Leading Through Energy Affordability | The Room Where Billion-Dollar Decisions Get Made - Colorado PUC Chair Eric Blank (S5:E4)

Just Power Podcast: Leading Through Energy Affordability Series The Room Where Billion-Dollar Decisions Get Made - A Conversation with Colorado PUC Chair Eric Blank (S5:E4) Carolyn Parrs There is a room that most people never think about. No cameras, no headlines, no viral moments. But the decisions that are made inside of that room will determine how we manage the most expensive grid transformation of our time. And that room belongs to your state’s Public Utilities Commission.

Hi, I’m Carolyn Parrs and welcome to our series on Leading Through Energy Affordability on Just Power. My guest today is a person that sits in that room. Eric Blank is the Chair of the Colorado Public Utilities Commission, and he helps shape how billion-dollar investments get structured, who pays for them, and on what terms. So today we’re going to talk about what it takes to make those decisions when investment pressure is accelerating, when low and even moderate income folks are feeling stretched, and also when the path forward is not clear.

So welcome, Eric. Eric Blank - CO PUC Thanks for having me. It’s a pleasure to be here and I’m looking forward to the conversation. Thank you.

Carolyn Parrs All right, thank you for showing up. Okay, so we’ll jump right in. Across the country, regulators are all confronting a new wave of investment - grid modernization, electrification, and growing demand from data centers. In your conversations with other regulators, what feels fundamentally different about the affordability challenges of this moment?

Eric Blank - CO PUC Well, great question. Let me just quickly introduce myself again. Eric Blank. I’m a lawyer and economist.

I was appointed by Governor Polis in January 2021 to the Colorado PUC as Chair. I was reappointed in January 2025 to another four-year term. Before that, I spent almost 20 years running a pioneering national renewable energy company that I co-owned and co-founded. At one point, we had developed the largest operating solar facilities in the Midwest, in the Eastern United States, Georgia, and Colorado.

So I’m going to bring a little bit of a developer background to the regulatory conversation. And I’m going to answer this question by starting out first in Colorado. Over the last 15 years, Colorado has experienced maybe 0.3% growth in retail sales, at least for Xcel Colorado, the largest utility.

So 0.3% from 2010 through 2025. We’re now seeing forecasts from the utility suggesting that in the low case, growth could be 4% to a base case that could be 8% - an increase in sales of anywhere between 10 and 25 times greater than what we’ve seen over the last 15 years. About 70% of that is large new loads.

About 70% of that is data centers. Most of the rest is modest customer growth that’s largely offset by efficiency gains and EVs and beneficial electrification of buildings. So significant growth. To meet that growth, we’re seeing capital budgets over the next five years of over $20 billion, 2025 to 2029.

To put that into context, when I got on this commission, total rate base - cumulative capital spending net of depreciation - was maybe $8 billion. Now it’s over $12 billion. Massive increases in capital. If we can get it right, if the growth pays its fair share of the costs it’s imposing on the system, it could work out great.

If it doesn’t, it could be really problematic. So major policy decisions to be made. And I’ll just conclude with one final thought from California. In California, over the last 12 to 14 years, average residential rates have tripled.

They’re now above 45 cents a kilowatt hour. Affordability is not some theoretical concern. It’s an accomplished fact that we’ve seen elsewhere. And it’s something we’re deeply concerned about and trying to manage in ways that avoid duplicating that experience.

Carolyn Parrs Okay. Wow. Which brings me to the next question about your thoughts on how to manage that significant increase in rate base without having price shocks for all consumers, especially when you’re seeing, like you said, the lack of population growth. It’s not the population - it’s really what’s happening with data centers and others.

So what would you say to that? Eric Blank - CO PUC So I think there are some tools we can use. One is trying to link capital spending to actual growth. In a prior case, we’ve not committed the full capital spending until we see signed contracts and confirmation that customers are committed to Colorado.

