uthwestern distribution mem bers. Accordingly, we are unable to find
and :onc lude that t he public co nvenienc e and necessity requires the
li ne as proposed by Colorado-Ute in t hi s docket.
An approoriate order will be entered .
0 R D E R
THE COMMISSION ORDERS THAT :
l. Applic at ion No . 33226, being the application of Co;orado-Ute
Electric Association, Inc., for a certificate of public convenience and
neces sity to construct, operate and maintain a 345 KV transmission 1ine
and related substation facilities, located in nine counties in Western
Colorado and one county in New Mexico, such facilities collectively to
be known as Rifle-San Juan 345 KV Transmission Line, be, and hereby is,
denied.
2. The exceptions filed by the Colorado and National Wild l ife
Federation on December 3, 1981, be, and hereby are, denied.
3. The exceptions filed by Gunnison River Coalition and Wrights
Mesa Electric Consumers Association on December 3, 1981, be, and hereby
are, granted to the extent the same are consistent with the Order and
Decision herein and in all other respects the same be , and hereby are,
denied.
50
• •
This Order shal l be effective twe nty one (21) days from the
day and date hereof .
DONE IN OPEN ME ETI NG the 5th day of February, 1982 .
(S E A L)
~TiEST: A rl!~C OPY
~d~-~.
Ha-:P:. G:rfl 1gan'i'Jr .
Executive Secr!t3ry
THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO
EDYTHE S. MILL ER
DANIEL E. MUS E
L. DUANE WOODARD
Corrm1 ss1oners
51
I
.a ., . . ......... ~ .... .
Colo rad o -U te Electric Association, Inc .
Mr. Davis Farrar
P. 0 . Box 1149
M o n trose , Colo r ado 81401
Assistant Planning Director
Garfield County Planning Department
2014 Blake Avenue
Glenwood Springs, Colorado 81601
Dear Mr. Farrar:
August 15, 1980
Colorado-Ute Electric Association, Inc.
Rifle-San Juan 345 kV Transmission Line
Revisions to Preliminary Environmental Analysis
. !· . ~ •.
This letter and attachments ide n tify revisions of the
Environmental Analysis that have resulted from joint planning
by Colorado-Ute, the Western Area Power Administration
(Western ), and Public Service Company of Colorado (PSCC ),
concerning the proposed transmission line. Colorado-Ute now
plans to construct and operate a double circuit 345 kV line
from the Colorado-Ute Rifle Substation to the San Juan
Generating Station in New Mexico.
Changes required in the Environmental Analysis include
modifying some of the exhibits and deleting references to a
single-circuit line. The end points, the preferred route,
the alternate routes, the substation locations, the future
plans for the existing Colorado-Ute 115 kV line, and the
proposed double-circuit 115 kV line into the Hesperus
Substation will not change. The proposed right-of-way width
for the double-circuit 345 kV line will be 175 feet, and the
double circuit 155 kV right-of-way line will remain 150
feet.
The following items identify the substantive changes to
the preliminary Environmental Analysis. Please incorporate
these into your review. The editorial changes will be
published in the final Environmental Analysis, which will
also incorporate any changes, or revisions, found necessary
during yo u r review. o ~--~fq~~W~~
\l ll
l AU_~~.s-1980_,il\J
GARFIELD CO . PLMrnER
A-1 through A-7
Table A.5
Segment
A
B
c
D
E
F
G
H
I
J
K
L
M
N
0
p
-2-
attached
Item 6 -the total area of the
right-of-way has changed (see below).
Also, Item 7 changes to a width of
175 feet for all 345 kV portions.
Area -Total Row
Max. Acres (hectares)
1,018.2 (4 1 2.2)
21 2 . 1 (85.9)
8 48 .5 (343.5)
1,29 3.9 (523.8)
678.8 (274.8)
339.4 (137.4)
827.3 (334.9)
No Change
509 • 1 (206 .1)
No Chang e
1,018 .2 (412 .2)
No Change
No Change
No Change
No Change
No Change
Page
A-8 5 -A-8 7
B-3
B-39 & B-40
C-1
D-2
E-7 & E-8
E-9
F -1
-3 -
Q No Ch ange
R No Change
s No Change
T No Change
u No Change
v 784.8 (317.7)
w 1,357.6 (549.6)
x 82 7 .3 (33 4 .9)
y 954 .5 (3 86 .4)
Atta c hed
Prime f a r ml a nd remov e d will be 2 a cre s i n s t ea d
of 2 arces.
