Xcel Energy plans to roughly double its renewable generation by 2015 and close a pair of coal-fired plants in Colorado to help cut at least 10 percent of its greenhouse-gas emissions by 2017, the company said Thursday.
The moves, if approved by regulators, will lead to higher bills for Xcel customers, though the company said the increase will be “incremental.”
The plans are outlined in a report Xcel filed with the Colorado Public Utilities Commission late Thursday that forecast consumer electric needs through 2015 and how the company will meet them.
Generally filed every four years, the report this year has greater emphasis on clean energy following legislative mandates and Gov. Bill Ritter’s recently announced climate action plan calling for utilities to reduce greenhouse-gas emissions by 20 percent by 2020.
Xcel plans to shut down the Arapahoe Generating Station in Denver and the Cameo Generating Station east of Grand Junction, which will cut carbon dioxide emissions by 1.4 million tons a year.
The state’s largest utility will replace the plants’ 229 megawatts of generation with a 480-megawatt natural-gas generating facility, which will be built at the Arapahoe location. The company will also seek to add another 800 megawatts of natural-gas generation elsewhere.
On the renewable front, Xcel said it will add by 2015 about 1,050 megawatts of generation – 800 megawatts of wind power and roughly 250 megawatts of solar power. That’s on top of the 1,100 megawatts of wind generation the company has said it will have by the end of 2007.
“If you put this plan together, we’ll reach a 10 percent reduction level on CO2 emissions from 2005 levels by the year 2017,” Xcel chief executive Dick Kelly said in an interview Thursday.
“This puts us on a path in line with Gov. Ritter’s climate action plan. … Our goal will definitely be to get to Gov. Ritter’s 20 percent.”
State limits Xcel charges
Though they’re better for the environment, alternative energy sources and natural-gas generation cost more than coal-fired generation.
Xcel will provide details Monday about how much more consumers can expect to pay for the increased usage in renewables.
Under state law, Xcel can’t charge consumers more than 2 percent over what they would pay for conventional energy for renewable energy, and Kelly said Xcel would stay within those limits.
The costs of fossil-fuel generation vary widely as coal and natural gas prices change. In recent years, natural-gas power has cost an average of eight to 10 cents per kilowatt-hour, while coal has averaged about four cents, according to energy analysts.
Jim Greenwood, director of the Office of Consumer Counsel, said his office will review Xcel’s report to ensure the added costs aren’t excessive.
“My major concern is that we’re all in favor of keeping the environment clean and being supportive of the governor’s energy policy, but we want to make sure our constituents aren’t overburdened with excessive costs,” Greenwood said.
PUC chairman Ron Binz said regulators “will weigh many factors, including consumer cost, environmental sustainability and system reliability.”
Jon Caldara, president of Golden- based think tank Independence Institute, said Xcel’s decision to retire the coal plants under pressure from the government raises questions about whether it makes economic sense for the company and consumers.
“To pass on a cost and try to disguise it as a low cost, and close down a very secure form of power like coal … I guess we can call it the Ritter energy tax,” Caldara said.
“If closing the coal power plant is a good economic decision for Xcel, they will do so without any mandate from the state.”
“Model for other utilities”
John Nielsen, energy program director for Western Resource Advocates, lauded Xcel for being the first utility in the West to lay out a plan to cut its greenhouse-gas emissions.
“Xcel’s plan will hopefully serve as a model for other utilities on how they can affordably and reliably meet growing demand for energy while at the same time addressing the pressing problem of global warming,” Nielsen said.
The locations for the new wind, solar and natural-gas plants haven’t been determined, but Kelly said he hopes to have them built in Colorado. The company is expected to solicit bids for them in July if the plan is approved by regulators.
Kelly said Xcel will file a new plan in two years – rather than the traditional four years – that will update the forecast through 2019 because of the rapidly changing technological and regulatory environment.
“A lot is going to happen in the next two years,” he said.
“We might have some federal and state regulations. Maybe some clean energy technologies will be further developed.”
Andy Vuong: 303-954-1209 or avuong@denverpost.com
