Xcel declares shift away from coal power
Company hopes to make change without rate hikes
Xcel Energy is asking the Colorado Public Utilities Commission to approve a plan that it hopes could lead to $2.5 billion in clean energy investments across the state.
That plan, which Xcel submitted to the PUC on Tuesday with the support of 14 other groups, calls for shuttering two of its coal-fired power plants in Pueblo a decade earlier than initially planned.
At the same time, the utility wants to replace that energy generation with new sources from wind, solar and natural gas from yet-to-be-built facilities around the state, including the Western Slope.
David Eves, president of Xcel Energy-Colorado, said the company has a unique opportunity to take advantage of the expiring federal Renewable Electricity Production Tax Credit, which is being phased out by 2020.
As a result, Eves believes the company not only can have sustainable energy for many years to come, but do it at a cheaper cost to consumers in their monthly bills.
“We see very competitive, low-cost projects taking advantage of the full-production tax credit,” Eves said. “With the declining cost of renewables, the improved technology and performance, they are going to come in at a cheaper cost compared to continuing to operate the (Pueblo) units.”
Erin Overturf, chief energy counsel at Western Resource Advocates, said what Xcel is proposing isn’t unique.
“This is truly a national trend where you see major companies across the country see that there are financial benefits to their customers in moving away from fuel-based generation and toward renewable steel-based generation,” she said. “That fuel-for-steel transition is happening all over the country. The economics of renewable resources are drastically improving year over year, and we’ve also got an opportunity today to take advantage of the bipartisan federal tax credit for renewable resources. Those things combined make this an ideal time to act.”
Eves said the plan it has submitted to the PUC would only go forward if it either lowers customers’ bills or at least doesn’t increase them.
Tuesday’s announcement does not impact any other coal-fired plant that Xcel operates in the state, including its two plants in Hayden, which burn coal mined from the Twenty Mile Mine in Routt County. Those plants, along with the Tri-State Generation coal plants in Craig, of which Xcel has a 10 percent ownership, recently were upgraded with special emission controls to reduce their carbon output.
In recent years, Xcel has reduced the number of coal-fired plants it operates, either by closing them, such as at Cameo near Palisade, or converting them to burn natural gas, such as at its plants in Boulder and Denver.
If approved, Xcel’s plan calls for soliciting bids for wind, solar or natural gas power generation. It hopes to create up to 1,000 megawatts of power from wind, 700 megawatts from solar and 700 megawatts from natural gas.
Eves said that while he won’t rule out getting that power from out of state, the aim is to keep it in state, helping to create jobs and generate economic activity in rural Colorado.
The move also would bring the power supplier to obtaining 55 percent of all of its electricity from renewable sources by 2026, well above the state renewable energy standard of 30 percent by 2020. That figure rises to 75 percent when the company adds natural gas and fuel storage.
Eves also said he isn’t concerned about blowback from President Donald Trump, who has made bringing coal back a policy of his administration.
“We’ve stated very clearly that we know that our customers want cleaner energy, they want us to reduce emissions, they also want us to hold costs low and provide reliable service and continue with this transition of the energy system,” Eves said. “We will continue to do that, particularly when we can do it without increasing costs to our customers. We’re very committed toward de-carbonizing when the policies and the economics of the technology choices make it possible to do so without increasing our customer costs. It’s really about economics.”
The PUC request has the backing of several energy groups and companies, including the Colorado Energy Office, the Colorado Independent Energy Association and Interwest Energy Alliance.