An agreement announced Tuesday would close a coal-fired power plant with longstanding mechanical and operational problems early, ending Xcel Energy’s use of coal in Colorado by the start of 2031.
The agreement is between Xcel Energy-Colorado and several local governments, business, labor and environmental organizations.
The closure date of the Comanche 3 plant in Pueblo was a big point of contention as state regulators have considered Xcel Energy’s proposed energy resource plan. The company originally proposed shutting the chronically troubled plant by 2040 and then Dec. 31, 2034.
But several parties involved in the proceedings before the Colorado Public Utilities Commission said that wasn’t soon enough. Two of the commission members recently expressed concerns about how long Xcel Energy would keep the plant running.
Last week, the PUC postponed a hearing on the utilities resource plan to give the parties time to work out an agreement. Bob Frenzel, chairman, president and CEO of Xcel Energy, called the pact an “historic milestone” for the company.
Xcel Energy said in a statement that if regulators approve the resource plan, it will meet more than 80% of its customers’ energy needs with renewable sources by 2030 and cut carbon dioxide emissions by at least 85% from 2005 levels by 2030.
The revised settlement agreement also addresses concerns that Xcel Energy might build new natural gas plants that would outlive their usefulness as critics say coal plants have. The company would revise the modeling it uses to plan new energy sources.
“If approved, this settlement secures the next stage of Colorado’s energy transition, ensuring commitments from Xcel to reduce its harmful fossil-fuel emissions that contribute to climate change,” said Gwen Farnsworth, a managing senior policy adviser for Western Resource Advocates, a Boulder-based environmental group.
Xcel Energy submits an electric resource plan every four years to regulators. It projects the amount of electricity the utility will need and the sources it will use.
The agreement includes Xcel Energy’s plan to help employees and the Pueblo community make the transition after the coal plant is shut down by providing assistance. The company said Pueblo County will receive 10 years of property tax payments to compensate for the earlier retirement of Comanche 3.
Colorado lawmakers have set goals for reducing greenhouse-gas emissions and increasing the use of renewable energy to address the effects of climate change and improving air quality. The Polis administration’s goal is to have all the electricity on the state’s grid come from renewable sources by 2040.
Xcel Energy plans to start scaling back operations at Comanche 3 in 2025. Units 1 and 2 are scheduled to close by 2025.
Critics of keeping Unit 3 open have pointed to its long history of equipment and operation problems and argue it should be closed as early as possible because of economic, reliability and environmental concerns. A PUC report in 2021 said the unit has averaged 91.5 days per year of outages over a decade and was out of commission for all but a handful of days in 2020.
The company notified the PUC on Feb. 6 that it was disassembling the generator at Comanche 3 after incidents that damaged it. Xcel Energy said it expects the repairs to be completed in late April.
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