Attached
Tax revenues will be $2,275,000 instead of
$1, 1L~7 ,000.
Prime farmland removed will be 2 acres instead
of 1 .2 acres.
Paragraphs discussing single-circuit equipment
alternatives will be deleted.
Section E.2.c. will be revised in the final
Environmental Analysis to reflect the change of
the proposed doub le circuit.
Lan d occupied should b e 9 7 a cres instead of
70 .2. Approx i mat e ly half of thi s land i s
r equi r ed fo r substation facilities .
-4 -
If you have any questions, please contact me .
Enclosures
MEK :mj 1
Very t r uly y o u rs,
'-1/1 J 1L {t_
Martin E . Kenne d y
Environmental Plann er
System Planning Division
A. Project Description:
A. 1. Scope and Purpose of Project :
A. 1. a. Scope of Proje~t:
Colorado-Ut e Electric Association, Inc., proposes to co ns ttuct
approximately 288 miles (465 km) of double circuit 345 kV transmission
line between Rifle, Col~rado, and the San Juan Generating Station near
Farmington, New Mexico. The proposed double-circuit 345 kV trans mission
line will be an extension of the existing Colorado-Ute line fro m Craig
to Rifle, Colorado, and will be owned and operated by Colorado-Ute.
-·.
Initially, 345 -1 15 -kV substations will be const r ucted near Paonia ,
at Lost Canyon near Dolores, Colorado and near Hesperus. Termination of
the 345 -kV line at the existing Rifle Substation will include a 345 -230-kV
transformation. The southern terminus of the ~.ine will be at the exist~ng
345-kV switchyard at the Public Service Company of New Me xi co's San Juan
Generating Statiun near Farmington, New Mexico (see Figure A.5-1). Associated
with construction of the Hesperus Substation, the existing 115 -kV line from
Empire to Durango will be extended approximately 8 miles (13 km) to and
from the Hesperus Substation . This will be constructed as a double -circuit
115 -kV line adjacent to the proposed 345 -kV right -of -way .
The proposed transmission plan is a part of a long -range phased
development by the area power suppliers in the western Colorado -northwest
New Mexico region. Colorado-Ute, Public Service Company of Colorado (PSCC),
and the United States Western Area Power Administration (Western) and others
have planned jointly to develop facilities that serve each party's long -
COLA.EA .z\-1
range needs. As a result of this joint planning effort, the proposed
project will be double -circuited the entire length . The additional capacity
provided by the second circuit will be owried by Colorado-Ute but will be
dedicated for use by PSCC and Western . Addition~lfuture lines required to ensure
continuity for Western and PSCC from Craig to Shiprock, and to provide voltage
support for this project, may be constructed in the future . These additional
circuits are not part of the Colorado-Ute Rifle -San Juan 345 -kV transmission
line project, but are discussed in Section A.9 of this document.
This document analyzes the impacts of the proposed Rifle-San Juan
double-circuit345-kV transmission line, the extension of the Empire to
Durango 115-kVline, and associated substation facilities. The corridor
selec tion proces s is described in Section A.6 .
A.l.b. Purpose e nd Need for Project:
The proposed lines will be used by Colorado -Ute to suppiy needed
additional power to its member cooperatives in western and southwestern
Colorado to provide additional bulk transmission capacity between its existing
and planned generating facilities and to provide additional capacity for the
regional transfer of. power and energy between Colorado-Ute and other power
suppliers.
A.1.b .l. Colorado-Ute Transmission Needs :
Colorado-Ute's peak power requirements including transmission system
losses and generating capacity reserves are identified in Table A.l.b .-1.
The reserve requirement is the minimum considered adequate for planning by
Colorado-Ute, and is consistent with criteria prescribed by the Western
Systems Coordinating Council (WSCC).
