Xcel Energy, Colorado’s largest electric utility, announced the day before Thanksgiving that it had reached a partial agreement on some of the key points in a new electric resource plan. However, environmental and trade organizations are questioning whether the utility can deliver the cuts in greenhouse-gas emissions as promised and are concerned about the financial impacts on customers.
The electric resource plan, submitted every four years to regulators, projects the amount of electricity the utility will need and the sources it will use. A 2019 law requires utilities’ plans to map out a path to meeting the goals of cutting carbon dioxide emissions associated with the power it sells by 80% from 2005 levels by 2030 and 100% by 2050.
Alice Jackson, Xcel Energy-Colorado president, said the partial agreement with several parties involved in the negotiations on the plan will allow the utility to exceed the goals.
“It is achieving a roughly 87% carbon reduction and doing so in an affordable and a reliable way for all of our customers,” Jackson said.
Xcel Energy pledged in 2018 to provide carbon-free electricity across the eight states it serves by 2050.
The Colorado Public Utilities Commission will open a hearing Wednesday on the partial agreement. A key part of the proposal is the speeded-up closure of the Comanche 3 coal-fired unit in Pueblo.
Xcel Energy originally proposed closing the plant, long beset by chronic equipment and operations problems, in 2040. The tentative agreement moves the retirement date to Dec. 31, 2034. The plant’s output would be ratcheted down starting in 2025.
The Sierra Club wants to see Comanche 3 closed sooner in light of its ongoing troubles and concerns about reducing climate-changing emissions. The plant functioned for just a few days in 2020 because of mechanical problems, according to a PUC report.
“The Comanche 3 coal plant is Colorado’s single largest source of climate pollution and Xcel’s most unreliable power plant,” Ren-Caspar Smith, Sierra Club’s Fossil Free Front Range organizer, said in a statement. “The Comanche 3 coal power plant has been plagued with outages and cost overruns, and it’s unacceptable to force customers to keep paying for it until 2035.”
Several speakers in a Dec. 2 public hearing on Xcel Energy’s plan echoed those concerns. Katherine Goff, a Northglenn City Council member, said the progress Xcel Energy has made on moving to renewable energy is notable.
“However, when you consider the scope of the problem we are facing, it’s not enough. The effects of climate change are ever-present throughout Colorado,” Goff said.
The city of Northglenn has started to buy electric vehicles as part of its environmental sustainability plan, Goff said. “If our town of less than 40,000 people works to power more with electricity, but that electricity is created by burning fossil fuels, it continues to add to the problem.”
The proposed settlement includes several elements that would improve Xcel Energy’s plan, Gwen Farnsworth, a senior policy adviser for the environmental group Western Resource Advocates, said in an interview. One of those is the company’s plan to provide assistance to Comanche 3 employees and the community.
Xcel Energy said it will make payments to Pueblo County to make up property tax revenue lost because of Comanche 3’s early closing.
However, Farnsworth said Western Resource Advocates is concerned the settlement doesn’t provide enough certainty on emissions reductions. Another worry is that it could commit Xcel Energy to long-term investments in fossil-fuel operations, including natural gas plants, when Colorado is striving to meet its climate-change goals.
Parties in the negotiations that agreed to the settlement include the Colorado Energy Office; the PUC staff; the Colorado Office of the Utility Consumer Advocate; trade unions; Boulder, Denver and Pueblo city governments; the Pueblo County commissioners and the Colorado Oil and Gas Association.
Western Resource Advocates and the Sierra Club didn’t sign onto the agreement. Neither did the Colorado Independent Energy Association and Interwest Energy Alliance, trade groups that represent power producers and manufacturers that often bid to develop Xcel Energy projects. The groups said in a statement that while the agreement has important provisions to move the utility from fossil fuels to renewable energy, it puts constraints on the state’s competitive bidding process.
“In the settlement, the ratepayers are committed to paying over $600 million of investment into resources to be owned by the utility. We believe that can increase overall costs due to a limit placed on Colorado’s highly regarded competitive procurement rules,” Rikki Seguin of Interwest said in an interview.
The power source that will replace Comanche 3 should be put out to open bids, Seguin said. And any decision on replacement generation are better suited for the next electric resource plan, she added.
“There are too many technological, societal and political changes that are possible in the next decade to make this decision right now, in the last second of the (planning) process,” Seguin said.
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