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Cost of wholesale electricity nearly doubled for Colorado co-op suing Xcel Energy, its partner in Comanche 3

CORE, which owns a 25% stake in the troubled unit, wants to be reimbursed for costs related to the 700 days the Pueblo plant has been offline since 2010.

Xcel Energy's $1.3-billion 750-megawatt Comanche 3 coal-fired unit, shown here in a Jan. 26, 2020, photo, went into operation in 2010. It's the state's largest coal-burning power plant. (Mike Sweeney, Special to The Colorado Sun)
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A suburban Front Range electric cooperative is suing Xcel Energy, seeking millions of dollars for breach of contract and mismanagement of the Comanche 3 power plant, of which the two companies share ownership. 

CORE Electric Cooperative is seeking damages for repairs to the damaged plant it was forced to pay for and for the extra $20 million in replacement power CORE was forced to buy from Xcel. The co-op, previously known as Intermountain Rural Electric Association, serves suburban and rural areas from south of Castle Rock to north of Aurora, 

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“We would not have done what we did today unless we thought it was absolutely necessary to protect our members’ interests,” Jeff Baudier, the co-op’s CEO, said in a video message.

The suit was filed against Xcel’s subsidiary, Public Service Company of Colorado, in Denver District Court Tuesday. Xcel is the state’s largest electricity provider. 

“We are still reviewing the documents and generally don’t comment on pending lawsuits,” Xcel spokeswoman Michelle Aguayo, said in an email. “That said, Xcel Energy remains committed to ensuring the safe, reliable operation of the plant through its proposed early retirement in 2040.”

The $1.3 billion Comanche 3 plant in Pueblo went into operation in 2010. Xcel, its operator, owns two-thirds of the plant, and CORE and Holy Cross Energy own the remainder.

“When we entered in as partners…,” Baudier said, “Xcel, as the operator of the plant made certain promises to us and we relied on those promises and one of those reliances was we’d get our share of power out of the plant. Well, that really hasn’t happened.”

CORE owns 25% of the plant and when it is in full-operation the co-op gets more than half its electricity from it, but since the 750-megawatt plant went online it has been plagued with more than 700 days of unplanned shutdowns.

It was closed for all of 2020 and part of 2021. That failure led to a Colorado Public Utilities Commission investigation.

The investigation found that two separate incidents shut down the plant in 2020 and that poor design, maintenance and inadequate communication between the control room and the operation staff contributed to the unit’s failure.

Repairs for the first incident cost $4.2 million and the cost of the second was $30 million, according to the complaint.

“Because of the numerous and lengthy outages at Comanche 3 since it began commercial operation, CORE has suffered millions of dollars in damages,” the lawsuit said. “CORE has spent millions of dollars in additional repair and maintenance costs that were incurred only because of PSCo’s imprudent utility practices and other breaches of the project agreements.”

CORE said in the complaint that not only was it liable for its share of repairs, but also had to pay its share of facility costs, such as insurance.

Under its agreement CORE was required to buy the replacement electricity it needed from Xcel for $38.5 million, an estimated $20 million above what the co-op anticipated from Comanche 3.

“It boils down to nonprofit rural electric cooperative standing up for our members,”  CORE spokesman Josh Liss said. “We tried to negotiate many different business solutions. After exhausting every effort with Xcel, we thought that this was a necessary step.”


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