Mining association files motion to reconsider Xcel plans

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Colorado Mining Association President Stuart Sanderson said his organization is working to bring to light the “flawed process” behind recent legislation concerning the coal industry and coal-fired power plants.

“And flawed is really an understatement here,” said Sanderson, of the implementation of Colorado House Bill 10-1365, the Clean Air, Clean Jobs Act.

The two bodies that conducted that process, Sanderson said, were Colorado lawmakers and the Colorado Public Utilities Commission.

The latest mining association action requests the PUC to recall, reconsider and change plans developed by Xcel Energy to comply with the bill.

Those plans call for shutting down seven units of coal-fired generation at three Front Range power plants and re-powering some of them with natural gas.

“They have conducted a proceeding that is a sham,” Sanderson said of the PUC. “I would say that the chances of reconsideration are low, but we are taking the steps that are necessary … administrative steps as a precursor to any further action that may be taken.

“We are going to give them one more bite at the apple, so to speak, and an opportunity to do the right thing. But, no, I’m not at all hopeful.”

The motion for reconsideration of Xcel’s plans was filed early this month and authored by the mining association and the Associated Governments of Northwest Colorado.

Several other organizations have also filed for reconsideration of the plans, including the Colorado Independent Energy Association, the American Coalition For Clean Coal Electricity and Peabody Energy Corporation among others, according to records.

PUC spokesman Terry Bote said the PUC will review those motions at a weekly meeting Jan. 26.

Bote said any part of the plan could be changed or altered depending on the commissioners’ review of the materials as long the changes fit guidelines of the bill. Xcel still has the option to accept the PUC’s ruling or walk away from it entirely, Bote said.

The PUC will review the motions for “as long as it takes,” Bote said, before handing the plans over to Xcel for consideration.

“They will go through each of them and review them and make decisions,” he said. “It’s difficult to know at this point how long it will be, but however long it takes, that’s what they’ll do.”

The mining association and Associated Governments of Northwest Colorado motion makes several points as to why the PUC should reconsider the plans.

“(The) plan fails to result in job creation, will likely have significant negative economic impacts to the coal mining industry, and will likely result in the economic hardship for energy-producing communities in the state,” the motion reads.

Sanderson said the PUC has made a “mockery of due process.”

“This is not a model for Colorado and this should definitely not be a model for the nation,” he said. “These decisions should be studied carefully before committing Colorado to a course of action, which will result in much higher energy prices.”

The motion questions the meaning of the term “reasonably foreseeable requirements” contained in the bill pertaining to requirements of the federal Clean Air Act.

“The term ‘reasonably foreseeable’ is not defined in the (bill),” the motion reads. “Nor is it defined in any other state or federal law or regulation.”

The economic and environmental effects of the plan, the motion states, have not been adequately addressed by the PUC. The motion states the bill required the PUC to rule on Xcel’s plans in a way that addresses “the sound economic health and environmental conditions of energy-producing communities.”

The motion states the plan will “likely result in the loss of production of up to three (to) four million tons of Colorado coal a year and will have a direct, negative and irreparable impact on the Colorado coal mining industry, which could lead to job reductions in the thousands of jobs that support the Colorado mining industry.”

Also noted in the motion is that the coal-fired units shut down under the plan include Cherokee Station’s units one through four and Valmont Station’s unit five, which run exclusively on Colorado coal.

“Energy policy decisions should not be made behind closed doors,” Sanderson said. “They should be made with adequate opportunity for public review and consideration because the decisions will impact the next generation of Coloradoans, the people who rely on extractive industries in Northwest Colorado and rate payers.”

Xcel also filed for reconsideration for the plans, according to records.

Xcel spokesman Mark Stutz said the company’s motions focus on the closing dates of some of the coal fired units, cost recovery issues, and other details.

“We have some issues that we raised in our filings, but they are not issues that would prohibit us from moving forward with the project,” he said.

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Comments

GreyStone 3 years, 10 months ago

Feb 10, 2011 4:25pm EST By Jeanine Prezioso

NEW YORK (Reuters) - A narrowing gap between coal prices and cleaner natural gas is accomplishing in the short-term what U.S. regulators hope to achieve in the long-term -- forcing more power plants to burn gas instead of coal.

Coal prices hit a 26-month high last month as natural gas struggled to break $5 per million British thermal units, putting the two fuels at cost parity for U.S. Southeast power plants -- an unprecedented incentive to burn gas in the middle of the winter, when frigid weather normally makes coal the clear choice.

That may be only the start of a record year for power companies to make the switch in order to boost profits.

Unlike 2009, the last year in which widespread fuel switching became a factor for markets, the change could be more sustained in 2011 as utilities anticipate a looming carbon crack-down by the Environmental Protection Agency.

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