County commission discusses Xcel plan
September 21, 2010
If you go
What: Colorado Public Utilities Commission public comment hearing
When: 4 to 6 p.m. Thursday
Where: PUC offices, 1560 Broadway St., in Denver, Suite 250, hearing room A
• The PUC will hear public comment on Xcel Energy’s emission reduction plans required by Colorado House Bill 10-1365. Anyone may comment to the PUC except those who have already testified. The PUC stated it will try to accommodate everyone hoping to speak.
Moffat County Commissioner Tom Mathers said he was pleased that an Xcel Energy representative came to meet with the commission Monday and discuss the company's emission reduction plans required by Colorado House Bill 10-1365.
The bill is also known as the Clean Air, Clean Jobs Act.
But, that doesn't mean Mathers is budging from his stance on the bill and the impacts Xcel's plans could have on the area, he said.
"Do I trust them?" Mathers said after the meeting. "No. I think this whole thing was underhanded from the start. We are going to battle it the best way we can. (The plans are) wrong, but we're pretty much backed into a corner here."
Mathers and the commission discussed the emission reduction plans with Fred Eggleston, area manager for community and local government affairs for Xcel, during a work session.
The commission discussed several topics at the work session, including the economic impacts the plans would have on the local economy, specifics of the plan,and other options Xcel considered before the plans were submitted to the state for consideration.
County attorney Jeremy Snow and county natural resources director Jeff Comstock joined the commission as they discussed what the plans could mean for Northwest Colorado.
According to a news release from Xcel, plans call for retiring 903 megawatts of coal generation at its 186-megawatt Valmont Station and 717-megawatt Cherokee station.
They also entail re-powering the Cherokee Station with 883 megawatts of natural gas generation and switching to natural gas generation at the Arapahoe Station's 111-megawatt unit four.
The plan also seeks to retrofit 951 megawatts of coal-fired generation at the 505-megawatt Pawnee Station and the 446-megawatt Hayden Station with "modern emission control technology."
The Colorado Public Utilities Commission is reviewing the plans and must issue a decision on them by Dec. 15, according to a news release from the PUC.
The main topic of the discussion during the work session, however, was the impacts the plans would have on energy consumers, if approved.
According to the Xcel release, the rate impact of the proposed plan is expected to increase consumer bills by 1 percent each year for 10 years.
However, Eggleston said the cost was later determined to be 1.5 percent annually over 10 years, amounting to about a 15-percent increase on consumers' bills.
He said that percentage does not include any potential price increases from the cost of burning natural gas over coal — something commissioner Tom Gray took issue with.
"The 1-percent figure, as we have already clarified, that's only to recover the capital investment in the switch," Gray said. "That is not the big cost to consumers. The big cost is that now you are hooked into a fuel that's anywhere from two-and-a-half to five times as expensive."
Gray said the 1-percent figure could be misleading as to the total cost of the plan to consumers.
"So they are going, 'Oh well, I can put up with that, what is the big deal?'" he said of consumers. "Or, 'It is just a few coal mining jobs in Moffat County.' Obviously, in Moffat County, we are concerned about those jobs, but the big picture politically and (with) public perception is that it is not 1 percent. It is 50 to 100 (percent).
"Ten years from now, they can expect the 15 percent from cost recovery plus the actual cost of fuel is going to be somewhere way up there."
Eggleston said the bill allows for Xcel to secure long-term contracts with natural gas providers, which could help with consumer bills.
"Up until now, we have never been able to go with long-term contracts on gas," he said. "We have been prevented by the PUC from doing that, so part of this bill allowed us to do that, which will help our overall fuel costs for natural gas."
Eggleston said the bill doesn't mean that Xcel is switching all power plants to natural gas in the future, but gas is "with our mix."
"Right now, we do not see when coal should ever drop below 50 percent of our fuel (use)," he said.
Eggleston also addressed concerns of where the gas for the plan would be produced, but said that Xcel did not specify where it would come from when the bill was developed.
The production location of the natural gas is up to the company Xcel contracts with, Eggleston said.
"It may come from Louisiana," he said.
Comstock asked Eggleston how Xcel believes the PUC can adopt a plan that hasn't analyzed the economic impacts to communities.
Comstock said the plan "seems pretty flawed to me" and "mathematically, it doesn't add up."
"It doesn't address the 3 to 4 million tons of coal that come out of Colorado that won't be coming out of it anymore," he said. "It doesn't address the economic impact to, basically, the Western Slope."