Xcel: Natural gas plan nothing new
Company says it's aiming for right mix of coal, wind and fossil fuels for energy
Plans by Xcel Energy to replace coal-fired plants in the metro Denver area have coal miners in northwest Colorado upset, but the energy mix it’s proposing isn’t all that new, company officials said.
The company’s proposal to close two coal-fired plants on the Front Range and replace them with electricity generated by burning natural gas will restore much of the energy mix previously used by Xcel, Karen T. Hyde, vice president of rates and regulatory affairs, said Tuesday.
Wind-generated electricity and the construction of the coal-fired Comanche power plant on the Front Range have reduced the proportion of electricity generated by natural gas in recent years, Hyde said.
Xcel’s efforts to meet new federal requirements as well as those of the state are leading it back to natural gas, Hyde said in a meeting with The Daily Sentinel’s editorial board Tuesday.
“By the early 2020s, we’ll be close to the same fuels we had just a few years ago,” Hyde said.
The changes will have the effect of raising rates about 1 percent for Xcel’s Colorado customers, said Hyde, who attended the hearing by the Colorado Public Utilities Commission in Grand Junction on Monday night. The commission is to rule by Dec. 15 on Xcel’s plans after hearings with numerous intervenors in Denver.
Xcel studied about 300 potential combinations to meet looming federal requirements to reduce haze by cutting oxides-of-nitrogen emissions by 89 percent by 2023, Hyde said. Reducing those emissions also will reduce emissions of sulfur dioxide, mercury and carbon dioxide.
The effects of the changes on the Colorado coal-mining industry will be minimal because Xcel intends to continue operating the 446-megawatt Hayden station in Moffat County on northwest Colorado coal, Hyde said.
Xcel purchases no coal from the mines in the North Fork Valley.
In shutting down its Cherokee and Valmont units, Xcel also is eliminating the cost of some of its most expensive coal.
Xcel has reached a five-year agreement with Anadarko Petroleum Corp. to supply natural gas for its plants if its plan is accepted by the Public Utilities Commission, Hyde said.
The switch to more natural gas will result in cuts of 100 to 125 positions by 2023, which Xcel can handle with attrition and retraining, Hyde said.
One piece of Xcel’s puzzle, the soon-to-be-closed Cameo station in De Beque Canyon, will be shut down Dec. 31, but the future of the property remains undefined, Xcel Area Manager Fred Eggleston said.
Xcel intends to maintain its water right for the plant for five years, at least, beyond the closure, Eggleston said.
The Public Utilities Commission will have to approve any plans the company has for the Cameo property, including decommissioning and clearing the existing buildings.