DENVER (KDVR) — In what’s being described as a major step to bring Colorado closer to reaching its goals to reduce greenhouse gas emissions, the state’s Public Utilities Commission approved the state’s largest energy provider’s clean energy plan this week.
Xcel Energy provides 53% of Colorado’s electricity and is by far the state’s largest provider. The company submitted its Clean Energy Plan to the state in the spring of 2021 but has made changes over the past year that would accelerate some key projects in transitioning from coal to renewable energy sources for electric.
The big goal, deliver 80% of Colorado’s electricity through renewables by 2030. The plan would reduce carbon emissions by at least 85% by 2030 from 2005 levels.
The plan is complex and will impact hundreds of jobs across the state as the company pivots to deliver 100% carbon-free electricity by 2050.
Phasing out coal faster
A major change in the plan is accelerating how quickly Xcel plans to retire its few-remaining coal-fired plants in the state. Under a previous plan, the company was set to retire the Comanche Unit 3 plant in Pueblo County in 2040.
Currently, Colorado generates most of its electricity from coal sources.
The new deal will phase out Comanche 3 by Jan. 1, 2031, with reduced operations starting as soon as 2025. Comanche 1 is set to retire this year, with Comanche 2 set to retire in 2025. One hundred and thirty-four people are employed at the Comanche Generating Station.
Xcel is also bumping up timelines to shut down or transition coal-fire plants in Hayden and Brush. The Hayden Generating Station employs 68 people, and the plan is to shut down Unit 1 in 2028 and Unit 2 in 2027. The previous shutdown dates were 2030 and 2036 for the two units.
The plan for the Pawnee Generating Station in Brush is different, as Xcel wants to transition that site from a coal-fired plant to burn natural gas to produce electricity by 2026 at the latest. That station employs 80 people.
In total, 282 jobs will need to be replaced or transitioned in mainly-rural Colorado communities. The company said it has a long track record of retiring coal generation without layoffs.
How will Xcel handle transitioning nearly 300 coal-energy jobs?
Xcel said the company tries to communicate plant closures as far in advance as possible, and the company will try to transition plants without layoffs.
The company said it will work with community leaders, plant employees and labor unions to create transition plans for coal plant retirements.
“We are committed to making sure that we are helping the employees and the communities that are served by those plants,” said Xcel Energy President Robert Kenney. “We know our employees have played a significant role over many many decades, and so we are going to be making sure that we keep a healthy tax base in place either by replacement generation or with new economic development opportunities.”
The company’s position statement for transitioning out of coal said, “While we cannot guarantee jobs, we commit to provide opportunities and do everything we can to avoid severing employees.” The company said it provides job shadowing and training opportunities, as well as tuition programs to help employees pursue new roles out of coal.
But the 300 Coloradans aren’t the only ones who will feel the impact of this transition, local cities and counties would lose out of years in property tax payments. But, Xcel has a plan for that too.
Xcel’s major payout to towns for lost property taxes
Xcel’s new Clean Energy Plan includes major payouts to the communities where coal plants are being shuttered. The agreement includes a payout to Pueblo County for 10 years of property tax payments on Comanche 3, since the company is now retiring the plant by 2030 instead of 2040.
Kenney described the payments as “community assistance payments” as consistent with Colorado law, so there is no implication with the Taxpayer Bill of Rights (TABOR).
How much will that total payment cost? That remains to be seen.
“The amounts that we will ultimately pay will be determined in the future just transition plan filing for each area,” Kenney said. “It will be based on an estimated property tax payment that would have been made if the plants have not closed early.”
The company also plans to give payments for shuttering the Hayden and Pawnee plants for Routt and Morgan counties. Those payments will cover six years of property taxes.
How Xcel will expand renewables
From shuttering its coal-fire plants, Xcel will lose 2,356 megawatts worth of total capacity. The company plans to replace that by aggressively upscaling its renewable energy-generated sources through a competitive bid process.
Under the new plan, the company will offset its loss in megawatt capacity entirely from wind projects alone.
Between 2021 and 2030, the company plans to add:
- Approximately 2,400 MW of wind
- Approximately 1,600 MW of large-scale solar
- Approximately 400 MW of energy storage
- Nearly 1,300 MW of firm dispatchable resources (available 24/7)
- Nearly 1,200 MW of distributed solar resources
The request for the proposal process will begin in the fall and cover Phase 2 of Xcel’s Clean Energy Plan, which will also need to be approved by the Public Utilities Commission.
“This will list all the resources that we have determined are the best fit to meet the needs of our communities at the least cost, or most reasonable cost, and the plan will go through the review process,” Kenney said.
Kenney said they’re not looking at the process as a profit or loss when asked if the company stands to make more money through the RFP process than it will lose in community assistance payments for shutting down plants.
How will the plan impact customer rates?
When asked if rates are expected to go up as a result of this plan, Kenney said “I don’t think we know yet.”
“I think it is too soon to know what the rate implications will be once we start getting in bids,” Kenney said.
How much of an impact does this make on Colorado’s climate goals?
A spokesperson for the Colorado Energy Office said, “The state’s climate strategy depends, in part, on utilities meeting and exceeding clean energy plan goals.”
Over time, Colorado has shifted its dependence on coal drastically as it accounted for more than 90% of the state’s electricity in 1990.
According to the Environmental Protection Agency, Xcel Energy’s three coal-fired plants were some of the top emission sources of metric tons of carbon dioxide in the state. Only the power plant in Craig poured more metric tons of carbon dioxide into the atmosphere. All three units of the Craig operation are scheduled to shut down by 2030.
Comanche, Pawnee and Hayden are the next top emitters in the state behind Craig, according to the EPA.
Xcel Energy is one of six utilities that operates more than 99% of Colorado’s fossil-based electricity generation, according to the energy office. Some companies have more ambitious emission reduction goals for 2030, but none have the scale of Xcel.
|Utility||2030 Emissions Reductions Goal|
|Platte River Power Authority||87%|
|Holy Cross Energy||99%|
|Colorado Springs Utilities||80%|
|Tri-State Generation and Transmission Association||84%|
|Black Hills Energy||90%|