Xcel Energy has proposed a plan that will significantly reduce Colorado coal-fired generation emissions by retiring, repowering or retrofitting several of its power plants as called for under the recently enacted state Clean Air Clean Jobs Act. The total costs, if approved by the Colorado Public Utilities Commission (CPUC), will cost $1.3 billion over the next 12 years.
The company expects that its proposal will save approximately $225 million when compared to the traditional approach of retrofitting all of these plants with emissions controls. Xcel says the savings compared to an all-controls approach would be more than $950 million if federal regulation sets a price on carbon dioxide emissions.
The proposal calls for the retirement of 900 megawatts (MW) of coal generation at its Valmont (186 MW) and Cherokee (717 MW) power plants by the end of 2017 and the end of 2022, respectively. The Cherokee power plant would be repowered with natural gas generation of 883 MW. The 111 MW Arapahoe unit four also will be switched to natural gas generation. The plan also includes emission control retrofits at the coal-fired Pawnee (505 MW) and Hayden (446 MW) plants.
Xcel’s plan is in response to a state law passed last spring that required the company to propose reductions in nitrogen oxides by 70 to 80 percent by 2017, to meet anticipated federal clean air regulations. The plan would reduce emissions of nitrogen oxides from the targeted plants by 75 percent at the end 2017, and by 89 percent at the end of 2022.
When compared to 2008 levels, the company also expects to reduce sulfur dioxide emissions by 84 percent and mercury emissions by 85 percent for the power plants targeted under the plan by 2023. The plan also allows Xcel Energy to meet Colorado’s statewide carbon dioxide reduction goal of 20 percent before the 2020 target.
The proposed plan is expected to increase future electricity bills on average by 1 percent annually over the next ten years, which is less than the company’s original estimate of four to six percent.
According to the company’s 2009 corporate sustainability report, Xcel is on track to reduce carbon-dioxide emissions 15 percent by 2020 from 2005 levels. The company has reduced its CO2 emissions by more than 11 percent from 2003 levels.