On July 29, 2025, Sierra Club joined a settlement submitted to the Colorado Public Utilities Commission that would approve a $48.7 million non-pipe alternative (“NPA”) project on Xcel Energy’s system—the largest NPA ever proposed in the United States.
Xcel’s Mountain Energy Project will meet gas demand growth in a mountain portion of its gas system that includes Breckenridge, Keystone, and surrounding areas. A key element of the Project is an NPA portfolio that will avoid additional gas demand by electrifying buildings, rather than meet the demand by adding more costly, polluting gas infrastructure. However, Xcel also proposed to supplement the NPA portfolio with some gas equipment, including compressed natural gas (“CNG”) and liquefied natural gas (“LNG”). Sierra Club intervened in the PUC proceeding on Xcel’s application to advocate for urgent, effective implementation of the NPA portfolio and to minimize the project’s reliance on supplemental CNG and LNG.
After Sierra Club and other parties submitted testimony in the proceeding, most of the parties reached a settlement that would approve the Project and advance Sierra Club’s priorities. The settlement directs Xcel to start implementing the NPA portfolio immediately, broadens the range of electrification projects included in the portfolio, and establishes a working group to facilitate community engagement and support effective NPA implementation. It also directs Xcel to propose a pilot electric rate by 2026 aimed at reducing energy costs for residential customers who use heat pumps. This pilot will support NPA adoption in the Mountain Energy Project area and electrification across Xcel’s system. The settlement also substantially reduces Xcel’s reliance on LNG, from the originally-proposed 8 LNG tanks to 5, and puts guardrails on continuing or expanding the use of supplemental gas supply in the future. Finally, the settlement directs Xcel to return to the PUC in 2028 to decide the Project’s long-term path forward, based on NPA progress to that date and updated analysis of the need for supplemental gas supply based on the latest PUC guidance. Sierra Club will participate in those future proceedings to continue advocating for electrification and against unnecessary gas investments.
The PUC held an evidentiary hearing from August 12-14, and is expected to decide whether to approve the settlement later this year.