Governors' Wind Energy Coalition

Case challenging Colorado’s largest utility’s condemnation powers could resolve conflict over 550 feet of right of way on an Eastern Plains farm

CHEYENNE COUNTY  — The future of clean energy generation in Colorado rests on the fate of a 550-foot right of way across an Eastern Plains farm — or at least that is the argument Xcel Energy is making in an unprecedented appeal to the state Supreme Court.

Xcel Energy, the state’s largest electricity provider, is asking the state’s highest court to overturn a ruling by Cheyenne County District Judge Mike Davidson that the utility did not have the power to condemn the strip and that it had acted in bad faith.

“This case presents an important statewide question at the intersection of Colorado’s eminent domain, utility regulation and clean-energy laws: whether a regulated electric utility may condemn easements for transmission lines connecting renewable generation to the grid,” Xcel Energy said in its Supreme Court appeal.

Two company-owned wind farms — Singing Grass and Cheyenne Ridge II — are poised to go online if they can connect to the Goose Creek substation and from there to Xcel Energy’s $1.7 billion Power Pathway transmission line.

The two wind farms will provide more than 1,000 megawatts of generating capacity, about enough to power 300,000 homes, according to National Wind Watch.

 “The case is of such imperative public importance as to justify the deviation from normal appellate processes and to require immediate determination in the Supreme Court,” the company argued.

At Xcel Energy’s urging, the Colorado Energy Office and Tri-State Generation and Transmission Association said  they are considering filing amicus briefs in support of Xcel Energy’s subsidiary Public Service Company of Colorado, or PSCo.

“The District Court’s decision throws doubt and confusion not only into Public Service’s ability to complete the power line, but also into other utility projects already underway in Colorado,” the energy office said in a statement.

The dispute is between the utility and Dryland Partners, a family farming and ranching operation run by Darin Dickey and his brothers. At issue are the location of the right of way, the compensation and whether Xcel Energy has condemnation power for this particular line.

In 2022, the Dickeys sold Xcel Energy about 90 acres, for $585,000, as the site of the Goose Creek substation. Subsequently Dryland Partners negotiated a right of way so NextEra Energy Resource’s Dusty Rose wind farm, in neighboring Kit Carson County, could connect to Goose Creek.

Dickey said Dryland is also negotiating with a solar developer. “We are all for clean energy. The doors are open,” he said. “We want those turbines turning.”

“The problem is where they want the right of way,” Dickey said as he stood at the intersection of County Road 36 and County Road DD, with nothing visible in any direction but browning fields and the Goose Creek substation.

Xcel Energy wants to run generation tie lines 27 miles from Singing Grass facility to the substation and a line 5 miles from Cheyenne Ridge II. The company said it had negotiated with more than 100 landowners for easements and had the entire route, save for the last bit.

“Despite years of negotiations, one remaining landowner issue, involving approximately 550 feet of easement, remains unresolved after extensive efforts to reach an agreement,” Xcel Energy said in a statement.

Xcel’s proposed route raises safety questions

The problem, Dickey said, is the utility’s stubbornness. Xcel Energy wants to run the line south down County Road 36, angle it across the intersection and route it down the east side of County Road DD to the substation.

Angling the line will require putting a tower on the side of the road that could raise safety issues with heavy-duty farm equipment and also compromise a gas pipeline right of way Dryland Partners holds.

“If they run in it on the west side of the road, which is also our land, and cross at the substation you don’t have these problems,” Dickey said. Dryland Partners also proposed another right of way continuing south through the intersection and cutting across a field.

“Xcel Energy evaluated transmission line route modifications, reduced the amount of easement needed and offered other accommodations to address landowner concerns,” the company said. It did not, however, change the route.

“PSCo has selected a route for its generation tie line that maximizes harm to Dryland, while a viable less damaging alternative exists,” Judge Davidson said. “Accordingly, the Court concludes PSCo has acted in bad faith.”

The second issue was the cost of the right of way. Xcel Energy offered the Dickeys $19,000, which was far less than NextEra paid, Bradley Haight, the Dickeys’ lawyer said, but he could not offer details.

“Xcel asked for a protective order on the economics, and I just can’t discuss it,” he said.

Nevertheless, in its statement Xcel Energy said Dryland Partners was seeking 2,500 times the $19,000 offer or $47.5 million.

“That’s not accurate,” Haight said. “We entered a protective order, which Xcel requested. All I can say is they can get an easement at a reasonable price.”

Finally and most crucial in terms of state policy, is the question of whether Xcel Energy has the power to condemn land for a right of way for a generation tie line that links a generating project to the grid.

A utility’s power to use condemnation for transmission lines is established, but Dryland Partners argued, and the district judge agreed, that a tie line isn’t transmission.

The Federal Energy Regulatory Commission defines transmission as lines that connect generation to distribution networks. Generation interconnection tie lines, called gen-ties, are dedicated power lines, usually private, that connect a generating facility to the grid.

For example, NextEra built the gen-tie from its Dusty Rose wind farm to the Goose Creek substation.

“The tie line is private. It belongs to the project only. It’s not intended to have any public use, public access,” Haight said. “I don’t think any independent power producer would dispute that it could not condemn its way into Goose Creek.”

What complicates the Singing Grass dispute is that while the wind farm was developed by Apex Clean Energy, it was purchased by Xcel Energy before Apex had negotiated a tie line.

“When Xcel picked up the projects, they stepped into the shoes of the private developers,” Haight said. “What they tried to do was have the same benefits as the private developer, the revenue opportunity, but also the authority of a utility to condemn.”

In its appeal to the state Supreme Court, Xcel Energy said leaving generation ties outside a utility’s condemnation authority “will disrupt the legal framework governing how renewable projects connect to Colorado’s grid and delay critical renewable energy development statewide.”

Xcel Energy is also facing opposition to its use of condemnation in Elbert County, where county commissioners opposed a 48-mile section of the 550-mile Power Pathway proposed to run through the county. As in Dickey’s case, it is not the line but the route that is at issue.

Xcel Energy employed a rarely used statute to have the Colorado Public Utilities Commission overrule the county. Undeterred, Elbert County is seeking to challenge the PUC ruling in court.

The Power Pathway runs right by the Goose Creek substation, but without a tie line, no wind or solar can get on the pathway.

“Generation tie lines are the essential arteries through which nearly all electricity must flow to reach Colorado consumers,” the company said in its court filing.

And so, the company is trying to marshal support from the state and from Tri-State, the other major electricity producer in Colorado.

“This is not a statewide issue,” Haight said. “It is Xcel messing up and looking for somebody to help bail them out.”