A pair of geothermal energy developers are getting some much-needed funding to advance their quest to access the hot-water resource deep underground in Chaffee County. The money is coming from the state energy office and investors including one who “grew up around the benefits of geothermal” in Iceland. 

Hank Held and Fred Henderson, the pair behind Mt. Princeton Geothermal, have joined forces with Western Geothermal and Reykjavik Geothermal for exploration and development of the water that boils thousands of feet beneath the Earth’s surface along the Rio Grande Rift, which stretches from New Mexico into southern Colorado.

According to Held, Western Geothermal agreed to match a $500,000 grant Mt. Princeton Geothermal applied for from the Colorado Energy Office, which this year has awarded $7.7 million through the Geothermal Energy Grant Program to advance the use of geothermal technology in the state.  

With the combined $1 million, Mt. Princeton Geothermal can move in the direction of drilling two exploratory wells they hope will tap a reservoir of water believed to sit at a depth of between 4,500 and 6,000 feet. 

Held said the money will be “insufficient for our complete drill plan, so we are in consultation with additional prospective investors.”

But if the wells in question prove that a reservoir of hot water capable of generating 10 megawatts of energy lies beneath the land in Chaffee County, he said the partnership could yield a “potentially massive investment,” on the order of $40 million to $43 million.

Geothermal’s new rules  

The Mt. Princeton merger preceded the Colorado Energy & Carbon Management Commission’s announcement Monday that it has adopted its first set of rules for deep geothermal operations. Those rules follow the expansion of the commission’s focus on energy and carbon management projects outside of oil and gas which went into effect last summer.

Held, Mt. Princeton’s CEO, said Tuesday he hadn’t had enough time to digest the new standards, but after “glancing over them” saw, “generally speaking,” they include revisions the men had the opportunity to comment on this spring.

In an interview earlier this summer, Held described some of the hoops he and Henderson have had to jump through since the ECMC took over. 

“According to the previous procedure, we would make our geothermal drilling application to the Department of Water Resources,” he said. “Then, because our prospective well meets two criteria — it’s probably over 212 degrees and deeper than 4,000 feet — our application would be referred to the Oil and Gas Commission for their approval.”

The Oil and Gas Commission approved those types of wells in the past, but the issuing authority before the ECMC took over jurisdiction continued to be with the Department of Water Resources, he added. “Now, under ECMC, all of the regulations have changed, and they’re trying to separate our type of geothermal — hydrothermal — from enhanced geothermal, which involves fracking. With hydrothermal, we’re simply going down to what we believe to be a known hot water source to bump it up, extract the heat and put the water back in the ground.”

Henderson, Mt. Princeton’s chief scientist, has in the past said Colorado’s green energy regulations are some of the strictest in the country, making it hard for developers to attract investors. 

But Gudmundur Heidarsson, one of Western Geothermal’s investors, said, “having lived in at least three European countries and three U.S. states, I can’t think of a government that’s more helpful than the Colorado government. 

“I mean of course we’re doing something that hasn’t really been done in the state, so there’s a lot of learning,” he added. “There’s a lot of change in legislation and processes that needs to take place. But I’ve found officials to be easy to get hold of, to be helpful, and also, which I actually appreciate, a little bit careful in terms of making sure nobody’s coming in and doing something that is hard to reverse.” 

Local resistance persists 

For years, Henderson and Held have faced substantial pushback from residents of the Lost Creek Ranch subdivision, which lies about a mile from the proposed drill site. Opponents say 900 private wells could be impacted by a “geothermal project of this magnitude” and that their homes are built on the same fault line as the drill site, which they worry could “increase the potential for earthquakes.” They also fear noise pollution and odor a proposed plant could create. 

But in closed-loop systems, which is likely what Henderson and Held would build, gases removed from the well are not exposed to the atmosphere and are injected back into the ground after giving up their heat. So air emissions are minimal, and Heidarsson says, “we have buildings all over the place, so that’s not going to be any different than any other industry, in a sense.” 

Mt. Princeton Geothermal, Western Geothermal and Reykjavik Geothermal announced their merger June 19 at a community meeting in Buena Vista. Representatives from the Icelandic Ministry of Energy, Business Iceland, Green by Iceland and Chaffee County also attended.

Heidarsson said the meeting went well, which pleased him, because “you want to make sure you have a good communication with everybody around and you’re doing things in a sustainable way. As an entrepreneur in this area, I appreciate that, because it builds trust in the community and a path to continuing projects down the line.” 

The Colorado Sun reached out to Tom McCracken, a vocal opponent of the plan, who declined to comment while he runs for Chaffee County commissioner, he said. Blane Clark, who McCracken suggested may speak with The Sun, didn’t return emails Thursday.

With new investors, new potential 

Heidarsson said he and his partners discovered Henderson and Held after searching for a geothermal source in the Leadville area and failing to find one suitable for development. 

“So, we kind of started to look down the (Rio Grande) Rift, if you will, and essentially came across what Hank and Fred had been doing for the last 12 or 13 years,” he added. “And since they had done some of the initial water testing and had some seismic data that they’d run in the site, we found that interesting and went to see if they were willing to work with us.” 

They were, so Heidarsson brought some of his partners from Iceland as well as some research companies and the University of Reykjavik in to see where they could connect the dots on the project. 

