The Post editorial: Xcel plan to move toward renewables is solid, but questions remain.»
Xcel Energy’s plan to close two aging coal-fired units and add more wind and solar generation is a promising opportunity to ensure that, by 2026, more than half of the electricity it provides Colorado will come from renewable resources.
It is all the more attractive because the company says it can do that while promoting $2.5 billion in clean-energy projects in rural Colorado — and saving its customers tens of millions of dollars. The caveat to the plan, which Xcel has submitted to the Colorado Public Utilities Commission, is that if it can’t beat the electricity cost of the coal-fired plants, it won’t go ahead with it.
Since 2010, Xcel has shuttered about 1,100 megawatts of coalfired power plants, and closing the Comanche 1 and 2 units in Pueblo, by 2025, would add another 660 megawatts to the list.
“We are very committed to decarbonizing when the technology and policy choices make it possible to do so,” said David Eves, president of Xcel’s Colorado subsidiary. “It’s all about the economics.”
While all this sounds good, the PUC has already, and rightly so we think, raised a series of questions about the plan, questions for which there are still no clear answers.
Commissioner Frances Koncilja has voiced concerns about the cost of the program and its impacts on the southern Colorado economy. Commissioner Wendy Moser is questioning whether the statutory process of electric-resource planning can just be torn up to accommodate this new plan. Moser described the Xcel proposal as “out of bounds.”
The fact that Xcel filed this agreement in the waning days of August and wants a decision from the PUC before year’s end places a burden on the commission. That is because there are no estimates yet about the cost to consumers of writing off the two units — even if it is buried in cost savings. Xcel has yet to give a figure. What will be the impact on Pueblo?
Closing the two units, leaving just one operating, will cut the Comanche station workforce, now 172, by more than half, and the property taxes on the facility, which were $19.6 million last year, could take a hit of $700,000 or more.
Xcel executives say that one of the gas-fired units could be located at the Comanche site, and construction of a new switching station could add to the tax base. The company has said it will also try to find jobs for displaced workers.
The utility and local officials are in discussions, and it is essential that any negative impacts be mitigated. A clean energy future is desirable, but not at the expense of a single community.
The plan would add 1,000 megawatts of wind, 700 megawatts of solar and 700 megawatts for natural-gas-fired generation. Some of it will be owned by Xcel, and some will come from contracts with independent power producers.
Driving the shift to renewables is the dropping price of wind and solar power. Between 2008 and 2016, the cost of wind power dropped 41 percent and solar dropped more than 50 percent, according the U.S. Department of Energy.
The competitiveness of the two has been bolstered by federal tax subsidies that are now being phased out and will expire in 2021. The Xcel plan and its urgency is also an effort to lock in some of those subsidies before they disappear.
Ultimately we agree with PUC Chairman Jeff Ackermann that while the concerns of his fellow commissioners are valid, the Xcel plan has “the makings of a significant opportunity.” But the PUC must force Xcel to prove it can move forward in a transparent and cost-effective way. The members of The Denver Post’s editorial board are William Dean Singleton, chairman; Mac Tully, CEO and publisher; Chuck Plunkett, editor of the editorial pages; Megan Schrader, editorial writer; and Cohen Peart, opinion editor.