New report says why Comanche 3 a prime candidate for closing

Newest coal plant in the West has been closed for most of last year

Comanche 3 resumed operations on Jan. 13 after being off-line for much of the last year. It’s the newest and biggest coal plant in Colorado—but it shouldn’t have a long life, says a new report issued last week by the Institute for Energy Economics and Financial Analysis.

“The unit has broken down so often since it started operating in 2010 that it has been offline for a quarter of its life—extremely poor performance for a relatively new plant,” the report written by Seth Feaster says.

“The absence of the 750-megawatt unit and its failure to affect the steady delivery of electricity to customers adds to the argument that Comanche 3 should be shut decades before its planned 2070 closure,” he says.

Colorado Public Utilities Commission members last May indicated they planned to investigate that very question. They made it formal in October. The investigation is now underway.

Xcel Energy operates and owns two-thirds of Comanche 3. Two electrical co-operatives, Sedalia-based Intermountain Rural Electric Association and Glenwood Springs-based Holy Cross Energy own the balance. Holy Cross has consigned electricity generated by the plant to Guzman Energy.

Unlike the co-operatives, Xcel is answerable to the PUC. The PUC allows the investor-owned utility to recoup from customers through higher rates the expenses incurred in generating and delivering electricity. Last winter, Xcel wanted to recover $11.7 million to replace a failed piece of equipment called a finishing superheater. The PUC denied the charge at first, meaning that that owners of the utility would have to soak up the expense, but then in May allowed Xcel to recover the cost in the form of rates on customers. .

The costs of the failures of the last year—first in January and then after brief operations in late spring, again into 2021—have not been reported.

This is from the Jan. 28, 2021, issue of Big Pivots, an e-magazine tracking the energy transition in Colorado and beyond. Subscribe at bigpivots.com

Xcel in 2017 and 2018 became national news and a beacon for the clean-energy transition when the company rapidly began to pivot toward clean energy. It announced it would close the two older units at Comanche, which together total 660 megawatts of generating capacity, by late 2022 and late 2025. The lost generation will be replaced with wind, solar, and a small amount of natural gas, all this backed up with 275 megawatts of battery storage.

Xcel continues to pivot, announcing additional closures earlier this month of the two coal-burning units at Hayden. That will leave just two coal plants in Colorado operating in Colorado beyond 2030, according to current schedules: Comanche 3 and the 505-megawatt Pawnee plant near Brush. Xcel exclusively owns Pawnee.

In March, Xcel may fully play its cards. The IEEFA report notes a November presentation to the Edison Electric Institute that a March 31 filing with the PUC can be expected to “address remaining coal units in Colorado.”

A significant problem for Xcel is the remaining debt on these plants.

What the IEEFA fails to mention is the concept of securitization, a financial device approved by Colorado legislators that would allow Xcel Energy to use long-term financing backed by the state to close plants early. State Sen. Chris Hansen, the architect of the securitization clause in the law passed in 2019, says the tool absolutely could help Xcel make the pivot from either or both of these coal plants.

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Allen Best