He said it’s a little late for them to start drilling this fall but he’s optimistic they can get the licensing, internal contracting and financing needed to have the preliminary drilling in place by early spring.

“But geothermal is one of those industries that just takes a bit of time to get everything right,” he added. “It’s not just turning on a spigot.”

Facing millions of dollars in fines, dozens of violations, legions of complaints from homeowners as well as local governments, oil and gas operator Prospect Energy on Wednesday had its right to do business in Colorado canceled.

The Energy and Carbon Management Commission endorsed a settlement agreement between the commission staff and the Highlands Ranch-based company. Prospect Energy also has an agreement with Larimer County and Fort Collins to clean up sites.

As part of the agreement, $1.7 million in ECMC fines will be waived, with what funds the company has going toward securing and cleaning up its sites. Prospect Energy was fined for illegal flaring, spills and failing to do well-integrity tests.

Prospect Energy’s 59 wells will end up in the ECMC Orphan Well program and will eventually be plugged and abandoned by the state.

Under the agreement, Prospect Energy’s owner, Ward Giltner, must obtain commission approval before owning or operating any future oil and gas properties in Colorado. Giltner did not reply to email and telephone requests for comments.

The company, however, still faces $337,000 in fines from the state Air Pollution Control Division for air emission violations. In 2022, the division ordered one of Prospect Energy’s sites closed until dangerous emissions could be curbed.

“This is an exceptional and rare course of action,” APCD director Michael Ogletree said at the time. “This is a unique situation that calls for extraordinary measures to ensure we are protecting public welfare.”

Division inspectors found emissions of volatile organic chemicals and hydrogen sulfide, which smells like rotten eggs, on repeated visits to the company’s Krause facility tank battery.

“These issues have been going on for more than four years,” said Matt Lafferty, Larimer County principal planner. “The county and the city filed a formal complaint to push the ECMC.”

Prospect Energy operates mainly low-producing wells — 49 in Larimer County and 10 in Fort Collins — and several tank batteries for collecting produced water and oil. The wells date as far back as 1928.

“We have an old, outdated oil field that has seen the end of its life, and I am sure it is hard for owners to let go because they still make a little money,” Lafferty said.

Still, the passage in 2019 of Senate Bill 181, which made protection of public health, safety and welfare as well as the environment the priority in regulating oil and gas operations, has put pressure on small operators and low-producing fields, Lafferty said.

For example, Lafferty said, in 2020 the state adopted rules severely limiting flaring, the practice of burning off gas from oil and gas wells, and it created another violation for Prospect Energy.

“Once that ball started rolling on Prospect Energy, it was clear it didn’t have the resources,” Lafferty said. “Everyone is starting to take action. The snowball got pretty big.”

“This isn’t an oil and gas thing,” Lafferty said “It is a health and safety issue.”

Andrew Klooster, the Colorado field advocate for the environmental group Earthworks, first documented emissions from Prospect Energy, using an infrared FLIR camera, in 2021. Klooster said exasperated residents had contacted his group.

“People were complaining of odors, headaches, nausea,” Klooster said. “Krause tanks had holes in them because they were so old and decrepit,” he said, adding that even when they were replaced, emissions from hatches continued.

“An operator that was not interested in complying”

Klooster said over the years he has made 29 visits to Prospect Energy facilities finding repeated violations, with a big point of concern the Fort Collins Meyer tank battery, where in recent years the Hearthfire development — with homes going for $1 million or more — has been built.

“The refrain the county has been hearing from us and the community is that this was an operator that was not interested in complying with the air quality regulations,” Klooster said.

Meanwhile, ECMC inspectors were also logging a string of problems and began issuing violation notices in 2020. The company racked up 14 penalties adding up to $1.7 million.

Prospect Energy provided the ECMC staff with financial documents showing that it could not pay the fines, Caitlin Stafford, a senior assistant attorney general representing ECMC staff, told the commission.

Commissioner Trisha Oeth said she was “unhappy” with the company completely avoiding paying a fine. Stafford said it is the “hope the operator puts whatever remaining money they have to put the last bit of compliance.”

“It’s not the best outcome,” ECMC Chairman Jeff Robbins said, “but the only likely outcome.”

Prospect Energy still faces the air pollution fines. Under an agreement with the state air pollution division, the company was going to pay in installments, but failed to pay starting in March, according to Zachary Aedo, an agency spokesperson.

“On Tuesday, Aug. 13, the Colorado Attorney General’s Office filed a lawsuit on behalf of the division seeking compliance from Prospect Energy and its manager Ward Giltner with the terms of the enforcement agreement,” Aedo said in an email.

Under the terms of a separate agreement reached with Larimer County and Fort Collins, Prospect Energy will shut in all its wells and then hire an independent inspector, approved by the local governments, to check that none are leaking.

Any leaking wells will be repaired within 21 days. In addition, the company will remediate a flowline spill in the Country Club Reserve neighborhood east of the Fort Collins Meyer tank battery, and remove the surface equipment there and from the Krause facility to the north within 90 days.

Lafferty said that Prospect Energy hopes to recoup some money by selling off the equipment. He also said that the county’s inspector will participate in the third-party inspection of the shut-in wells.

“It has been a saga,” Klooster said. “Prospect gets out of paying some fines, but for the residents it is worth it for the peace of mind it will bring.”

After years of harsh critiques from environmental groups and departing co-op members over its slow pace of change, Tri-State Generation is now winning praise for plugging in and planning a host of solar and wind farms to replace dirty coal. 

