Xcel explores earlier closure of coal-fired unit

AP News
Posted: Oct 20, 2010 3:23 PM
Xcel explores earlier closure of coal-fired unit

Xcel Energy Inc. is studying what it would take to speed up its timetable for retiring some coal-fired power plants to help Colorado meet federal clean air standards.

A new state law required the utility to file a plan it would implement by the end of 2017 to reduce nitrogen oxide emissions.

Xcel's preference is to add emissions controls at some plants, retire some coal-fired generating units and switch others to run on natural gas by then, but it wouldn't shut down the coal-fired Cherokee 4 unit in Denver until 2022.

The Colorado Independent Energy Association has said Xcel's $1.3 billion plan is fatally flawed because it won't be fully implemented in time.

Xcel spokesman Mark Stutz said Wednesday that while the company still prefers to close Cherokee 4 in 2022, it is exploring the costs and feasibility of doing it by 2017. Xcel officials hope to have that review complete sometime next week.

Xcel has said its preferred plan would likely raise customers' electricity bills 1.5 percent, but retiring Cherokee 4 earlier would mean a bigger increase. The exact amount hasn't been determined.

The company has said the 2022 timeline also would allow for a smoother transition as it shuts down four coal-fired Cherokee units and replaces them with two units that run on natural gas.

The Colorado Public Utilities Commission has until Dec. 15 to decide whether Xcel's plan is acceptable. Ten days of evidentiary hearings are set to begin Thursday.

The PUC's staff has said Xcel's preferred proposal, with the 2022 closure of Cherokee 4, runs the risk of being appealed. Refusing to consider the plan, though, won't leave a lot of time to come up with a new one, the staff said.

At public meetings, miners and others tied to the coal industry have said Xcel's plan will cost them jobs while the natural gas industry and environmentalists touting the benefits of clean air have united behind the plan.

The Colorado Mining Association has asked PUC Chairman Ronald Binz and Commissioner Matt Baker to recuse themselves from reviewing Xcel's plan, saying they were involved in negotiations with Xcel and natural gas companies on the new emissions law and can't be considered impartial. The PUC could rule on the association's request Thursday.

Binz has said the commission is routinely involved in the legislative process and commissioners' actions were legal.

The new state law came about as Colorado works to come up with a plan by mid-January to reduce regional haze or run the risk of having the U.S. Environmental Protection Agency come up with one.

Because of the new state law, the PUC also is reviewing an emissions-reduction plan from Black Hills Energy to switch two coal-fired units to run on woody biomass or natural gas under the new state law. A public comment hearing on that plan is scheduled Nov. 22.