Xcel Energy has unveiled its $2.5 billion Colorado Energy Plan to the Colorado Public Utilities Commission.
Xcel Energy filed a stipulation with a broad coalition of 14 diverse groups.
The plan could lead to $2.5 billion in clean energy investments in rural Colorado, if there is no additional cost to the company’s electricity customers.
“[The] filing starts a conversation about how Colorado will transition to the clean energy economy of tomorrow. If approved, the commission will have an opportunity to evaluate transitioning our power production away from coal and toward less expensive clean renewable resources,” said Erin Overturf, WRA chief energy counsel. “Taking advantage of these low cost options now would reduce customers’ bills, while improving air quality and reducing greenhouse gas pollution that causes climate change.”
The “Colorado Energy Plan” proposes a proactive and widely supported electricity-generating portfolio to augment the company’s current 2016 Electric Resource Plan (ERP). In addition, the Colorado Energy Plan would only be advanced if the resulting portfolio of resources reduces, or at least does not increase, the cost of energy to Xcel Energy’s Colorado customers.
The new generation projects will be identified and selected through a soon-to-be initiated competitive acquisition process, targeting a mix of utility and independent power producer (IPP) owned facilities, with Xcel Energy having a targeted investment of 50 percent of the renewable generation, and 75 percent of the natural gas–fired, storage, or renewable-with-storage-generation resources in the portfolio. Portfolio estimates are up to 1,000 megawatts of wind, up to 700 megawatts of solar and up to 700 megawatts of natural gas.
Parties to the stipulation are seeking approval of the proposal from the CPUC by the end of 2017, which would allow the company to bring forth a portfolio that includes the retirement of coal units and replacement of generation capacity. Among the major components of the Colorado Energy Plan are:
- Retirement of 660 megawatts of two coal-fired generation units at the Comanche Generating Station, located in Pueblo, Colo., including Unit #1 by the end of 2022 and Unit #2 no later than the end of 2025 (Unit #3 would remain in service);
- Issuance of a competitively bid, all-source “request for proposal” (RFP) as part of Phase II of the 2016 Electric Resource Plan. The RFP could result in additions of up to 1,000 megawatts of wind, up to 700 megawatts of solar and up to 700 megawatts of natural gas and/or storage. No coal resource will be added as part of the RFP. Carbon emission could be reduced by up to 60 percent by 2026, when compared to 2005 levels, under the proposal;
- Utility ownership targets of 50 percent renewable generation resources and 75 percent of natural gas–fired, storage, or renewable-with-storage-generation resources in the portfolio;
- Reduction of the Renewable Energy Standard Adjustment (RESA) bill rider to 1 percent, from the maximum 2 percent allowed, and currently being funded, under state law. The reduction of the RESA would be the subject of future regulatory proceedings and would not take effect until 2021 or 2022;
- Accelerated depreciation for the early retirement of the two coal-fired units at Comanche, also to be addressed in future regulatory proceedings; and
- Construction of a new switching station for a southern Colorado transmission “energy resource zone,” to help foster the further development of renewable generating resources in rural Colorado.
Xcel Energy plans to issue the all-source RFP in the next several days and would anticipate filing a recommended portfolio with the CPUC in the first quarter of 2018. A final decision on the recommended portfolio by the CPUC is expected in the summer of 2018.