COLO.EA A-2
As described in the Scope of the Project, Colorado-Ute has three
re lated needs wh i ch mu s t be satisfied : (1) a need for bulk transmission
s upport to g r owing load centers i n the local southwest e rn Colorado area, (2)
a need for a d ditional b u l k transmission capacity_between Co l ora do -Ute's
present and future generating facilities and all Me mber service territories,
and (3) a need for regional reinforcement. The specifics of these needs
are described below.
A.l.b.l.a. Local Southwestern Colorad o Needs:
Colorado-Ute mem b er loads in southwestern Colorado are presently
served fro m a 115-kV transmission lin e extend i n g between t h e Colo rad o-Ute
Ri fl e Sub s t at ion and the West e rn Shipr ock Substation (Fi g u r e A.3 .c .-1). Th ere
ar e substations at Hotchki ss , Montrose , Nucla , Empir e, Durango , Bayfield and
Pagosa Springs . Appro x imately 5 0 to 60 MW of total electric power can be
r eliably transmitted ove r the e x isting 115 -kV line . Th e line is now fully
loa d e d a n d wi ll be unab le to carry t h e a dd itional p ower re qu ireme n ts fo re-
casted for this area by 1983 (see Table A.l.b.-1).
The primary purpose of the proposed transmission line is to supply
power to four of Colorado-Ute's certificated member service areas: Delta-
Montrose Electric Association, San Miguel Power Association, Empire Electric
Association, and La Plata Electric Association (see Figure A.l.b.-1). The
total peak annual power requirements for these four areas is expected to triple
between 1979 and 1992. The proposed line therefore needs to be routed in
a manner t h at b est serves t h ese areas. Since much of the pro j ected load
demand is concent r ated a r ound th e No r th Fo r k Vall e y and Co r t ez-Durango are as ,
the following points were designated as essential tie -in points for the
COLO.EA A-3
transmission . system: a new substation in the Paonia area, the· Lost Canyon
Substation and the proposed Hesperus Substation.
Several potential projects in the study area could develop into
additional power requirements on the Colorado ~Ute system. Potential projects
include the Mt . Gunnison Mine in Gunnison County, the Shell Oil Company co 2
Project in southwestern Colorado, t h e Dallas Creek Project, the Dolores Project
the Animas -La Plata Project, the Paradox Valley Salinity Project, the
Fruitland-Mesa Project, t h e Dominguez Reservoir Project, and the Mt . Emmons
Project (see Figure A.6.b.-1). All of these potential projects are located
in Colorado-Ute member's certificated service areas. In addition to these
major projects, substantial load growth is expected in some areas due to
development of residential areas, coal mining , uranium recovery, increased
irrigation, and development of recreation facjlities.
In order to ensure continuation of an adequate and reliable supply of
electric power in this area, additional bulk transmission capacity is re qu ired
in the Empir e, La Plata, San Miguel and Delta-Montros e service territories by
1983.
A.l.b.l.b. Bulk Transmi ssion Needs :
At present, Colorado-Ute operates 115-kV, 138-kV, and 230-kV tran s-
mission lines. These transmission lines transfer bulk power from the generation
facilities (Nucla, Craig, Hayden) to various substation facilities, where it
is then further distributed to serve the loads of Colorado-Ut e's customers
(Figure A.l.b.-1 ). Additionally, power is wheeled over this system for use
by Western , PSCC, and the cities of Gunnison, Delta and Oak Creek.
The majority of Colorado -Ute's present generation is located in northwest
Colorado (Table A.l .b .-1), thus currently requiring bulk tiansfuission to
COLO.EA A-4
southwest Colorado. Future generation resources are planned for southwest
Colorado, which will require associated bulk transmission facilities to connect
with the distribution system . The Rifle -San Juan transmission line will serve
both o f t h ese n ee d s.