The Westminster-based utility serving a million consumers through co-ops in four Western states will link to hundreds of megawatts of new solar power by the end of 2025. Its newest five-year building plan was unopposed when filed with state regulators, and wins praise from environmentalists for a wide array of new wind farms and innovative battery storage solutions. 

The big utility, meanwhile, is making it easier for disgruntled member co-ops to accelerate renewable projects they build for themselves outside the Tri-State grid, in one effort to head off more defections like those that turned United Power and Delta-Montrose Electric Association into independents. 

Tri-State is even throwing a technically advanced green wild card into its future studies, saying it will consider an innovative geothermal electricity project in Colorado while seeking “dispatchable” or always-on backup power sources. Before now, most such “dispatch” power fill-ins by other utilities included new natural gas turbines, which emit less greenhouse gas than coal but are still controversial among renewable energy advocates. 

The utility has its eye on hundreds of millions of dollars in federal Inflation Reduction Act subsidies, and if it succeeds, will be well on its way to achieving an 89% reduction in greenhouse gas emissions by 2030, ahead of state targets. The utility is also getting credit for recent agreements to spend big in supporting economic development in Western Slope communities where it is closing coal plants, which are large employers and vital money engines in small towns. 

“Tri-State should be commended for aggressively pursuing federal funding to support its plan to retire existing coal units and acquire new renewable generation and storage resources,” Clare Valentine, senior policy advisor at the renewable resources nonprofit Western Resource Advocates, said, “all in a way that maintains reliability and delivers climate and economic benefits to member cooperatives and communities.” 

Tri-State’s resource plan for how it will generate power from 2026 to 2031 was filed as an unopposed “settlement” with the Colorado Public Utilities Commission, giving it every chance at approval. Now Tri-State will start seeking bids on the projects in its resource plan, and see which ones make economic sense after lucrative federal subsidies are factored in. 

As a nonprofit co-op utility, Tri-State did not qualify for federal tax credits that can amount to hundreds of millions of dollars until a recent rule change. With the change, and the continuing drop in long-term costs to build solar and wind generation, Tri-State can build renewable replacements without blowing up prices for its co-op members, vice president of communications Lee Boughey said. 

Tri-State’s five-year resource plan filed with the PUC starts with construction of a large lithium-ion battery array in New Mexico in 2026, along with a smaller iron-air battery test in eastern Colorado. The advantage of iron-air batteries is they can hold up to 100 hours of backup power, while current battery arrays hold about four hours. Powdered iron rust is charged with generated electricity, turning it back into metallic iron. Exposed to oxygen, the iron rusts again, releasing a steady electrical current that can be sent out on the grid, all employing cheap, environmentally friendly materials. 

The five-year plan also includes a new 140 megawatt solar farm in western Colorado in 2026, and another in New Mexico in 2029. Much of the rest is wind, with five new wind farms proposed to go online between 2026 and 2031 in Wyoming and western Nebraska, eastern Colorado and New Mexico. 

Those are in addition to large solar hookups that are part of Tri-State’s current five-year plan, including 595MW of solar already online in 2024 and finishing up by late 2025. Symbolic of Tri-State’s rapid transition, Boughey said, is the new solar farm that surrounds a closed Tri-State coal-fired plant in New Mexico. 

The schedule for bringing renewable energy online will allow Tri-State to stick to its current schedule of closing coal-fired Craig Unit 1 by the end of 2025, which it co-owns with other utilities; Unit 2 in late 2028; and solely owned Unit 3 on Jan. 1, 2028. Tri-State also plans to close the large 458MW Springerville, Arizona, Unit 3 in 2031. 

The change in the mix would mean that by 2030, 70% of the co-op members’ energy mix will be from clean sources, Tri-State said. In that same year, Tri-State would have reduced greenhouse gas emissions from electrical generation by 89% from the state’s 2005 baseline, the association said. 

A controversial plan to drill up to 166 oil and gas wells near Aurora Reservoir was approved by the Colorado Energy and Carbon Management Commission on Wednesday with the caveat that the operator, Crestone Resources, electrify its operations.

The requirement to electrify the company’s drilling and production operations would cut down on air emissions and noise — two concerns raised by area residents — making the plan “much more approvable from a comprehensive cumulative impacts perspective,” ECMC Chairman Jeff Robbins said.

Crestone, which is a subsidiary of Denver-based Civitas Resources, had submitted a so-called comprehensive area plan, or CAP, for 166 wells on 32,000 acres, including the state-owned Lowry Ranch.

CAPs were added to the state regulations to allow for regional planning and better assessment, and coordination and management of cumulative impacts from large-scale drilling plans.

The Lowry Ranch plan, however, drew strong local opposition. A May commission hearing at the Arapahoe County fairgrounds drew about 300 residents, who gave more than three hours of testimony — almost all in opposition.

When Crestone received an oil and gas lease from the Colorado State Land Board for Lowry Ranch’s 26,000 acres in 2012, there were hardly any homes in the area. Now, there are an estimated 12,000 homes.

Crestone has already drilled and fracked 17 horizontal wells on the ranch and plans to drill the new wells from two existing pads and eight new ones by 2029.

A group of more than 500 residents formed Save the Aurora Reservoir. The group was granted the right to participate in the commission’s hearings as an “affected person” and hired an attorney to make a presentation and question Crestone witnesses.

