By Peter Marcus, DENVER DAILY NEWS
The Colorado Public Utilities Commission yesterday approved a $1.3 billion plan to retire, retrofit or repower coal-burning power plants along the Front Range, expected to cost ratepayers an additional 2.4 percent annually.
The PUC’s unanimous decision ends more than a year’s worth of negotiations over what became the Colorado Clean Air-Clean Jobs Act. House Bill 1365 requires Xcel Energy to retire, retrofit or repower northern Front Range coal-fired power plants by the end of 2017, replacing them with facilities fueled by natural gas and other low- or non-emitting energy sources.
A formal written decision from the PUC is expected Dec. 15.
The plan approved by the PUC is not identical to Xcel’s recommended plan, but costs the same $1.3 billion in capital costs. But because the plan approved by the PUC relies more heavily on natural gas — at an increased cost of about $41 million per year — Xcel expects ratepayers to see an increase of about 2.4 percent, instead of the originally estimated 1.7 percent.
In all, the plan calls for Xcel to retire four Denver-area coal-fired power plants and switch the remaining unit to natural gas. The plan also calls for the accelerated phase out of coal-fired electricity at Arapahoe Units 3 and 4 in Denver.
Xcel had recommended that instead of retiring all of the units at the Cherokee Generating Station near Boulder, the utility should retrofit the fourth unit at the plant with state-of-the-art emission control equipment, allowing it to continue to operate on coal. Xcel said this was the best way to reach a 2017 deadline.
The PUC, however, approved a plan that requires a straight fuel switch from coal to natural gas on the Cherokee Generating Station Unit 4, which is a 352-megawatt plant. Xcel says the plant will cease to be coal-fired by Dec. 21st, 2017, instead burning solely on natural gas.
“We’re worried about the efficiencies of burning gas at Cherokee 4. But all of the options that they were considering this week will work for the ultimate goal, which is to reduce our oxides and nitrogen,” said Mark Stutz, spokesman for Xcel Energy.
The plan is expected to achieve reductions in nitrogen oxides of 85 percent by 2017, and additional reductions in sulfur dioxide, carbon dioxide and mercury, said Xcel.
A spokesman for the PUC said yesterday following the decision that the plan will allow the PUC more time to evaluate other options beyond just natural gas.
“It’s not the commission’s intention that this will run on natural gas indefinitely, or even to the end of its life,” said Terry Bote, a spokesman for the PUC. “The commission essentially took this option because, one, it provides additional emissions reductions over putting a scrubber on it, and two, it provides flexibility by affording the commission additional time to look at other possibilities, other alternatives …”
But coal advocates called the PUC decision “shameful,” lashing out at Democratic Gov. Bill Ritter for having supported and pushed the legislation.
The rulemaking process was filled with controversy after the Colorado Mining Association filed a motion with the PUC to disqualify two of its members — Chairmen Ron Binz and Matt Baker — over concerns that the two chairmen engaged in negotiations over HB 1365. The PUC denied the motion.
Several Republican lawmakers also asked the PUC to disqualify Binz specifically after e-mails surfaced indicating that he had been involved in negotiations over HB 1365.
Critics say the plan comes at the wrong time for Colorado ratepayers, especially low-income families and individuals already facing difficult utility bills. They also point out that Colorado coal miners are likely to lose jobs as a result of the ruling.
“This is Gov. Ritter’s energy poverty legacy for Colorado,” said Stuart Sanderson, president of the Colorado Mining Association. “It’s a sad day for Colorado energy consumers, and for obviously the workers in the coal and related industries who will be displaced. Ultimately time will tell, but these entire proceedings were a sham …”
Environmentalists yesterday were generally happy with the decision, but asked the PUC to set a definitive retirement date for the Cherokee station Unit 4.
“By not setting a firm retirement date for the last unit at Cherokee, the Commission’s deliberations today fell short,” said John Nielsen, energy program director with Western Resource Advocates. “Until there is certainty as to when that plant will be shutdown there are risks that the largest source of pollution in the heart of Denver could be switched back to coal or that we will operate this inefficient unit too long and postpone the transition to a more modern power system.”
Pam Kiely, program director with Environment Colorado, said Colorado received an early holiday present.
“Colorado is getting cleaner air and a stronger economy this holiday season,” said Kiely. “This is a victory for the thousands of Coloradans that weighed-in, from doctors to small business owners to local officials …”