Ta b le A.l.b.-1 s h ows t h e p eak p ow er re quireme n ts of t h e Co l o r ad o-Ute
load s through 1990. With the projected requirements in 1983, as describ ed in
this table, Colorado-Ute has determined that the existing bulk transmission
system will be inadequate. Also, wh e n operatin g the existin g b u lk system un der
these fully loaded conditions, no reserve capacity is availab le on the
tran s missi on sys t e m t o cov er any un sch e du led re qu iremen ts. Su c h un sch e dul e d
r equirement s may become nec e ss a ry to compensate for generation outage s or to
accommodat e powe r purcha s e s. Also, ba s ed upon memb e r lo a d proj ec tions , the
e x isting Colorado -Ute 115 -kV and 138 -kV transmi s sion system ext e nding from
Hayd e n Gen e rating Station to Shiprock Substation (in New Mexico) must be
rein f or ced wi t h a h igh er vol tag e s yst e m.
Th e present transmission system i n Col o rado is connecte d to systems i n
neighboring states by lines of very limited capacity. An additional h igh er
capacity line is required to improve this connection so that power may be
imported during times of emergency as well as for pooling purposes and the
exchange of power (see Section a.l.b.4.).
A.l.b.2. Western Area Power Administration (Western) Bulk Transmission Needs:
Studies by Western have i d entified the need for two 345-kV transmission
lines from the Hayden-Craig, Col o rad o area to the Sh iprock-San Juan, New
Mexico area . The Rifl e -Sa n Juan project is planne d as a double circu i t to
satisfy Colorado -Ute needs and to accommodate one of the lines identified as
COLO.EA A-5
needed by Western . Future lines required to ensure continuit_y from Hayden
to Shiprock and to provide voltage support for this project are discussed in
Section A.9 . Th~ reasons for Western's need for additional transmission
capacity are as follows :
a) Increased Loads
Figure A.l.b.-2 reflects Wes tern's past and present actual loads
and future projection of load s. These data in dicat ed approximately
3 percent annual increase over the past five years and 3 .8 perc ent
annual increase over the pa st ten years.
Table A.l.b.-2 reflects Western's existing and future generation
capacity to meet these increasing loads .
b) Sites of generation vs sites of loads
The location of Western's generation facilities and loads arP-
separated by substantial distances which necessitate the use of trans -
mission facilities . The power available for loads will b e distributed
in the same p r oportions as now exist within Western's market area.
c) I mp roved system reliab ility for Arizona, Colorado a nd Utah
Additional transmission capacity is needed to accommoda te loop
flows in order to improve system reliability and stability . Th is
need became evident from disturbances such as the one that caused
a cascading outage beginning at Grand Coulee in Oregon and extending
through Idaho, Mont ana and ending in Nevada and Colorado in November
1979 . This was one of the many load disturbances documented by
Western last year.
d) Displacement of oil energy
The use of oil to generate electricity is being replaced with
COLO.EA A-6
e e
other sources where practical. The additional Hayden -Shiprock . . transmission capacity will permit greater use of nonoil generating
sources (i .e., hydroelectric).
e) Environmental considerations
The use of the second circuit of the Colorado-Ute Rifle-San Juan
line will allow Western to meet its current load demands while
reducing the need for an additional corridor through this area
at this time.
A.l.b.3. Public Service Company of Colorado (PSCC) Bulk Transmission Needs:
Studies by PSCC have identified the need for additional electrical
capacity from the Rifle, Colorado area to the Four Corners area . The trans -
mission pathway to carry this capacity will be provid e d by the sec ond circuit
of the Colorado -rt e Rifle -San Juan 345 --kV tranr;mi ss ion lin e. Additional fu1 : .ire
circuits required to ensure continuity from Rifle to Four Corn ers are d iscus sed
in Section A. 9 .
The reas on s for PSCC's need of additional transmission capacity include:
a) Need of long-term link to Four Corners area
Previously, the only link to the south and southwest has been
the Curecanti-Shiprock 230 -kV transmission line owned by Western .
PSCC has utili z ed surplus capacity in this cir cuit , but bnly on a
limited basis and only in a south to north transfer direction .
The Rifle -San Juan 345 -k V line provides an opportunity for firm
power and energy transactions between its system an d the Four
Corners area on a long -term basis. This participation c ould res ult
in PSCC acquiring 25 0 MW of firm capability on a long -or short term
basis.
