Supplying electricity to modern society using the 20th century paradigm involves large expenditures of capital on centralized power plants that in Colorado run on coal and natural gas. While this paradigm is likely to change in the coming century, large amounts of money currently ride on the decisions made about existing fossil fuel infrastructure.
The Colorado Public Utilities Commission will soon decide whether to spend $380 million on pollution control for Xcel coal plants that are up to 40 years old, with some of the controls costing more than the current value of the coal plant.
We strongly favor cleaning up coal plants, but before committing Xcel customers to pay $380 million, we believe the PUC should carefully investigate whether retirement isn’t the better option for these aging plants.
Under the Clean Air-Clean Jobs bill, the PUC spent almost no time examining the decision to spend approximately $380 million on the Hayden plants west of Steamboat Springs and the Pawnee plant in Brush, northeast of Denver.
• Hayden 1 is a 45-year-old coal plant worth about $32 million to Xcel. Adding selective catalytic reduction for nitrogen oxide control is expected to cost about $67 million, or more than twice the existing value of the coal plant.
• Hayden 2 is a 34-year-old coal plant worth about $28 million. The SCR pollution controls would cost about $80 million.
• Pawnee is a 29-year-old coal plant worth about $238 million. The proposed pollution controls for nitrogen, sulfur and mercury are expected to cost about $236 million.
None of the pollution controls will reduce emissions of carbon dioxide, the primary greenhouse gas.
After adding pollution controls, Xcel’s intention would be to operate these coal plants until 2025, 2036 and 2041 respectively. Yet Xcel has lots of excess capacity, and its own experts have noted that adding pollution controls to coal plants makes it harder to add more renewable energy to their system.
According to Xcel’s top engineer, Greg Ford: “The addition of emission controls will make the coal units less responsive to operational change needs as startup will take longer, minimum load limits will have to be raised, and ramp rates be reduced to maintain operations within emission limits.”
The price of renewable energy is falling and the effects of climate change are becoming increasingly obvious. Should Xcel rate-payers be saddled with a large investment in old coal plants that keeps Colorado locked into last century’s polluting technology? In addition, the long-term coal supply for the Hayden and Pawnee plants is questionable with coal costs rising significantly in recent years.
The Wyoming mines that support the Pawnee plant also have short life spans and increasing production costs. Xcel claims that keeping the Pawnee plant operating will save rate-payers money, but they assume the price of coal only increases about 2 percent per year, while their actual coal costs have been increasing more than 10 percent per year.
Colorado needs to undertake careful planning for the future of its coal-dependent communities, but charging Xcel rate-payers to put expensive pollution controls on aging coal plants is not the way to provide for the future.
Micah Parkin is with 1Sky, a national climate and clean energy campaign. Diana Best is with Greenpeace. They wrote on behalf of the Ad Hoc Coalition for Clean Air and Sensible Rates.