Jaime Jost, Crestone’s attorney, called STAR “an activist group trying to stop oil and gas drilling in Colorado.”

STAR argued, using expert witnesses, that gaps in the plan left residents unprotected and that it did not properly calculate the cumulative impacts of all the drilling, wells, truck traffic and ongoing operations.

“We are devastated by the commission’s decision,” Marsha Goldsmith Kamin, STAR’s president, said. “This is without doubt the wrong decision for the health, safety and environment of our community.”

Despite STAR’s challenge, the commission found Crestone had substantially complied with the CAP requirements, even as commissioners expressed frustrations with gaps in the plan.

“I still do think that it does meet our rules and is approvable,” Commissioner Mike Cross said. “I hope it would be clear to the operator doing this, that minimum checking the boxes is not what we are looking for.”

Commissioner John Messner disagreed, saying that “on many fronts” the plan lacked the “commitments and evidence” to show that it avoided, mitigated or minimized potential cumulative impacts.

In July, Julie Murphy, the commission’s director, had recommended approval of the drilling plan saying it had met “all applicable requirements.”

Commissioner Brett Akerman voiced concerns about gaps in the plan. “Make no mistake about it, I do think there is an approvable CAP, if not immediately, before us nearby,” he said. Ackerman proposed sending the plan back to Crestone for more work.

Robbins, however, said that the commission could not send the plan — which substantially complied with the state and local regulations — back to Crestone unless it could give the operator detailed guidance on what additions would be required.

Akerman said that one of his concerns was that the proposed line of pad developments — even though well beyond the state’s required 2,000-foot setback — remained “very close to residences.”

The comprehensive area plans are not a final approval, Robbins said. For each well pad Crestone will have to seek approval of an oil and gas development plan, OGDP, and that would be the appropriate time to take up pad location, as well as other issues raised in the hearing, including noise mitigation, fire safety and wildlife protections.

“At this point we are feeling the ECMC is going to scrutinize every one of the OGDPs so we are not giving up,” STAR’s Goldsmith Kamin said. “We are going to keep pushing.”

The state Energy and Carbon Management Commission cut a key proposed protection for disadvantaged communities facing oil and gas drilling after a sustained pushback from the oil and gas industry, according to environmental groups participating in the rulemaking.

The commission staff Friday issued a new draft of the so-called cumulative impact rules removing a requirement that oil companies seeking to drill within 2,000 feet of homes in a disproportionately impacted community get the approval of those residents.

“The fact that so many in the industry lined up against this shows how big an issue this was and that the ECMC staff completely caved,” said Mike Freeman, an attorney with the nonprofit environmental law firm Earthjustice.

Tearing out that vital protection, which was sought by environmental groups, just a month before hearings begin gives a big advantage to the oil companies, the activists say.

 “It’s really disconcerting,” said Ean Tafoya, director of Colorado GreenLatinos. “The onus was on the companies to do the right thing. It seemed really disingenuous to the work that everybody collectively did to get to that.”

The commission said in a statement to the Sun that “given the vigorous debate on this issue in parties’ prehearing statements, staff decided to provide an alternative in this draft so that parties can provide their thoughts on one or both approaches in their responses.”

The commission said the Aug. 2 draft  includes “robust protections” for residents of Disproportionately Impacted Communities or DICs.

These include a more rigorous analysis of proposed locations near homes, schools and childcare facilities and targeted data for each location and best management practices to limit impacts.

“By requiring this information, ECMC will have a better understanding of community concerns earlier on in the permitting process,” the commission said.

“The fact remains that they removed the 2,000-foot setback requirement from the August draft,” Freeman said.

The state does have a requirement that drilling pads be set back 2,000 feet from homes, schools, child care centers and high occupancy buildings.

But an oil and gas operator can drill inside that buffer if it can show it can provide “substantially equivalent protections” as being 2,000 feet away — such as enhanced recovery systems or zero-emissions equipment — or by getting approval of the homeowners or businesses inside the buffer.

In 2023, 19 of the 71 oil and gas development plans approved by the ECMC were inside the 2,000-foot setback, according to the agency’s 2023 cumulative impacts report. In 2022, 26 drilling plans were inside the buffer.

The proposed cumulative impact rules, set for a hearing in September, initially had a requirement that approval of residents inside the setback was essential — without it, drilling could not start. 

The legislature in 2019 directed the commission to assess the cumulative impacts of oil and gas operations, with particular concern for disproportionately impacted communities —  ones that are low income, of color, have vulnerable populations or have disproportionate environmental burdens.

In an annotated version of the revised draft, the commission staff said the setback provision was cut after “robust stakeholder discussions and feedback in the parties’ prehearing statements.”

In those prehearing statements, Colorado’s top oil and gas producers and the major industry trade groups objected to the provision.

The proposed rule, Chevron Corp. said in its prehearing statement, “would essentially prohibit new oil and gas development within DICs … and should be stricken entirely.”

Chevron went on to say that other parts of the proposed rule, such as requirements for enhanced systems and state-of-the-art technologies, provide “special and robust protections” for the impacted communities. 

On the Western Slope many operating areas are designated disproportionately impacted communities not as a result of environmental issues but because they are low income communities, the West Slope Colorado Oil and Gas Association, a trade group, said.