COLO.EA A-7
e e
increased system reliability. An insulated masonry block building will
be constructed to serve as a control house .
Two 345 kV circuit breakers and associated breaker bays will be
re qui red to terminate t h e line in th e existing s witchyard at Public Servic e
Co mp any of New Mexico's San Juan Generation Station.
A. 9 . Transmission System Planning:
Plans for the future electrical transmission system in western
Colorado have been developed jointly by various electrical power s uppl iers .
These suppliers include Colorado-Ute, the Western Area Power Administration
(Western) and Public Service Company of Colorado (PSCC).
The three a bove -me ntion e d entities are particip atin g with others
in a study to d e t ermin e future system a dditions n eeded i n western Colo rado
and Utah . Th e r tudy has identified the need ~or two 345 kV transmission
from the Hayd e n -Craig area to the Shiprock-San Juan area. Additional lines
will be develop e d as system loads increase beyond the foreseeab l e futur e.
The following lines are anticipated to satisfy specific load
requireme n ts a nd provide voltage suppo rt for t h e Rifle -San Juan line.
1 . A 345 kV transmission line from Craig Generation Station to
Western's Rifle Substation would be constructed to provide
continuity for the second Rifle -San Juan circuit from Hayden to
Shiprock . This facility would probably be an uprate of the e x isting
230 kV line and would be owned entirely by Western.
2. A 34 5 kV transmission line from Rifle Substation to Delta via
Grand Junction would b e constructed b y Western and PSCC. Western
would us e this circuit to market the power provid e d by the proposed
Dominguez pump -storage project. PSCC would use their capacity in
A-85
this circuit for their Grand Junction loads.
3 . A 345 kV trn a smission lin e from Lost Canyon Substation to
Ship r ock Substation would b e constructed by We st e rn . This
faci l ity wou ld p rovi d e continu ity fr om Ha y d e n t o Sh i p r o ck a nd
would b e an alternate to the route t h rough Hesperus.
4. A 345 kV trnasmission line from Mo n trose Substation to Curecanti
Substation would be constructed to provide an interconnection
between the Rifle -San Juan 345 kV system and the Western 230 kV
system. This facility would probably replace the existing 115 kV
circuit, and would be constructed by Colorad o-Ute, Western , and
P SCC . Th e i n terc onn ection wo u l d p r ovid e re l ia b i l ity i n t h e e v e n t
of line fai lure in the Ri f l e-S an Juan sy s t e m.
5. A 345 kV transm i ssion lin e from th e San Juan Ge n e r a ting Station
to th e 3h i p r o c k Sub s tation to th e Four Corn e r s Sub s t a tion would b e
c on stru cte d t o p r ovi d e con tinu ity t o the Fou r Corn ers St at ion.
A portion of t h is facility would pro b ably replace the existing 23 0
kV circuit, and would be constructed by Colorado-Ute, Western,
and PSCC.
6. A 345 kV transmission line from Craig Generating Station to
Hayden Substation would be constructed, probably as an uprate
of one of the existing 230 kV lines. The cost would be shared
by Colorado-Ute, Western, and possibly others.
7 . Colorado-Ute's future planning includes new substations for
t h e Meek er, Nat u rita, and Mo n tro se areas. Th ese facilities
would b e con s tructed when lo a d grow t h in those lo a d ar eas
justifies these facilities.
A-86
l
f ~\
f '
\ Ii
Location studies for these additional lines are not available.
These lines will be the subject of additional NEPA documents at future dates
as more information is known . The intent of mentioning these additional
facilities is to make t h e rev iewin g publ ic a ware of t h e i n terre l ated p lan s
o f t h e t h ree e nt i t ies.
* * *
A-87
D. .The Colorado House Bill 1041 provides a vehicle for community planning.
All developments must be in accordance with the county planning
re qu irements. Additionally, permits f o r the location and operation of
developments must be in accordance with ~ta te and federal environmental
reg ulations and must have prior approval by each respec tive county
g ov ernment. It is, therefore, the local plarming officials, and not the .
availability of electrical power, that determines the level of fu tu re
indu strial, commercial and residential development in each county.
