Construction on the southern-most portion of the 1,500-acre Bighorn Solar Project near Pueblo is underway. The 300-megawatt array, shown here in a Feb. 2, 2021 photo, is being built by Lightsource BP at a cost of $285 million. Xcel Energy will purchase the power from Lightsource BP then sell it to Evraz Rocky Mountain Steel to power their nearby steel mill. (Mike Sweeney, Special to The Colorado Sun)

Xcel Energy will spend $8 billion to double its renewable energy generation and storage and add new transmission lines, while closing all of its coal-fired power plants in Colorado by 2040.

The initiative, unveiled Wednesday, would reduce Xcel’s carbon emissions in Colorado 85% from 2005 levels by 2030. A state law requires regulated utilities to cut carbon emissions by 80% in the next 10 years.

The utility’s “Clean Energy Plan” will be submitted to the Colorado Public Utilities Commission at the end of March for review and approval. It builds on a plan Xcel adopted in 2018, which set a goal of generating 100% carbon-neutral electricity by 2050.

“The Clean Energy Plan is going to transform state energy policy in Colorado,” Xcel Energy CEO Ben Fowke said during a video conference.

Gov. Jared Polis, who also participated in the video conference, said “Xcel Energy is showing it can be done, this swift transition to renewables.”

Utilities across the country have been under increasing pressure from customers, shareholders, communities and governments to add more renewable energy and reduce carbon emissions, Fowke said. The change has also been spurred by the falling price of wind and solar generation. 

Xcel, Colorado’s largest electricity provider, was one of the first utilities to set ambitious goals for its service areas, which cover parts of eight states. It also was among the first in the nation to reach 10,000 megawatts of wind power.

The company has already announced the closure of four coal-fired units by 2028, and the new plan deals with the remaining two units: the Pawnee Generating Station in Brush, which would be converted to natural gas in 2028, and Comanche 3 in Pueblo, which would close in 2040.

There will be no layoffs, the company said, with plans instead relying on a combination of attrition, retirements and retraining to ease the transition.

“It is getting harder and harder to find opportunities for impacted workers,” Rich Meisinger, business manager of IBEW Local 111, which represents utility industry workers, said during the video conference.

You can’t just transfer them to another power plant,” Meisinger said. “The company and the union are working more closely than we ever have.”

The cost of the plan would be borne by customers and would add a sum to monthly bills about the same as the rate of inflation, Xcel-Colorado President Alice Jackson said in an interview with The Colorado Sun. The inflation rate in January was 1.4%.

All the investments would be made between when the plan is approved and 2030.

Xcel still will burn fossil fuels

The centerpiece of the plan is a dramatic increase in renewables and storage, adding approximately 5,600 MW of new capacity.

This includes 2,300 MW of wind power, 1,600 MW of large-scale solar projects and 400 MW of battery storage. Another 1,300 MW of distributed solar, such as community solar gardens, would also be added.

By 2030, 80% of all the electricity Xcel generates in Colorado will come from renewable sources, Jackson said.

The plan also calls for adding 1,300 MW of “dispatchable” resources, primarily natural gas and battery storage that can be turned up or down as needed to balance the wind and solar generation.

Jackson said the recent problems meeting electricity demand during frigid winter storms earlier this month, particularly in Texas, underscore the need for a diversified system.

“Customers depend upon the provision of safe reliable electricity every day.” Jackson said. To assure the viability of the system, Jackson said “balanced resources, diversified generating capacity and dispatchable resources” are needed.

Xcel had already announced the closure of four coal-fired units between 2022 and 2028 at its Pueblo and Hayden generating stations, shuttering a total of 1,200 MW of generating capacity.

The last two operating coal-fired plants, Pawnee and Comanche 3, account for another 1,255 MW of capacity.

Pawnee would still be a fossil fuel-burning plant, although burning natural gas emits about half as much carbon dioxide as burning a comparable amount of coal.

Comanche 3 is the largest coal-fired plant in Colorado and the single biggest source of carbon emissions in the state, according to federal Environmental Protection Agency data.

The $1.3 billion plant came online in 2010 and was originally slated to run to 2070. The 2040 closure date still drew fire from some environmentalists.

“While it’s great Xcel is investing in more clean energy and striving to hit carbon-reduction targets, Xcel remains the only Colorado utility with plans to burn coal past 2030, not to mention its new plan to burn fracked gas at the Pawnee Station,” Anna McDevitt, senior campaign representative for the Sierra Club’s Beyond Coal campaign, said in a statement.

In addition to softening the impact of the energy transition on workers, Fowke said the company is also set to work with the communities that will see a hit to their tax base and economies with the closure of the coal plants.

“We are doubling down on economic development efforts,” he said.

Early notification is intended to ease the impact of closures

Xcel said in a briefing paper that it makes decisions and communicates plant closures as far in advance as possible, providing time to “work with communities to find ways to mitigate impacts to tax base and other economic concerns.”

The Clean Energy Plan will form the core of the electric resource plan Xcel will submit to the PUC in March. Xcel must file a resource plan every four years, projecting electricity demand for the coming years and how the utility plans to meet it.

The commission evaluates the plan, holds hearings and may modify it. Jackson said she anticipates the process taking until the third quarter of 2022.

Erin Overturf, deputy director of Western Resource Advocates’ clean energy program, said there are several issues that may become points of discussion about the plan, such as whether the emission reduction schedule can be accelerated and the economic impacts on communities.

The plan will also play a large role in whether the state meets its 2030 carbon reduction targets under House Bill 1261, which set a goal of a 50% reduction in emissions over 2005 levels by 2030 and 90% by 2050.

“The Xcel plan is a huge down payment to achieve the 2030 goals,” Overturf said. “Moving away from fossil fuel in our utility sector is a cornerstone of meeting the goals.”

Another issue that may be raised, particularly in the wake of the rolling blackouts and near collapse of the grid in Texas, is reliability.

“Everyone has seen what happened in Texas,” Overturf said. “People who don’t spend a lot of time thinking about the electricity grid have a new appreciation of reliability.”

A network of power lines run south from the Comanche Power Plant in Pueblo on Jan. 19, 2019. Comanche is the state’s largest power plant, capable of generating over 1,400 megawatts. (Mike Sweeney, Special to The Colorado Sun)

Special to The Colorado Sun Twitter: @bymarkjaffe