“These lower income areas often are dependent on oil and gas revenue, particularly for schools and special districts,” the association said. “Allowing one DIC member veto power over new development harms the revenue potential for DICs as a whole and lets the voice of one negatively impact the finances of many.”

The industry arguments are “meritless,” Earthjustice’s Freeman said. “What is really going on here is the industry does not want to have a level playing field with communities so they are getting the commission to do their dirty work.”

The late overhaul of the rules in favor of oil and gas industry demands is a betrayal of a hard-fought compromise in the 2024 legislature, the environmental groups say. Activist groups threatening even more restrictive statewide ballot votes or legislative bills — such as outright bans on new fracking wells, or a mandatory summer “pause” for drilling operations during the worst of the ozone season — agreed to drop their efforts. In exchange, the legislature passed bills capping nitrogen oxide emissions and boosting closures of low-producing oil wells. Greeng groups also got a new per-barrel fee on oil and gas production to be used for transit projects and other pollution reduction. The oil and gas industry said at the time it was giving up its own ballot measures defending natural gas-fueled home appliances. 

While navigating those compromises, both sides were participating in the yearslong rulemaking at the ECMC on cumulative impacts and protections for disproportionately impacted communities. Environmental groups wanted more community protections in part because they’d given up ground in the spring’s “grand compromise.” 

“Environmental justice should require consent,” said Rebecca Curry, policy counsel in the Colorado office of Earthjustice. “They just totally took it out of the rules.” 

The September rulemaking hearings will come at the end of a particularly brutal ozone season. There have been 42 state-issued ozone action alerts so far in 2024, with extremely high temperatures cooking oil and gas and transportation fumes into a stew toxic for human lungs. Distant and Front Range wildfires worsened the ozone and particulate pollution with steady plumes of smoke over the metro area. 

Colorado’s Northern Front Range counties are under an EPA mandate to bring ozone under the 2015 70 parts per billion cap within the next few years, or face more sanctions. Metro area gas stations are already required to sell slightly more expensive reformulated gasoline that is less volatile and creates fewer ozone emissions. Regional Air Quality monitors show the Front Range has violated those EPA standards numerous times already in 2024.

Arapahoe County residents who live near Aurora Reservoir on Tuesday won the right to intervene in state hearings and challenge a plan to drill 166 oil and gas wells on the nearby, state-owned Lowry Ranch.

The Colorado Energy and Carbon Management Commission unanimously voted to permit Save the Aurora Reservoir, a grass-roots group, to participate in the hearing over the objections of the oil and gas operator Crestone Peak Resources.

The ECMC granted “affected person” status to the group. It is the first time the commission has granted that status to residents in an approval hearing for an oil and gas comprehensive area plan or CAP.

The affected-person status is primarily for people living within 2,000-foot state setback for drilling operations or those demonstrating a unique impact from the proposed oil and gas  operation.

“I believe courts look at standing more from the perspective to allow standing if there are allegations of injury,” ECMC Chairman Jeff Robbins said. “I would allow STAR.” The three other commissioners agreed.

In its petition, 12 STAR families outline their concerns about the impacts of the proposed oil and gas plan on air quality, the use of the reservoir and surrounding area for recreation and their children who go to school within the drilling area.

“A list of concerns does not equal standing,” Jamie Jost, an attorney for Crestone, told the commission. “None of the listed STAR members is within 2,000 feet. … None of them are even within 3,000 feet.”

Mike Foote, STAR’s attorney, said that the petitioners all live and recreate in the area, with some having children and jobs in the CAP.

“There is something that is not right about it,” Foote said, referring to the CAP. “It is not protective.”

Crestone Resources, a subsidiary of Denver-based Civitas Resources, one of state’s largest oil and gas producers, is proposing a comprehensive area plan to drill up to 166 horizontal wells on 32,000 acres of state and private land.

The CAPs were added to the commission’s revised rules as a way to better assess, coordinate and manage the cumulative impacts of large-scale drilling plans.

As part of the Lowry Ranch CAP, Crestone has committed to using a suite of “best management practices” to reduce emission and wastes and lessen impacts on the surrounding areas.

Julie Murphy, the ECMC director, has recommended that the commission approve the CAP.

About 26,000 acres of the 32,000 acres in the Crestone CAP are state holdings overseen by the Colorado State Land Board.

In a presentation to the commission, Christel Koranda, the land board’s minerals director, said that Lowry Ranch was the single biggest generator of revenues among the board’s holdings having already yielded more than $200 million in payments and is projected to provide another $300 million in the coming years.

There are more than a dozen different leases on the ranch already including ones for agriculture, solar energy and oil and gas drilling. Crestone already operates 17 wells on the ranch and has paid $73 million in royalties and $137 million in bonuses, according to the land board.

The hearing, which began Tuesday, is scheduled to conclude during a second session on Friday.

Residents around Aurora Reservoir who are fighting a large-scale oil and gas drilling operation are trying to use an untested maneuver — seeking to be declared “affected persons” — to get their voices heard by state regulators.

The affected-person designation is mainly for people living within 2,000 feet of a drilling operation or those demonstrating a unique impact from the oil and gas development.

But members of the grassroots group Save the Aurora Reservoir, or STAR, in their petition to the Colorado Energy and Carbon Management Commission argued that the health, wildlife and traffic impacts extend beyond 2,000 feet. STAR has 330 members.

