The Colorado Public Utilities Commission gave Xcel Energy permission to spend at least $2 billion to build up to 650 miles of new high-voltage power lines in southern and eastern Colorado to serve windmills and solar farms.

The company’s customers will pay for the new transmission lines through what’s called the Transmission Cost Adjustment rider as components of the project are put into service, according to the company.

It’s not immediately clear how much of a rate increase an average residential or commercial customer will see or when the charges might be imposed. When Xcel sought a $26 million adjustment a few years back, the company said it would result in a typical residential customer’s bill increasing by 48 cents per month, and for a typical commercial customer, 63 cents per month.

Xcel says the project will provide a “backbone network transmission system in eastern Colorado” that would significantly improve the reliability of the state’s transmission system, as well as provide transmission capacity for 3,000 to 3,500 MW of new electric generation.

Colorado’s biggest utility company said it would need to add 2,300 MW of utility-scale wind turbines, 1,600 MW of utility-scale solar and 400 MW of storage to meet Gov. Jared Polis’ goal of 100% renewable energy by 2050 and reach 80% carbon dioxide emissions from 2005 levels by 2030, as outlined in Senate Bill 19-237.

“We are thrilled to be able to move forward with an important project that will deliver renewable, clean energy to the most populated areas of the state while supporting our rural communities,” said Robert Kenney, president of Xcel Energy-Colorado, referring to the company’s Power Pathway project. “This project will help us continue on our path to reducing carbon emissions in Colorado more than 85% by 2030, deliver low-cost, renewable energy, and improve the grid’s resilience and reliability.”

Xcel designated five Energy Resource Zones in eastern and southern Colorado, where the company says there are significant wind and solar resources that have not been developed.

Bringing power from renewable sites without the Power Pathway project would force owners of those resources to build “long, costly and unreliable” power lines to connect geographically widespread generating sources to the existing transmission network, Xcel said.

The approval of the Power Pathway will “unlock clean energy resources,” the company said.

The PUC agreed with Xcel that the new line would save ratepayers money in the long run.

Xcel is reversing the customary practice of applying for new power lines after requests for new generating plants have been approved. The project, the company said, is needed before the renewable energy generation has been approved by the PUC because new generation sources could be ready to input power before the electrical grid is completed.

The company also argued that getting the project underway can potentially save as much as $400 million in costs to ratepayers by allowing wind and solar developers to take advantage of investment tax credits before they expire in 2023.

Xcel said load demand forecasting shows that the existing system is “full,” and it can no longer reliably serve new generation sources.

The PUC had expressed concerns about the phased approach and how cost overruns would be handled.

“While we grant a CPCN for the Pathway Project, we are keenly aware that ratepayers will be impacted by the substantial costs associated with the project and we are reminded of our statutory duty to ensure safe and reliable utility service at just and reasonable rates,” the PUC said in its decision.

The commissioners also said the risks of cost overruns must be appropriately balanced between ratepayers and shareholders.

“The Settlement Agreement … in a worst-case scenario, would require the company to bear less than 9 percent of the added cost, equating to less than 18 percent of the additional return ratepayers would pay to the company on the cost overrun,” the decision said.

Michelle Aguayo, a spokeswoman for Xcel, said the company will begin filing permits with counties this month, while continuing to work on route development for the new transmission infrastructure with local landowners, officials and others in areas where the proposed transmission line route hasn’t been determined yet.”

The system is projected to be completed by the end of 2027.