Xcel Energy is seeking regulatory permission to build two natural-gas combustion turbines that would add about 300 megawatts of generating capacity to its Fort St. Vrain plant in Weld County.
The project would help the utility meet peak demand in summer 2009 — when it expects a shortage in capacity because of a canceled purchased-power agreement with Squirrel Creek Energy.
Xcel estimates the project will cost $201.2 million, which would be passed on to Colorado ratepayers.
Ratepayers United of Colorado said Wednesday it is challenging the effort, alleging that the turbines will cost ratepayers two to five times more than what they are currently paying on average for energy. Environmentalists Nancy LaPlaca and Les lie Glustrom also have opposed the project, charging that Xcel failed to fully consider alternative energy sources.
Xcel spokesman Tom Henley declined to comment on those challenges.
Jim Greenwood, director of the Office of Consumer Counsel, said Xcel’s proposal is a “workable solution for the shortfall in 2009.”
“We support it in general; however, there still remains some minor issues that we still need to work out with (Xcel),” Greenwood said.
In a filing with the Colorado Public Utilities Commission, Xcel said it decided to pursue the project after Squirrel Creek sought a 16 percent increase in the capacity price of its purchased-power agreement. That agreement called for Squirrel Creek to build two 130-megawatt combustion turbines for use by summer 2009.
Xcel rejected Squirrel’s request, contending that accepting it “would threaten the integrity of the competitive bidding process,” according to a November filing.
The company said it looked at various options and concluded that “the most reasonable, cost-effective way to assure adequate capacity” was to build at Fort St. Vrain, which has 737 megawatts of capacity.
Xcel said it must begin construction by April to have the turbines in service by June 2009. As such, the PUC placed the case on expedited review, with hearings scheduled for the week of Feb. 11. A decision is expected by March, said PUC spokesman Terry Bote.
Separately, Xcel chairman Dick Kelly said Wednesday that the utility will solicit bids for a separate power project in Colorado this quarter, but he didn’t provide details.
Kelly also said Xcel expects to file a rate case in the fourth quarter and would seek to base the rates on estimated future costs rather than past data.
Andy Vuong: 303-954-1209 or avuong@denverpost.com
