06-02-2025 JDA Agenda Packet - Laserfiche WebLink

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XCEL ENERGY WORD DOCUMENT TITLE 6 © 2024 Xcel Energy Inc. (2) TENs are the most efficient heating and cooling technology currently available. Besides the efficiency gain of pulling heat out the ground instead of the ambient air, these systems share a significant amount of heating and cooling energy between different building types connected to the loop. Because facilities connected to the loop are both consumers and producers of thermal energy, different building types help fill the energy need of another. The larger and more diverse the connected building stock is, the more efficient the system becomes. (3) TENs may save customers money on fuel costs while also protecting them from a volatile natural gas market. A typical residential natural gas bill is comprised of roughly 40% infrastructure costs (i.e. pipes), and 60% natural gas fuel costs (market commodity costs). By investing in infrastructure that offsets the need to burn fuel, the utility can increase one p ortion of the bill while simultaneously decreasing another, ideally resulting in a net neutral or decrease in costs. And while infrastructure costs have a lasting impact, fuel costs do not. Fuel is required year-over-year, season-over-season. (4) TENs take advantage of the natural gas utility, which may keep future natural gas rates lower for everyone. In our current state, infrastructure costs associated with the natural gas utility (i.e. pipes) are recovered through natural gas rates – the less natural gas our customers consume, the less infrastructure costs are recovered. As throughput of the natural gas system decreases over time, natural gas rates would need to increase to recover infrastructure costs. TENs utilize a separate network of pipes than our natural gas network, but they share the same core competencies (location in right of ways, installation, operation, and maintenance). In the future, these systems may be installed as an alternative option within our natural gas utility. Because TENs don’t rely on fuel, 100% of the fees associated with the service will be used to recover infrastructure costs. As TEN system(s) grow, installation costs and infrastructure recovery can be spread over the entire gas utility, leveraging economies of scale, and potentially keeping future rates lower for everyone. Additionally, TENs supply energy for cooling as well as heating, so infrastructure recovery will occur all year long, instead of only during the heating season.