The ECMC is scheduled to hold a day-long hearing Tuesday and rule on Crestone Peak Resources’ proposed Lowry Ranch Comprehensive Area Plan, which would drill up to 166 wells from nine pads on 32,000 acres straddling Arapahoe County and the city of Aurora.

The comprehensive area development plans, or CAPs, were added to the commission’s revised rules as a mechanism to better assess, coordinate and manage the cumulative impacts of drilling. 

In 2022, the ECMC, formerly the Colorado Oil and Gas Conservation Commission, approved a Crestone Peak CAP for 151 wells on 20 pads in a 55-square-mile area in Aurora.

The commission at the start of the Crestone hearing will decide whether STAR’s petition meets Rule 507, the state regulation defining affected persons.

Public commenters before the commission are limited to three minutes. If STAR’s petition is successful the group could get three hours to make a presentation, cross-examine Crestone witnesses and offer a rebuttal closing argument.

Birders, hunters, cyclists, dog walkers all could have legal standing

Crestone, a subsidiary of Denver-based Civitas Resources, one of the state’s largest oil and gas producers, is opposing STAR’s petition. “STAR failed to comply with the requirement of Rule 507 and has provided zero legal position for its request as an association with standing,” the company said in a filing.

Mike Foote, STAR’s attorney, said that commission has more broadly drawn the circle for affected persons, noting that the commission said a hunter or a birder concerned about preserving deer or birds in an area slated for drilling could have standing.

“A mountain biker may have a unique interest in avoiding surface disturbance in an area of public lands where she frequently bikes,” the commission said in the statement of purpose for its rules.

The 12 STAR families, petitioning the ECMC, bike, jog, and walk their dogs around the reservoir and through parts of the CAP. Some swim and boat on the reservoir and others work or have children going to school within the drilling area.

The home of Jason and Shannon Randels,  according to the petition, is 3,500 feet from one of the proposed drill sites.

“The Randels chose their lot on South White Crow Way specifically for its proximity to the reservoir, the wildlife, the views, and the peacefulness of the surrounding area,” the petition said. “They were not aware of looming oil and gas development at that time.”

The battle lines between STAR and Crestone are between the operator’s efforts to show it has reached out to the community and to limit the impacts of its drilling plan and the grassroots group’s stance that under any circumstances there will be widespread impacts on hundreds of homes. 

Drilling beneath the Lowry Landfill Superfund site has been removed from the plan

In its prehearing statement, Crestone noted that after consultations it has removed two sites and trimmed 1,440 acres from the plan. After the U.S. Environmental Protection Agency voiced concerns, the company agreed not to drill beneath the Lowry Landfill Superfund site.

It has also increased the setbacks for five pads, in one case adding 2,356 feet to the buffer, bringing it to nearly 4,500 feet.

Crestone already operates 17 horizontal oil and gas wells from six drilling pads in the CAP and two of the nine drilling pads it proposes to use already exist. The drilling would begin in this year and last until 2028. Production from the wells could last 25 years.

The company has also committed to a series of so-called best management practices to reduce the impacts. These include: continuous air monitoring, the use of pipelines to transport oil and gas from the sites (cutting down on truck traffic), and using cleaner burning engines.

Crestone said in a filing it is also working to electrify its drilling and production activities but cautioned that “electrical connections are dependent on Xcel Energy’s capacity, load and timing.”

“Crestone anticipates electrification during the production phase with a high degree of certainty, lower certainty for drilling phase,” the company said.

“We’re known as an early adopter of new technologies and innovative practice,” Richard Coolidge, a Civitas spokesman said in an email. “ We’re always exploring opportunities to recycle and reuse produced water and remain committed to finding solutions that will work for the unique challenges in our state’s geology.”

Coolidge said the Civitas will also have to meet the regulations adopted by Arapahoe County last November, which include a 3,000 setback from existing or planned reservoirs and a 3,000-foot buffer from homes and buildings, platted lots and water bodies.

The regulations also require air and water testing and groundwater and surface water quality plans.

In a cumulative impacts analysis submitted to the ECMC, Crestone’s consultant concluded that “the maximum annual emissions during production operations for each facility identified in the CAP are not expected to exceed the current major stationary source thresholds” for pollutants under state and federal regulations.

The ECMC director Julie Murphy has recommended the commission approve the CAP.

STAR in its planned presentation and filings disputes many of Crestone’s claims. It notes that the impact of truck traffic was never adequately assessed and that while pipelines would be used for products, produced water, which comes up from a well with the oil and gas, would be trucked away.

For 155 wells each producing 20 million gallons of produced water, that added up to 310,000 truck trips through the CAP, STAR said.

 And while air emissions may not exceed regulatory thresholds, in 2025 the operations would put about 1,800 tons of ozone-causing pollutants into the air plus 54,000 tons of carbon dioxide, the prime greenhouse gas, according to Crestone’s consultant.

“It is widely understood that living near oil and gas development can cause negative health outcomes,” the STAR petition said. “Increases in ozone precursor chemical emissions can also lead to higher ground-level ozone levels.”

STAR also raised questions about the quality of Civitas operations saying that in the first quarter of 2024 the company paid $332,500 in enforcement action penalties to the Colorado Department of Public Health and Environment and has 10 open enforcement cases.

While Crestone agreed not to drill under the Lowry Landfill, STAR said the drilling plan could put horizontal wells under people’s homes. “The densely populated neighborhoods of Aurora and Aurora Reservoir deserve at least as much protection as a Superfund landfill,” the STAR presentation said.

