The Colorado Energy Office is set to receive $250 million in federal funding to improve the electricity transmission links between the Eastern and Western power grids, the U.S. Department of Energy announced Thursday. This allocation is part of a larger $1.9 billion federal investment aimed at funding 31 grid-improvement projects across the country.
Colorado Gov. Jared Polis, a Democrat, stated that this investment means "lower costs and fewer outages for Coloradans." He emphasized that strengthening the electric grid and expanding the state's capacity to share power with other regions will better protect families and businesses during extreme weather events and periods of high demand, while also saving people money.
The specific project for Colorado will focus on expanding interregional transfer capability, improving system reliability, enhancing operational flexibility, and strengthening grid resilience across Colorado, Texas, and neighboring regions, according to a summary from the Department of Energy. It involves moving a transmission connection between Colorado and Texas to the higher capacity May Valley substation, located in southeastern Colorado.
This modernization will use higher voltage wires to more than triple the amount of electricity that can move between the two regional grids, increasing capacity from 210 megawatts to 700 megawatts. The infrastructure could potentially carry up to 2,000 megawatts of electricity in the future. This effort is part of a broader set of investments known as the Colorado-to-Texas Western-Eastern Interior Modernization Initiative, or CO2TX, which aims to improve the multi-state transmission system.
Will Toor, executive director of the Colorado Energy Office, stated that Xcel Energy Services Inc.'s proposed project will allow for the optimized use of clean energy resources across a much larger geographical footprint, which he anticipates will save Coloradans money on energy costs. Robert Kenney, president of Xcel Energy–Colorado, added that modernizing the Lamar Tie will strengthen the connection between the Western and Eastern electric grids, helping Xcel better serve customers during extreme weather, meet growing energy needs, and make the most of affordable energy resources across the region.
Colorado, alongside Oklahoma, received the most federal funds from this round of allocations, both at $250 million. The money was made available through the Infrastructure Investment and Jobs Act of 2021. Xcel Energy is also contributing an 80% funding match for the project.
The project's approach, which involves modernizing existing equipment and lines, aligns with a March executive order from President Donald Trump that seeks to maximize existing right-of-ways rather than pursue new construction. Furthermore, in July, Governor Polis and other Western governors initiated a task force with the goal of prioritizing upgrades for the region's energy grid.
