Project will upgrade a key connection between two of the nation's major power grids

AURORA — Today, Governor Jared Polis announced that the Colorado Energy Office (CEO), in partnership with Xcel Energy Services, Inc., has been selected to receive a $250 million investment from the U.S. Department of Energy (DOE) to strengthen a key transmission connection between Colorado and Texas, linking the Western and Eastern grids. The project will help Colorado meet growing electricity demand, improve reliability, and expand access to lower-cost power.

"This means lower costs and fewer outages for Coloradans. By strengthening Colorado's electric grid and expanding our ability to share power with other regions, we can better protect families and businesses during extreme weather and periods of high demand while continuing to save people money. Electric grid improvements are exactly the kind of long-term investment our country should be making to strengthen our economy and save people money," said Governor Polis.

The Colorado side of the connection will move from Lamar to the higher capacity May Valley substation, connecting it directly to the Colorado Power Pathway transmission network. Together, these improvements will help reduce strain on the grid, prevent outages, and give consumers access to more sources of lower-cost electricity by drawing from a larger pool of energy sources. By upgrading existing equipment and power lines instead of building entirely new transmission corridors, the project can also increase capacity while limiting construction costs and land use impacts.

"President Trump's Department of Energy is making significant investments in energy infrastructure to power America's future and lower costs for hardworking families and businesses. This $250 million investment will ensure that households in Colorado and across the Western United States have access to secure, abundant, and reliable power, even during severe weather and periods of increased demand. Affordable, reliable energy is the fundamental building block of a thriving economy and vibrant communities, and President Trump and Secretary Wright are committed to securing America's energy future," said Tim J. Walsh, Assistant Secretary for Environmental Management at the U.S. Department of Energy.

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The nation's power grid is divided into large regional systems that currently have a limited ability to share electricity between them, making it difficult to manage the demands of multiple energy grids. The Colorado-to-Texas Western-Eastern Intertie Modernization Initiative, or CO2TX, will upgrade an aging connection near Lamar that allows electricity to move between the Western and Eastern grids. Critically, today's announced federal funding will support the project's total $1.2 billion cost with the Department of Energy's $250 million dollar contribution and Xcel Energy Services Inc.'s 80% match, cementing the project's financing.

A closer map view of the Colorado to Texas connection project with additional project information reading as follows: Increase tie from 210 MW to 700 MW with capability for 2000 MW in the future; 37 - 136% increase in the Western Interconnection/Eastern Interconnection transfer capability. Expands access to lower-cost energy and supports rapidly growing large loads. Strengthen resilience during extreme weather by providing link between the Eastern and Western Interconnections. Cost benefit scenarios of 1.2 - 4.6.

"Updating and improving our power grid infrastructure is essential to ensure Coloradans have access to reliable, low-cost clean energy throughout the day and year round. Xcel Energy Services Inc's proposed project will allow optimized use of clean energy resources across a much larger geographical footprint which will save Coloradans money on energy costs. We are grateful to the Department of Energy for investing in Colorado's grid resilience to benefit our regions for years to come," said Will Toor, Executive Director of the Colorado Energy Office.

The project will replace older equipment with a modern system that can move electricity more reliably between the two grids. It will also upgrade existing power lines with higher-capacity wires, allowing lines to carry more electricity without building entirely new transmission corridors. Specifically, the project will increase the amount of electricity that can move between the two regional grids from 210 megawatts to 700 megawatts, with the ability to expand to 2,000 megawatts as demand grows.

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Upgrading the connection and expanding Colorado's ability to bring more energy onto the grid will also create new economic opportunities and good-paying jobs. Qualifying construction work on the project will be required to meet federal apprenticeship utilization and prevailing wage standards. This will help to train the next generation of skilled workers and ensures Coloradans building the state's energy future earn competitive wages.

The funding behind today's announcement was made available through the Infrastructure Investment and Jobs Act of 2021, which authorized DOE's Grid Resilience and Innovation Partnerships initiative, and the Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades (SPARK) funding opportunities. Colorado was selected through the SPARK program.

"Reliability is at the heart of this project and everything we do at Xcel Energy. Modernizing the Lamar Tie will strengthen the connection between the Western and Eastern electric grids, helping us better serve customers during extreme weather, meet growing energy needs and make the most of affordable energy resources across the region. With support from the Department of Energy, this smart, cost-effective investment will strengthen reliability and deliver long-term value for customers and communities today and into the future," said Robert S. Kenney, President of Xcel Energy–Colorado.

CEO is the prime recipient, with Public Service Company of Colorado and Southwestern Public Service Company, both Xcel Energy Services Inc. subsidiaries, providing the funding match, system planning, design, and implementation. Southwest Power Pool will provide regional coordination and grid expertise.

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