With a surge in interconnection requests from large load customers, Public Service Company of Colorado (PSCo) has fallen behind on processing applications, a situation that has sparked concern from state regulators.

The Colorado Public Utilities Commission held an informational meeting Dec. 16 to hear about large load service issues. The meeting was part of an investigatory proceeding the PUC launched in October after hearing a range of concerns from PSCo large load customers including whether they can execute contracts with utilities in a timely manner. The state may have lost some potential large customers as a result, a commission order said.

PUC staff said PSCo’s interconnection delays seem to be a recent phenomenon. The utility was receiving two or three interconnection requests a year from large load customers up until 2024, when the number of requests jumped to 18.

In the past three years, PSCo has received 37 large load interconnection requests, PUC staff said. Only two of those applicants have made it to a signed interconnection agreement. Eight have dropped out or are on hold.

Nineteen requests are stalled in the system impact study (SIS) phase, one of the first steps in the interconnection process. The SIS identifies system constraints and needed upgrades and may include a cost estimate.

Applicants pay a fee for the study and agree to a delivery time frame, which has typically been four months but more recently has increased to six months.

Ten of the 19 applicants stuck in the SIS phase paid for the study six to 12 months ago; four paid more than a year ago. The other five paid two to six months ago.

Of the 37 interconnection requests in the last three years, PUC staff found only one in which the SIS was finished on schedule.

PSCo’s Open Access Transmission Tariff specifies that the utility complete the SIS within 60 days of a signed study agreement. If the utility is going to miss the deadline, it must give the customer an explanation and a new completion date.

“The 60-day timeline … appears overly optimistic relative to PSCo’s ability to process the large load requests it has received in the past three years and is inconsistent with the SIS agreements PSCo is signing with large load applicants,” PUC staff said in a presentation.

One reason for the delays is that PSCo is short-staffed, PUC staff said, in part because employees who handled interconnection requests left for jobs with data center companies. Commissioner Tom Plant found “a little irony” in the situation.

Xcel Energy Responds

In an emailed statement, PSCo parent Xcel Energy acknowledged that large load customers have faced delays and uncertainty with their interconnection requests.

The company has been working over the past year to improve large load customer service. Measures include adding staff, hiring consultants, modernizing processes and collaborating more closely with customers.

But the improvements “will not solve everything,” Xcel said.

“Even with faster project studies and better communication, Xcel Energy cannot energize these customers without adding significant generation and transmission capacity to the grid that serves our communities,” the company said. “Over the past 18 months, the scale and speed of growth have outpaced what Colorado’s energy system was built to handle.”

Xcel is working with the PUC and stakeholders to bring new resources online. The company expects to file a large load tariff in early 2026.

“Customers need certainty to plan investments, and we support efforts to create fair, transparent rate structures that balance flexibility with affordability for all Coloradans,” Xcel said.

Customer Perspectives

As part of their research, PUC staff interviewed representatives of 13 companies and organizations that were current or prospective large load customers of the state’s PUC-regulated electric utilities: PSCo and Black Hills Colorado Electric. Interviewees were with data center companies or other industries with high power demand.

They suggested ways to streamline the interconnection queue and discourage speculative loads. Those included larger, nonrefundable study fees and, for data centers, proof of end user and developer track record.

On the topic of large load tariff design, customers were interested in an option to “bring your own generation” — either in front of or behind the meter.

Many said they’d consider flexible loads to speed up interconnection, especially if their load flexibility could be monetized.

Customers said they’d like to see more consistent large load processes within Colorado, as well as nationally.