Xcel Energy Plan Would Close Coal Units, Add Renewables

Xcel Energy on August 29 said it wants to retire 660 MW of coal-fired generation capacity as part of a “Colorado Energy Plan” that also includes adding as much as 1,700 MW of renewable energy and 700 MW of natural gas-fired power generation to its portfolio in the state. A key element of the proposal that Xcel and a coalition of business, environmental, and labor groups will present to state regulators includes closure of two units at the Comanche Generating Station in Pueblo.

The 325-MW Unit 1, which came online in 1973, would be shuttered by year-end 2022. The 335-MW Unit 2, online in 1975, would close by year-end 2025, in each case at least a decade ahead of the units’ scheduled retirements. The 750-MW Unit 3 at Comanche, opened in 2010, will remain online. The proposal would amend the utility’s current 2016 Electric Resource Plan, which details how Colorado’s largest power provider would produce electricity over the next several years.

“We have a responsibility to meet our customers’ energy needs,” said David Eves, president of Xcel Energy – Colorado, in a conference call with media. “Our customers expect us to provide low-cost power and increase the use of cleaner energy. As the state’s largest utility, it is important that we also support rural areas in Colorado, and this proposal’s investment will accomplish this goal.” Eves said the plan wants to increase Xcel’s renewable energy generation to 55% of its portfolio by 2026, while reducing carbon and other emissions. He said Xcel’s investment in the new energy sources could reach $2.5 billion, much of it targeted toward rural areas of the state.

Xcel has said it wants to reduce its carbon dioxide (CO2) emissions in Colorado by 60% by 2026 compared to 2005 levels. The proposal discussed in the conference call includes construction of a new switching station for a southern Colorado transmission “energy resource zone,” designed to foster more development of renewable energy generation in rural Colorado.

The announcement comes almost one year after the state’s second-largest utility, Tri-State Generation and Transmission Association, said state regulators supported its plan to shutter 527 MW of coal-fired capacity at two of its power plants in western Colorado by 2025.

Xcel said it would issue an all-source request for proposal (RFP) as part of Phase II of its 2016 Electric Resource Plan, which includes the additional wind, solar, and natural gas and/or storage generation. Xcel said the RFP includes no additional coal resources. The utility said it would issue the all-source RFP soon, and expects to file a recommended portfolio with the Colorado Public Utilities Commission (CPUC) in the first quarter of 2018. A CPUC decision on the recommended portfolio is expected in mid-2018.

The plan also calls for Xcel to reduce the renewable energy surcharge on its customers’ monthly bills to 1% of the bill, down from the maximum 2% allowed by state law. That reduction would take place in 2021 or 2022.

Xcel earlier this year announced a plan to add about 1,550 MW of wind power in the Midwest.

Xcel has shuttered almost 1,100 MW of coal-fired generation at its plants in the Denver area to meet the state’s clean air standards established in 2010. It has replaced that generation with natural gas, wind and solar generation. The utility last year got about 46% of its power from coal, with 29% from renewables and 25% from natural gas. Under the amended plan, by 2026 renewables could make up 55% of Xcel’s portfolio in Colorado, with coal at 23% and natural gas at 22%, the utility said.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine)