Colorado’s largest electric utility, Xcel Energy, announced a day before Thanksgiving that it had reached a partial agreement on some key points in a new electrical resource plan. However, environmental and trade organizations are questioning whether the utility can cut greenhouse-gas emissions as promised and are concerned about the financial impacts on customers.
An electricity resource plan, submitted to regulators every four years, projects the amount of electricity a utility needs and the sources it uses. The 2019 law requires utilities plans to map a path to meet carbon dioxide emissions reduction targets, which sell from 2005 levels by 2030 and 100% by 2050.
Alice Jackson, president of Accel Energy-Colorado, said a partial agreement with several parties involved in negotiating the plan would allow the utility to exceed targets.
“It’s achieving a carbon reduction of about 87% and doing so in an affordable and reliable way for all of our customers,” Jackson said.
Xcel Energy promised in 2018 to provide carbon-free electricity in eight states by 2050.
The Colorado Public Utilities Commission will begin hearings on the partial settlement Wednesday. A key part of the proposal is the rapid closure of the Comanche 3 coal-fired unit in Pueblo.
Xcel Energy originally proposed closing the plant in 2040, plagued by outdated equipment and operational problems. The temporary settlement moves the retirement date to December 31, 2034. Production of the plant will start in 2025.
The Sierra Club would like to see Comanche 3 shut down as soon as possible in light of ongoing concerns and concerns about reducing climate change emissions. According to a PUC report, the plant functioned for only a few days in 2020 due to mechanical problems.
“The Comanche 3 coal plant is Colorado’s biggest source of climate pollution and Xcel’s most unreliable power plant,” said Sierra Club’s Fossil Free Front Range organizer Ren-Casper Smith in a statement. “The Comanche 3 coal power plant is plagued by outages and cost escalation, and forcing customers to pay for it by 2035 is unacceptable.”
2 public hearings on Xcel Energy’s plan echoed those concerns. Northglen City Council member Katherine Goff said the progress Xcel Energy has made on the move to renewable energy is remarkable.
“However, when you consider the scope of the problem we are facing, it is not enough. The effects of climate change are always present throughout Colorado,” Goff said.
Goff said the city of Northglen has started buying electric vehicles as part of its environmental sustainability plan. “If our city with a population of less than 40,000 works to produce more electricity than it does, but that electricity is produced by burning fossil fuels, it only exacerbates the problem.”
Gwen Farnsworth, senior policy advisor at environmental group Western Resource Advocates, said in an interview that the proposed settlement includes several elements that would improve Xcel Energy’s plan. One of them is the company’s plan to provide support to Comanche 3 employees and the community.
Xcel Energy said it will pay Pueblo County for the reduction in property tax revenue due to the early closure of Comanche 3.
However, Farnsworth said Western Resource Advocates are concerned that the settlement does not provide sufficient certainty on emissions reductions. Another concern is that it could commit Xcel Energy to long-term investments in fossil-fuel operations, including natural gas plants, at a time when Colorado is striving to meet its climate-change goals.
The parties to the negotiations agreeing to the agreement include the Colorado Energy Office; PUC employees; Colorado Office of the Utility Consumer Advocate; trade unions; Boulder, Denver and Pueblo city governments; Pueblo County Commissioners and the Colorado Oil and Gas Association.
Western Resource Advocates and the Sierra Club did not sign the agreement. Neither did the Colorado Independent Energy Association and the Interwest Energy Alliance, the trade group representing power producers and manufacturers that often bid to develop Xcel Energy projects. The agreement has important provisions for the utility to move from fossil fuels to renewable energy, but it hinders the state’s competitive bidding process, the groups said in a statement.
“In settlement, rate-payers have committed to paying back an investment of more than $600 million in utility-owned resources. We recognize that a limit on Colorado’s highly respected competitive procurement rules could increase overall costs. ,” Intervest’s Ricky Seguin said in an interview.
Seguin said the power source to replace the Comanche 3 should be placed in open bids. He said that any decision on replacement generation is better suited for the next power resource planning.
“There are so many technological, social and political changes that are possible in the next decade that it is possible to make this decision right now in the last seconds of the (planning) process,” Seguin said.