So that’s one tool we have. Another tool is to try and encourage investments in activities that help put downward pressure on rates. For example, Xcel was one of the leading clean energy utilities promoting a steel-for-fuel plan where they retired existing coal plants, realized fuel, capital, and O&M savings, and replaced them with at-the-time highly cost-effective investments in wind, solar, storage, peaking capacity, and transmission. In contrast, other investments such as wildfire mitigation - which are critical investments to support public policy goals but don’t put downward pressure on rates - we’ve determined as a state to securitize.

And I guess the fourth thing is what we’ve already discussed: make sure that growth pays its fair share of the cost of serving it. So four ideas: encourage investments that put downward pressure on rates, make sure growth pays its fair share, link costs and revenues in real time through binding contracts, and do what you can to make sure capital is being spent as smartly as possible. Carolyn Parrs That’s a lot - these are like the leadership solutions. And I love that the securitization tool, which was usually used for closing a coal plant, is now being explored in a whole new way.

Colorado is, I’m going to say it, a real leader here. Really creative financing tools so we don’t put the pressure on ratepayers, on the folks. Thank you for that. So - regulators have always had a balancing act, right?

Reliability, affordability, and that long-term investment you’re talking about. As the scale and speed of this transition increases, how is that balancing act evolving? What are the new tensions that weren’t visible even a decade ago? Eric Blank - CO PUC So we talked about one, which is uncertainty in the load forecast, where we’re seeing forecasts that are maybe 10 to 25 times greater than what we experienced before.

We’ve also touched on extreme weather, where we’re seeing wildfire mitigation efforts drive up costs. The Marshall Fire, as I understood it, didn’t have anything out of the ordinary on the wind side, but the dryness and moisture content in the soil was two standard deviations beyond anything we’d seen before. Similarly, some of the heat dome events - certainly in the Pacific Northwest where Portland saw 110-degree-plus days when the previous high was maybe a little over 100. Again, one or two standard deviations more than anything we’d seen before.

And if you have wildfires, it can drive down solar production by 40%. So it’s all correlated in unpredictable ways. A few more factors. One is federal policy - partly on tariffs, partly on federal tax policy for clean energy, and on permitting - that is evolving in ways that have created a lot of uncertainty.

We’ve also seen supply chain shock coming out of the pandemic, which has delayed projects and caused projects to be repriced. And finally, the deeper penetration of renewable energy. Historically, Colorado could figure out what the hottest summer day was, figure out how many people were here, figure out what peak demand was at a planning reserve margin. Now, the hottest summer day is not necessarily the riskiest day - what we call the highest loss-of-load probability.

That day is peak demand minus wind and solar. What we’re seeing in California and Texas is that the riskiest times of day are shifting. Colorado’s peak demand has typically been around 5 PM. Now we’re seeing our highest loss-of-load probability hour moving between 7 to 10 PM, because it’s after the sun sets and solar doesn’t generate.

So it’s not only a shift in time of day and season, but also a shift from a deterministic approach to a much more probabilistic framework - where you have to figure out the probability of wind, the probability of solar, the state of charge of batteries, and the reliability of aging thermal units. It’s just a much more complicated planning environment, for all those reasons: demand uncertainty, federal policy, deeper penetration of renewables, supply chain issues, and extreme weather.

Carolyn Parrs This is a new normal, right? This is where we’re at. We’re not going back to where it was before. We had 85 to 87 degrees in Boulder, Colorado in March.

When has that ever happened before? Eric Blank - CO PUC Yes - 35 to 40 degrees above the average high. The highest temperature ever experienced in March since 1895. Carolyn Parrs Wow.

Your job just got a little bit more complicated - anticipating what’s to come. A couple of episodes back we had Microsoft on and they talked about the digitalization of everything coming down the pike. Maybe that might help us a little more on forecasting. But how do you forecast what’s so unpredictable?

Eric Blank - CO PUC It’s scenario-based. It’s a shift from deterministic to probabilistic, looking at fairly wide scenarios. A few years ago, we looked at what would the world look like if Denver got up to 110 degrees - right after the storm where Denver got down to minus 15 for three days. So we’re trying to look at alternative scenarios and do a robust analysis.