E. As a regulated utility of the State of Colorado, Colorado -Ut e is
ob ligated by s tate law to provide electrical power and energy to the
pe ople and industries within the cert if icated service areas of
Colorado-Ute's mem be r systems .
It iB therefore concluded that neither the construction of the
Rifle -San Juan 345 -kV transmiss i on facility or tpe availability of adequ11ce
power and energy will crea te additional development s and s ubsequent i mpacts .
B.14. Cumul a tive Effects:
The construction of the proposed Rifle -San Juan 345 -kV transmission
line as described in this environmental assessment will precede construction of
additional facilities by Western and PSCC . As described in Section A.9 of this
document, Colorado -Ute , Western, and/or PSCC may be involved in the construction
of interconnecting facilities . As previously stated, the
planning for these facilities is preli minary at this ti me and,
therefore, specific data are not yet available. As a result,
the~e Lines will be the s ubje ct of future environ mental
documents .
B-39
It is recognized that there may be environmental impac•ts associated
·with . thI? .construction of these additional facilities . However, because of t'.·.e
diverse nature of alterna tives avail a ble to Western and PSCC, the nature and
severity of the impacts cannot be accurately determined at th1s time. Efforts
will be made to locate transmission facilities so they will ca u se minimal impact
on the environment, through consideration of new aligrurient alternatives,_use of
existing corridors, uprating of existing facilities and replacement of old
facilities with new facilities, and investigation of other alternatives .
B-40
Montrose, Colorado 81401
Mr. Davis Farrar
Assistant Planning Director
Garfield Coun ty Pla n ni n g De p artment
2 0 1 4 Blake Avenue
Glenwo o d Springs, Colorado 816 0 1
De a r Mr. F arr a r:
Rifle -San Juan 345 kV Transmi s sion Line
Enclosed you will find Figure A .4 .b .-1 to be inserted
after page A-22 in the Rifle -San Juan 345 kV Transmission
Line Environmental Analysis which you recently received .
If you have any question s i please contact me .
JAW/MEK : jmh
Enclosure
Very truly y ours,
Manager , Environmental Services
System Planning Division
J
Colorado-Ute Electric Association, Inc.
CERTIFIED MA IL
P. 0. Box 11 49
Montrose, Col orado 81401
RETURN RECEIPT REQUESTED
Mr. Davis Farrar
Assistant Planning Director
Garfield County Planning Department
2014 Blake Aven u e
Glenwood Springs, Colorado 81601
Dear Mr. Farrar:
Rifle-San Juan 345 kV Transmission Line
Co l ora d o-Ute E lectric Associ~tion, Inc., p roposes to
c on s t r u c t a ppr o xima t e l y 2 86 mil es of 3 4 5 kV tran s mi ss i o n line
b e twe e n Rifl e, Color ado and the San Juan g e n erat ing s tation
near Farmington , Ne w Mex ico . By con s tructing thi s p r opo s ed
line, Colorado -Ut e c an s upply the n ee d for additi o n a l power
to it s member c ooperative s in We s tern a nd Southwestern Colorado .
Enclo s ed i s the following information :
1 . Two (2 ) blue p r in t cop i es o f t h e p r opo se d align -
ment throu gh Garfiel d Co u nty.
2. One (1) copy of the Draft Environmental Analysis
prepared by Burns and McDonald.
Please review and comment on the above -mentioned material
in writing to me . If Colorado -Ute needs to complete any
special permits or meet with the County Planning Commissioners,
please advise me and we can set a date for any future meetings .
If you have any questions concerning the contents of the
above -listed items, please do not hesitate to contact me or
------_______ _..... __ _
Mr. Davis Farrar -2 -July 15, 198 0
Bob Anderson at (303) 249-4501.
Thank you for your cooperation in this matter.
JEO/RLA/bt
Encs.
cc: K . M. Hale, w/o encs.
Very truly yours,
~J'l"l/2':1~1~
John E. O'Fallon, Manage r
Right-of-Way and Land
Acquisition
F . A . Kuhlemeier, w/o encs.
H . Bjelland , w/o encs.