Colorado agencies were awarded $328 million in grants by the federal Environmental Protection Agency to launch a host of programs to cut greenhouse gas emissions from homes, commercial buildings, landfills, mines and the transportation sector.

The Denver Regional Council of Governments will receive $199.7 million and the Colorado Energy Office was granted $129 million.

“Our guiding mission is ensuring all people in Colorado have clean air to breathe, clean water to drink, and the opportunity to live healthy lives. These grants — unprecedented in their funding — bring us and Coloradans closer to achieving these goals,” EPA Regional Administrator KC Becker said in a statement.

Colorado has a statutory goal and a roadmap to reduce greenhouse gas emissions by 50% in 2030 and 90% by 2050 compared to 2005 levels.

Becker, who served as speaker of the state House of Representatives, was the prime sponsor of the 2019 legislation mandating the greenhouse gas reductions.

The Colorado Energy Office programs will seek to reduce emissions from landfills, coal mines, and large commercial buildings and transportation.

One key element will be to deploy advanced methane monitoring to improve emission regulations for coal mines and landfills. Some of the money will be used for a competitive grant program to help large commercial buildings cut emissions and some will go to local government initiatives.

“Local and Tribal government actions are crucial to this effort, and this funding will ensure that they can adopt and implement key policies to help us achieve net-zero emissions by 2050,” Will Toor, executive director of the Colora Energy Office, said in a statement.

“This money will also help large building owners reduce their energy usage and associated emissions,” Toor said.

Between 2025 and 2030 the state energy office programs are projected to cut the equivalent of 4.2 metric tons of carbon dioxide — the main greenhouse gas and a total reduction of 25 tons by 2050.

DRCOG’s “Zero Emission Building Initiative” will focus on, according to the council’s grant application, “residential and commercial building sectors and increase energy and resource efficiency, with an emphasis on low-income and disadvantaged communities. “

The program will provide free home retrofits and upgrade services for low-income and disadvantaged populations and free energy advising to residential, multifamily and commercial building owners.

It will also offer rebates and incentives to accelerate the adoption of energy efficiency and electrification measures, and create a building policy collaborative to advance ambitious building policies at the local level.

Among the initiative’s goals are electrifying weatherproofing more than Front Range 60,000 buildings and addressing workforce gaps by providing job training for 3,800 new workers and upgrading skills for 1,000 existing workers.

The program is projected to cut the equivalent of 6.9 million tons of carbon dioxide between 2025 and 2030 and a total of 148.2 million metric tons by 2050,

“This federal grant will enable us to take bold, visionary steps to reduce climate pollution and protect the health and well-being of our residents,” Jeff Baker, an Arapahoe County commissioner and DRCOG board chairman, said in a statement.

The Colorado awards were among 25 awards totaling $4.3 billion the EPA made through its Climate Pollution Reduction Grants program, which was created under the Inflation Reduction Act.

The largest single grant — $450 million — was made to a coalition of five New England states for a “heat pump accelerator” to put heat pumps in 500,000 single- and multi-family residences in Connecticut, Massachusetts, Rhode Island, New Hampshire and Maine. 

The price tag on Xcel Energy’s $12 billion Clean Energy Plan — which is facing supply chain problems and uncertainty over tariffs — may have to rise, the company said in a Colorado Public Utilities Commission filing.

The utility asked the PUC for a 75-day delay in submitting a key solicitation for a clean energy project to “address material changes” in projects included in its state-mandated Clean Energy Plan.

The commissioners granted the extension, but voiced concerns over what the delay portends.

“It looks like they are contemplating price and cost increases, which causes me a lot of concern,” PUC Chairman Eric Blank said. “I am really nervous about what is going on here. … This filing causes me a lot of angst.”

While it is not clear how much costs could increase, a 10% rise would lead to customers paying an added $1.2 billion in rates, Joseph Pereira, deputy director of the Colorado Office of Utility Consumer Advocate, said in an interview.

“This is another example of a long, long string where the company takes a bid or proposes something and then we see massive cost overruns,” Pereira said. The UCA represents residential and small commercial customers at the PUC.

Xcel Energy, in a statement to The Colorado Sun, said it is working with developers of utility-scale solar projects to determine if project bidders need to increase their prices or change their proposed operating dates.

“We are doing everything possible to minimize project costs for customers while working with stakeholders to shorten delays to meet our clean energy goals,” the company said.

Under a 2023 state law, utilities have to create a clean energy plan that shows how they will cut their greenhouse gas emissions 80% from 2005 levels by 2030.

Xcel Energy submitted a $15 billion plan in December 2023, proposing 7,100 megawatts of new generation and storage, to achieve its targets. That plan was almost double in cost of the one the utility initially proposed in 2021.

The PUC, concerned about the price and whether the utility could manage all the projects in it, trimmed the proposal, approving  a $12 billion plan witn 5,800 megawatts of new resources.

“The imperative to decarbonization is an excuse for any costs,” Pereira said. “We have to say you must decarbonize affordably.”

In its request for the added time, Xcel Energy cited supply chain problems, an April petition by U.S. solar manufacturers to extend tariffs to Southeast Asian solar cell makers and a May directive from the Biden administration to increase tariffs on China.

“We’re experiencing both delays and cost challenges implementing the approved Clean Energy Plan portfolio,” Xcel Energy said.