Carolyn Parrs Okay, bravo. All right, let’s talk about large loads. Everyone’s talking about what’s happening with data centers and AI. How does the Commission stand on cost allocation for this transformational load growth?

Eric Blank - CO PUC We have a filing coming up in the next 10 days or two weeks, so I’m limited in what I can say about Colorado specifically. What I can say is the goal is to have these customers pay their fair share of the costs they impose on the system. What that means in practice is going to be litigated in front of us. We’ll hear from the company, we’ll hear from the parties, and - like everything else we do - we will make a decision based on the evidence in the record.

It’s a little like a court in some ways. You hear from witnesses, there’s cross-examination. I think a lot of our legitimacy comes from grounding decisions in those records. Carolyn Parrs This is yet another new path being taken right now because this hasn’t happened at this scale in the past.

It happened in Virginia back in 2018, but it’s happening across America now because of AI. Eric Blank - CO PUC Yeah. I’d say Colorado may be a little bit behind. There are 35 states with manufacturing exemptions on sales and use tax, which is a big deal for these types of customers.

Colorado is one of maybe 15 or 20 states that doesn’t have it. So in terms of the largest loads - the thousand-megawatt loads - we may be a little behind. But there’s still plenty of customers interested in Colorado. We’ll see what the record says.

Carolyn Parrs All right, so we’ll be watching this in Colorado. I’m sure other states are watching too. More on that to come. I want to ask a secondary question back to rates.

A number of states are exploring putting constraints on earnings - ROE - from their utilities. Is that an effective way to deal with rising electricity costs? Eric Blank - CO PUC Again, I’m limited in what I can say given the cases in front of us. What I said before is to view the PUC as an umpire calling balls and strikes, really trying to decide things based on evidence in the record.

We’re not going into these cases trying to mandate a limit on this or that. We’re looking at what the record says and trying to come out with a fair, reasonable, balanced outcome grounded in the record. There are various tools to try and help customers. But at the same time, Colorado needs substantial new capital investment for all the reasons we’ve discussed.

And utilities have a legal right to have an opportunity to earn a fair return on a risk-adjusted basis. I think that’s all I can say - we’re trying to be an umpire calling balls and strikes. Carolyn Parrs Okay, fair enough. So one of the central questions of this series is: what does a credible response from leaders look like when it comes to energy affordability right now?

From your perspective, what does that response look like in practice - across utilities, policymakers, commissioners? Eric Blank - CO PUC Yeah, I think it’s really data-driven, smart decision-making. A lot of what we talked about - shifting from deterministic to probabilistic analysis - is how you move forward through really unprecedented uncertainty. It’s also moving quickly when the world changes.

When the federal government restricted the length of time to get tax credits, we approved several thousand megawatts of new resources in six months - a multi-billion-dollar acquisition. Most of the credit goes to the utility and the parties and the governor’s office who led it forward. But we were prepared to move that quickly. Speed to market is critical.

And the key piece of it is data-driven decision-making based on the economics, the technology, and the underlying causes of the impacts on the system. You have to manage to the politics, but that data-driven foundation is the core of maintaining affordability. Carolyn Parrs Okay, so data, policy - but underneath all of that are the people. All of us.

Ultimately you’re making decisions that affect families, whether they can keep the lights on or not, whether they’re stressed out about their bill when it shows up in the mailbox. What has sitting in that seat taught you about what people actually need from the institutions that carry the public trust? Eric Blank - CO PUC In Colorado, we probably have something like close to 400,000 income-qualified customers under federal definitions for allocating bill assistance. Under state definitions, we probably have another 200,000 that live in disproportionately impacted communities.

For the regulated utilities, we have about 1.5 million customers. So somewhere between 40 and 50 percent of customers are struggling under either federal or state definitions - and it’s probably even higher if you start talking about energy burden as a percentage of total income. The amount of people at risk greatly exceeds the likely resources available to provide assistance.

