Xcel Energy’s $1.3 billion plan to replace or retrofit 10 coal-burning power plants has sparked a debate over the economic impact of rising electricity rates on Colorado’s families and biggest industries.
The program will add about 2 percent, or $14, to the average annual residential bill by 2020.
At the same time, however, base rates through inflation could rise 31 percent in the next 10 years, according to Xcel.
That would bring the average annual residential bill to $934, according to the utility.
That has prompted some concerns about the impact of rate increases on the state’s economy.
The Clean Air-Clean Jobs Act, passed in April, gave Xcel incentives to replace 900 megawatts of its aging coal plants by 2017 to help cut air pollution.
The state is struggling to meet federal standards for ozone and haze and is facing new rules on mercury emissions.
Xcel’s plan would cut sulfur-dioxide emissions by 84 percent, nitrogen oxides by 89 percent and mercury by 83 percent by 2023.
Handling all the plants under one plan would allow plant upgrades and pollution cuts to be made more efficiently, saving $225 million, the utility said.
The health benefits of those pollution cuts total $590 million over the next 36 years, according to a study by Western Resource Advocates, an environmental group supporting the Xcel plan.
Balanced against the health and environmental benefits are concerns voiced by economists and businesses about the plan’s costs.
An analysis done for the PUC staff by Harvey Cutler, a Colorado State University economist, calculated that over 10 years, the plan would cost households $89 million and reduce local and state taxes by $2.8 million.
There would be a total loss of 2,459 jobs associated with the rise in electric rates, including 882 jobs linked to the Clean Air-Clean Jobs plan, according to the Cutler analysis.
The average industrial-rate customer between 2011 and 2020 will pay about $90,000 extra in rates, or a 12 percent increase, according to a study done for Climax Molybdenum Co., which has a mine in Empire, and Pueblo-based CF&I Steel Corp.
The University of Colorado’s Leeds School of Business did a study of economic impacts for Xcel and projected that spending would generate up to $1.7 billion in economic activity and 1,254 jobs mainly in construction between 2010 and 2026. “We believe in the Leeds study,” Xcel spokesman Mark Stutz said.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
Public hearing
Agenda: The Colorado Public Utilities Commission will hold a public hearing on Xcel Energy’s Clean Air-Clean Jobs plan.
Today: 4 p.m.
Site: PUC headquarters, 1560 Broadway
