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New Generation Projects... Xcel Energy, Other Groups Unveil Colorado Energy Plan

Wed September 27, 2017 - West Edition #20
Construction Equipment Guide

Portfolio estimates are up to 1,000 megawatts of wind, up to 700 megawatts of solar and up to 700 megawatts of natural gas.
(Xcel Energy photo)
Portfolio estimates are up to 1,000 megawatts of wind, up to 700 megawatts of solar and up to 700 megawatts of natural gas. (Xcel Energy photo)

Xcel Energy filed a stipulation with a broad coalition of 14 diverse groups, asking the Colorado Public Utilities Commission (CPUC) to approve a process that 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. In order to accommodate cleaner energy generating resources for the state, the proposal also calls for the consideration of the early retirement of two coal generation units in southern Colorado.

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.

“We have a responsibility to meet our customers' energy needs. Our customers expect us to provide low-cost power and increase the use of cleaner energy. As the state's largest utility, it is important to us that we also support rural areas in Colorado, and this proposal's investment will accomplish this goal,” said David Eves, president, Xcel Energy — Colorado. “The proposal could increase renewable energy to 55 percent by 2026, save customers money, and dramatically reduce carbon and other emissions.”

Parties to the stipulation include Xcel Energy's Public Service Company of Colorado; the Colorado Public Utilities Commission staff; the Colorado Office of Consumer Counsel (OCC); the Colorado Energy Office (CEO); the City of Boulder; Climax Molybdenum Company; the Colorado Energy Consumers Group (CEC); the Colorado Independent Energy Association (CIEA); the Colorado Solar Energy Industries Association (COSEIA), Interwest Energy Alliance; Invenergy LLC; Southwest Generation Operating Company, LLC; Rocky Mountain Environmental Labor Coalition and Colorado Building and Construction Trades Council, AFL-CIO (jointly, RMELC/CBCTC); Vote Solar; and Western Resource Advocates (WRA).

“[This] 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. We ask the CPUC to consider this plan and welcome an open, collaborative conversation among all stakeholders to create our affordable, clean energy future.”

“The Colorado Independent Energy Association (CIEA) supports bringing forward a Colorado Energy Plan to allow more clean energy projects to come online sooner and applauds the company's use of a competitive bidding process that will result in low-cost options to achieve the plan's goals while keeping costs low for Colorado consumers,” said Mark Detsky, CIEA attorney. “The Colorado Energy Plan is an important step to implement the goals of Governor Hickenlooper's recent executive order supporting Colorado's clean energy transition.”

“Colorado has an historic opportunity to take advantage of renewable-generated electricity available through competitive market acquisitions at historically low prices, while investing in good-paying jobs and cleaner air,” said Sarah Cottrell Propst, executive director of the Interwest Energy Alliance. “Interwest is pleased to be part of such a broad coalition working toward a clean energy future and new opportunities for economic growth.”

“We are pleased to support the efforts of Xcel Energy to close coal plants, reduce carbon emissions, and move Colorado closer to a future where anyone can choose clean energy,” noted Rick Gilliam, program director for Vote Solar, a national solar advocacy organization.

“We hope this agreement will make more room for affordable clean solar energy on the Xcel Energy system, while protecting the rights of customers to generate their own solar energy and receive fair credit,” said Rebecca Cantwell, COSEIA executive director.

The Colorado Energy Plan supports “Our Energy Future,” launched last year by Xcel Energy — Colorado, a successful initiative to empower customer choice, power economic development and provide for the use of new energy technologies. The company also noted that its energy prices are competitive both nationally and in the states in which it serves. In the past four years, the average electric bill for Xcel Energy's Colorado residential customers has decreased by 6 percent, and this proposal will help keep Colorado electricity costs for consumers low and predictable.

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 soon 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.

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