Legal & Regulatory

Xcel Will Retire Coal, Add Renewables in Latest Plan

Xcel Energy, citing “historically low” costs for wind and solar power, said it wants to double its generation from renewable sources. Colorado’s largest utility also said it will retire two coal-fired units representing 660 MW at its Comanche Generating Station in Pueblo at least 10 years ahead of schedule. The changes were outlined in a June 6 filing with state regulators, who are expected to rule on the plan later this year.

Xcel said its “Clean Energy Plan” represents an investment of $2.5 billion across eight Colorado counties. “Our recommended plan secures long-term and low-cost renewable power, stimulates economic development in rural Colorado, and substantially reduces greenhouse gas emissions – all at a savings to customers,” said Alice Jackson, president of Xcel Energy-Colorado, in a statement. Minneapolis, Minnesota-based Xcel has about 1.5 million electricity customers in Colorado. Xcel had discussed the plan last summer prior to issuing an all-source request for proposal as part of its latest Electric Resource Plan.

The filing said Xcel will increase the share of renewables in its portfolio to about 55% by 2026, up from its current 28%, saving ratepayers about $215 million due to the lower cost of wind, solar, and other renewables. Xcel said closing the coal units would reduce its carbon emissions in Colorado by 60%, though it noted the retirements will result in the loss of about 80 jobs. The utility said some of the jobs would likely be lost through attrition over the next few years and said it would try to find new jobs for affected workers within the company.

The coal-fired units affected are the 325-MW Comanche 1, which entered service in 1973, and the 335-MW Comanche 2, which came online in 1975. The filing said Unit 1 would be retired in 2022 (11 years ahead of schedule), with Unit 2 taken offline in 2025 (10 years ahead of schedule). Comanche 3, a 750-MW unit that came online in 2010, will remain in operation, in part to serve the nearby Evraz Steel Mill, the utility’s largest commercial customer in the state.

The Comanche plant in Pueblo in southern Colorado sources low-sulfur coal via rail from the Powder River Basin (PRB) in Wyoming. It was recently selected as the PRB Coal Users’ Group 2018 Plant of the Year (see “Common Goals and Team Mentality a Winning Combination” in the June 2018 issue of POWER magazine). Comanche’s Unit 3 was Colorado’s “first advanced, highly efficient, supercritical coal unit” according to Xcel. Though Xcel operates the entire Comanche plant, it has two partners in Unit 3: Intermountain Rural Electric Association (25%) and Holy Cross Energy (8%).

Utility Adding Wind, Solar, Storage

Xcel’s new plan calls for the addition of 1,100 MW of wind power generation, 700 MW of solar, and 275 MW of battery storage, which it said would be “embedded in solar plus storage projects.” The utility also said it would utilize 380 MW “of existing flexible gas resources.” Xcel already is expanding its wind generation in the Upper Midwest as part of its plan to make wind more than one-third of its total generation portfolio.

Xcel earlier this year sought relief for costs associated with its nuclear plants in Minnesota. A bill that would have provided more cost-recovery certainty for Xcel’s Prairie Island station, along with the utility’s Monticello plant, died in the state’s House of Representatives.

The additional Colorado generation would come from three wind farms and five solar farms. Xcel also plans to renew its power purchase agreement with an existing solar farm in Park County west of Denver. The utility said three of the new solar farms would include battery storage. It said the facilities associated with its plan are located in Adams, Baca, Boulder, Cheyenne, Kit Carson, Morgan, Park, Pueblo, and Weld counties.

Weld County, which stretches from just north of the Denver metro area to the Wyoming border, is home to much of the Denver-Julesburg Basin, part of the Niobrara oil and gas play. Weld County is home to most of Colorado’s oil and gas production, though the state is rapidly becoming a major player in renewable energy. The state ranks 12th in the U.S. in solar power generation, according to the national Solar Energy Industries Association, and ranks seventh in wind generation, according to the U.S. Department of Energy.

Xcel said some of the new solar farms would be sited in Pueblo County, which could offset some of the economic impact and job losses from the retirements of the coal units at Comanche.

Lower Costs for Renewables

Xcel late last year said it received 430 individual proposals, including 238 total projects, in response to a resource solicitation for its plan. It said at the time that more than 350 of the proposals were for renewable energy projects, or renewable energy paired with storage. It also said prices put forth in the bids may have been record lows for renewable energy paired with storage, with a median price bid for wind-plus-storage projects of $21/MWh and a median bid for solar-plus storage of $36/MWh.

“The response to this solicitation is unprecedented,” Xcel said at the time, noting that a similar all-source solicitation in 2013 received just 55 bids.

Environmental groups praised Xcel’s plan but said they still need to study its details. In an emailed statement to POWER, the Sierra Club’s Beyond Coal Campaign said, “To our knowledge, this is the single largest national clean energy proposal to replace retiring coal capacity.”

Zach Pierce, the senior campaign representative for Beyond Coal, said, “Xcel’s Colorado Energy Plan proves utilities know clean energy and battery storage are more than capable of providing low cost, clean, and reliable energy to power our communities and grow our economy. While the Trump Administration has doubled down on costly coal plants, Xcel’s Colorado Energy Plan illustrates the realities and opportunities of America’s 21st century clean energy marketplace. A much more thorough analysis is necessary, but this is a big step in the right direction. As this process moves forward we will continue to advocate for a positive economic transition for Pueblo.”

“This is great for cost savings and combating pollution, and we’ll be closely reviewing the report to make sure it supports Pueblo workers and our community as a whole,” said Jamie Valdez, Sierra Club’s Pueblo Volunteer Leader.

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

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