I think the single biggest thing you can do is keep average residential rates as low as you can - consistent with all the other factors: resource adequacy, wildfire, environmental goals - because when you do what California did and triple your average residential rates, there are just too many people to help and your options are severely limited. It’s a sustained focus on rates, lots of measures - wallet share, energy burden. But all that has to be managed over time. A lot of utility investments are amortized over very long periods.

A lot of programs are opt-in, so you worry that they’re helping the people who are most sophisticated and maybe need help the least. Carolyn Parrs And many of them aren’t in the system because of all the constraints of the system - so the numbers are probably even higher. Here’s the thing though - there’s only so much the Commission can do because much of this is outside of your jurisdiction. Federal policy, market forces, legislative gaps.

How do you lead when some of the biggest levers aren’t yours to pull? Eric Blank - CO PUC I mean, you just do what you can. We have a lot of authority both under constitutional and state law. And when you see problems, you just do your best to articulate them - whether it’s to the governor’s office, the utilities, or the legislature.

There are other people who can pull on those levers. You just do the best you can, try and be honest, and lead where you can - and hopefully it makes things better than they otherwise would be. Carolyn Parrs We talk a lot about communities and connection - people who might want to interact with the Commission. Many don’t even know that they can.

What would you say is the best way to do that - in a way that would actually move the needle or have some impact? Eric Blank - CO PUC That’s one of the things that pleasantly surprised me about this job. In a lot of our cases - like the coal plant retirements - we went to Craig and Hayden and Brush and Pueblo multiple times, just to hear from people telling their stories. Compelling, personal descriptions of what’s going on in their lives.

Similarly, every major rate case, we hear from normal people. I remember being in Pueblo and one of the security guards who was there came up and talked about working four jobs trying to help his parents and his family. People who’ve lost their spouse. Kids that are sick.

The public process and the comments just make this incredibly real. Carolyn Parrs So they do affect you. Eric Blank - CO PUC Totally. I mean, there are legal standards for how you rely on evidence to make decisions.

But it’s impossible not to be influenced by how these decisions affect ordinary people. I’ve really enjoyed that communication - that ability to hear from people who care enough to come out at 7 PM on a weekday evening. Sometimes they’re with their kids. Sometimes it is the kids speaking.

Carolyn Parrs The kids show up. Okay. Well, I’m really happy to hear that. Eric, it’s the human side to this whole energy transition that is just as important to me as the data and the technology.

Eric Blank - CO PUC Right. It’s like - you retire an aging, expensive coal plant and it saves statistical lives. But there’s also the person who comes and testifies and talks about their asthma from living nearby. You’ve got to keep the lights on.

Everything’s a trade-off. Carolyn Parrs It is. So as we close - with all that you’re going through, all the changes you’ve seen, all that you’re navigating - as this transition accelerates, what would you say to the next person that sits in your chair as Commissioner? What would you tell that person?

Eric Blank - CO PUC For me, this is my retirement. And I’m doing this because my life is better doing it than not doing it. So I’d talk about the opportunity to really make positive change. I’d also talk about how long it takes to come up to speed.

I’ve been in this job over five years and really didn’t get comfortable until year two or three. One of my colleagues, Commissioner Goman, has been in the job six years. That was one thing that surprised me - how long it took to get comfortable with the process, the parties, the substance, the history. Carolyn Parrs Right, the complexity of it all.

So what I’m hearing you say is that it’s going to take a couple of years to get up to speed, a lot of things are changing, and ultimately you’re doing it to make people’s lives better. You’re leaving a legacy. Eric Blank - CO PUC That’s what’s motivating me. Carolyn Parrs Okay.

Thank you so much, Eric, for being part of our Leading Through Energy Affordability series. Eric didn’t have to sit down for this conversation with me - especially given everything that’s going on right now in Colorado. So it says something. It says something big that he did.

About what’s at stake, and about what it looks like when leaders really show up. If you want to see more of that, make sure you subscribe to Just Power so you don’t miss any part of this series of leaders who are showing up in this pivotal time. Because the energy transition isn’t happening to us - it’s happening with us. So thank you for showing up today.

Because we’re all in this together, right, Eric?