Minneapolis-based utility Xcel Energy (NYSE: XEL) on Friday announced a $1.3 billion plan to repower several Colorado power plants with cleaner burning options to respond the the state’s new Clean Air Clean Jobs Act.
The company’s plan has three key components. It plans to retire 900 megawatts (MW) of coal-fired power at its Valmont (186 MW) and Cherokee (717 MW) power plants by the end of 2017 and the end of 2022, respectively.
Also it will repower its Cherokee coal-fired power plant with natural gas generation of 883 MW. The company also will switch to natural gas generation at its 111 MW Arapahoe unit four.
And finally, it will retrofit about 950 MW of coal-fired generation at the Pawnee (505 MW) and Hayden (446 MW) power plants with modern emission control technology.
The Clean Air Clean Jobs Act passed last spring requires the company to propose reductions in oxides of nitrogen by 70-80% by 2017, to meet anticipated federal clean air regulations. The plan would reduce emissions of oxides of nitrogen from the targeted plants by 75% at the end 2017, and by 89% at the end of 2022.
The plan also allows Xcel Energy to meet Colorado’s statewide carbon dioxide reduction goal of 20% before the 2020 target.
Xcel publicly supported passage of the legislation.
The total cost of the plan, if approved by the CPUC, would result in new construction investment of approximately $1.3 billion over the next 12 years. The company expects that its proposal will result in savings of approximately $225 million when compared to the traditional approach of retrofitting all of these plants with emissions controls. The savings compared to an all-controls approach would be more than $950 million if there is federal regulation that places a price on carbon dioxide emissions.
“Over the next several years, the U.S. Environmental Protection Agency
will require the state of Colorado to comply with a series of regulatory
mandates unprecedented in the history of the Clean Air Act,” said Dick
Kelly, Xcel Energy chairman and CEO. “We believe our proposal is the
best way to meet new environmental requirements in a manner that
preserves reliability and minimizes customer costs.”
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