Xcel Energy Colorado unveiled a new power plan that the utility estimates could save customers $215 million, cut carbon emissions by half and lift renewable energy sources to 55 percent of its electricity portfolio by 2026, according to a filing submitted Wednesday with the Colorado Public Utilities Commission.
The filing, known as the 120-day report, would retire 660 megawatts of coal generation from the Commanche 1 and Commanche 2 plants in Pueblo and add 1,100 megawatts of new wind capacity, 750 megawatts of solar generation, and 380 megawatts of flexible gas sources.
And in a new twist, the utility has asked to add 275 megawatts of battery storage capacity that would allow it to store power from solar sources to use when the sun isn’t shining.
“Our recommended plan secures long-term and low-cost renewable power, stimulates
economic development in rural Colorado, and substantially reduces greenhouse gas emissions – all at a savings to customers. It is a solid plan that moves Colorado forward,” Alice Jackson, president of the state’s largest utility, said in a news release.
Xcel estimates its plan, which must undergo public review and regulatory approval, would generate $2.5 billion in new investment across eight mostly rural Colorado counties. The counties set to benefit include Adams, Baca, Boulder, Kit Carson, Morgan, Park, Pueblo and Weld.
Late last year, Xcel Energy was confronted with an overwhelming response — 450 bids — when it put out requests for future power supply under its 2016 Electric Resource Plan. The wind and solar bids, in particular, were the lowest ever received by a utility in the country, and several came in below the cost of coal, even with the inclusion of battery storage.
The utility had 120 days to make its preferred list but asked state regulators for two month-long extensions to sort out logistical issues, such as the best locations so it could carry the new electricity on its grid.
It also appears that Xcel Energy went to extra lengths to ensure that Pueblo County, which is losing two coal plants ahead of schedule, one in 2022 and the other in 2025, would receive significant investment. Pueblo County is slated to host 525 megawatt of solar generation across three locations. In a first for the state, two of three locations are coming with battery storage, a combined 225 megawatts.
“Xcel’s Colorado Energy Plan is a true testament to how fast the cost of clean energy is dropping. This plan makes clear that we can power our communities with reliable, affordable and clean power made in Colorado for Colorado,” Zach Pierce, senior campaign representative for Sierra Club’s Beyond Coal Campaign in Colorado, said in a statement.
Although more analysis is needed, he said the plan was a step in the right direction.
One concern for environmental groups was how much gas-powered generation Xcel would add in its future mix. Given how rapidly renewable-energy prices are falling, they feared the utility could quickly find itself with an uneconomic and carbon-emitting power source, especially if volatility returned to natural gas prices.
But the gas-fired generation that the utility will turn to represents existing capacity rather than the construction of new plants, and it will own them outright.
The proposal takes coal — responsible for 44 percent of electricity generation last year — down to 24 percent by 2026. That reduction, however, could run into opposition from the Trump administration, which has given instructions to the Department of Energy to preserve the nation’s coal and nuclear power capacity with a moratorium on plant retirements.
Natural gas would drop from 28 percent to 23 percent of the mix, while wind would rise from 23 percent to 39 percent. The biggest gainer would be solar, which is slated to move from 3 percent to 13 percent of Xcel’s generation in the state.
The PUC will hold public hearings on the 120-day plan before ruling on it in the early fall.
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