“Global supply chain issues are delaying the delivery of critical equipment like transformers, high demand for construction labor is driving up the project’s costs and two recent trade actions by the U.S. International Trade Commission have impacted the development of new solar and storage projects,” the company said.

This isn’t just an Xcel problem

The U.S. is facing an unprecedented shortage of transformers with delivery wait times of up to two years, according to a study by the National Renewable Energy Laboratory.

“Utilities needing to add or replace them are currently facing high prices and long wait times due to supply chain shortages,” Killian McKenna, a NREL researcher, said in a statement. “This has the potential to affect energy accessibility, reliability, affordability — everything.”

Another concern is the repeated delays in moving ahead with the Clean Energy Plan and  impact that is having on prices and contracts, according to the Colorado Solar and Storage Association, or COSSA, a trade group.

Xcel Energy requested three delays in submitting the plan, filing it 80 days beyond the initial deadline, according to a PUC filing, and Wednesday was granted another 75-day delay.

“While COSSA has taken no position on this specific request, the longer these filings are delayed, the more risk this places on solar developers who are required to hold their prices,” Mike Kruger, the association’s CEO. “It is unfair to continue to put risk on solar developers when it appears the issue is with Xcel.”

Commissioner Megan Gilman also expressed concerns about the risk of a delay. “It seems to be a somewhat reasonable extension,” she said, “but I also worry that past that extension we will not get ourselves in trouble with timing” in executing the clean energy plan.

Xcel Energy has dragged its feet in setting up a state mandated program to connect home solar arrays and should be ordered to get the program moving, according to a complaint filed with the Colorado Public Utilities Commission.

The complaint by industry and state agencies outlines a three-year battle to get Xcel Energy’s subsidiary, Public Service Company of Colorado, the state’s electricity provider, to file a solar tariff, a document that sets out fees, deadlines and interconnection procedures and a connection timeline.

“Unfortunately, this regulatory delay continues, and it continues to the benefit of Public Service and the detriment of interconnection customers,” the complaint said.

The complaint was filed July 2 and a day later Xcel Energy circulated a draft tariff among parties, including the complainants. The tariff, the company said, is slated to be filed Friday.

In a settlement – that included groups and agencies filing the complaint — Xcel agreed more than eight months ago to file the tariff and timeline.

“We believe we have followed the intent of the settlement agreement and the orders of the Public Utilities Commission on implementing and tracking customers’ requests to interconnect distributed energy,” Xcel Energy said in a statement.

The complaint — by the Colorado Solar and Storage Association, a trade group, the Colorado Office of Utility Consumer Advocate, the Colorado Energy Office and the PUC’s staff — asked the commission to order Xcel Energy to file the tariff this week.

“Customers on Public Service’s system who would like to interconnect solar and storage resources have been plagued by interconnection delays,” the complaint said. “Public Service has exacerbated those delays through its inaction and its failure to adopt interconnection timelines in tariff as required by Commission rule.”

In February, Xcel Energy told the PUC, in a filing, that it would clear up a 4,000-application backlog by mid-March. 

Some of the delay, the company said, had been caused by incomplete connection applications from developers and homeowners.

Reasons for rejecting applications are “trivial”

However, Mike Kruger, Colorado Solar and Storage Association CEO, said in a PUC filing last fall that “applications are being rejected during the Completeness Review step for trivial reasons, including customer middle initials missing, inversion of numbers in a customer address, or using short-hand in line drawings submitted for engineering review.”

In 2024, Xcel Energy said it has achieved a 99% record of hitting connection timing milestones for thousands of interconnection requests.

There is no independent record of those interconnections. “There is no guarantee that the company is tracking appropriate records of interconnection delays since the interconnection tariff is not yet in effect,” the complaint said.

The PUC adopted interconnection rules in 2021, but it took a commission order in February 2023 to get Xcel Energy to file a tariff sheet and an installation timeline. The company, however, did not file all the required material.

In October 2023, Xcel Energy agreed to a settlement — which included the groups filing the complaint — on a plan to implement tariffs, timelines and refunds for tardy installations. The settlement still hasn’t been implemented.

“Regulation only works when companies comply with commission orders and rules,” said Joseph Pereira, deputy director of UCA. “The company has basically ignored the order.” The UCA represents residential and small commercial customers in PUC proceedings.

When concerns were raised with Xcel Energy before the complaint was filed, Pereira said “we were told they were having computer issues and tracking issues and that’s what is creating the inability to meet the order.”

“Either they are antisolar or they have operational issues affecting customers. Either way customers are burdened and they need to comply with the order,” Pereira said.

Under the settlement agreement Xcel must have a way to refund the fee homeowners pay upfront if the utility doesn’t connect the solar array within a set time.

For example, in an example included in the settlement if the company has 50 days to connect an array and it takess 70 days $204.88 of a $250 fee would be refunded. If the installation took 251 days the refund would be $268. The refund program has not yet been implemented.

The tariff to be filed Friday will have a refund mechanism and performance incentives to encourage the company to meet the installation timelines. 

The complaint asks the commission to direct Xcel Energy to issue refunds to all customers who experienced interconnection delays since Feb. 1 of this year.In response to customer complaints about installation delays, the legislature in 2023 passed a bill that also gave the PUC the power to fine Xcel Energy $2,000 a day for interconnection delays.