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Xcel Energy agrees to close Pueblo’s Comanche 3 coal plant by 2031

The closure of the Comanche 3 plant — Colorado’s largest source of greenhouse gas emissions — would be the end of coal-fired electricity in the state

The Comanche Generating Station in Pueblo on Oct. 21, 2021. (Mike Sweeney, Special to The Colorado Sun)
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Xcel Energy, under prodding from environmental groups and state regulators, is offering to close its Comanche 3 power plant — the largest coal-fired unit in Colorado — by 2031, putting an end to coal-fired electricity in the state.

The $1 billion Comanche 3 unit, in Pueblo, went online in 2010 boasting advanced supercritical pulverized coal technology, but it has had a checkered history of breakdown and outages.

It is also the largest source of greenhouse gas releases in Colorado, emitting 465,000 tons of carbon dioxide in 2019, according to the Environmental Protection Agency.

Xcel Energy had initially proposed closing the plant in 2040 as part of its Electric Resource Plan now awaiting approval by the Colorado Public Utilities Commission. 

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Under a settlement agreement with some of the parties, such as the state Utility Consumer Advocate, assessing the plan, the date was moved to 2035.

When the settlement was reviewed by the PUC earlier this month it ran into stiff criticism from the commissioners, who still weren’t satisfied with the closure date.

“I am skeptical that we can find in total the settlement agreement is in the public interest,” Commissioner Megan Gilman said. “The retirement date of Comanche hasn’t met the burden to show that it is in the public interest.”

The settlement was also opposed by environmental groups, such as the Natural Resources Defense Council and Western Resource Advocates.

“It was apparent by the initial deliberations that the commissioners had concerns with the settlement,” said Gwen Farnsworth, managing senior policy adviser at WRA. “That ignited some urgency on Xcel’s part to revisit the settlement” with groups that had agreed and those that had not.

Both WRA and NRDC have signed onto the revised settlement that would close Comanche 3 by the end of 2030.

“Natural Resources Defense Council objected to the initial proposed settlement, but this new agreement addresses our concerns — including the speedier phase-out of coal powered generation,” Noah Long, NRDC’s western energy director of NRDC, said in a statement.

The new settlement, which will need PUC approval, also includes interim targets for Xcel cutting its greenhouse gas emissions — 50% over 2005 levels in 2024 and a 65% reduction in 2027.

“This will provide more clarity on performance,” Farnsworth said.

Xcel said it expects to have an 85% reduction in emissions over 2005 levels in 2030. State law requires an 80% cut.

The 750-megawatts Comanche 3 was slated to run until 2070. Two other coal-fired units at the Comanche plant are scheduled to close in 2022 and 2025.

Even when the company unveiled its 2018 plan to cut carbon dioxide emissions by 80% in the eight states in which it operates and generate zero-carbon electricity by 2050, there were still hopes of keeping Comanche 3 running.

Xcel’s Jackson has called Comanche 3 a “wonderful baseload unit” and said it was “cost effective for our customers.” Comanche 3, she said, might be a candidate for technology that removes carbon dioxide from the smokestack to be stored or recycled.

A 2021 report by the Colorado Public Utilities staff, however, cataloged a litany of equipment failures and outages at the unit and calculated it had suffered 700 days of unplanned shutdowns since opening.

When planned shutdowns were added, the unit was offline for more than 1,000 days — about one quarter of its life. The plant went down again on Jan. 28.

The report also calculated that rather than being cost effective, the cost of each megawatt-hour generated was $66.25 — 45% more than forecast and the annual operating costs were 44% higher than projected at $34.8 million a year.

A string of state laws, starting with Senate Bill 1261 in 2019, have targeted electric and gas utilities as a key source of greenhouse gases, seeking an 80% cut in emissions. The law set a statewide goal of reducing carbon emissions 50% by 2030 and 90% by 2050.

Xcel has 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 megawatts (MW) of generating capacity.

The company’s only other coal-fired plant, Pawnee Generating Station near Fort Morgan, will be converted to natural gas by 2025.

The lost generation will be replaced, under the company’s resource plan, with approximately 2,400 MW of wind generation, 1,600 MW of utility-scale solar and 400 MW of energy storage.

Xcel will also look to add 1,300 MW of “dispatchable resources,” most likely natural gas-fired plants. One of the other concessions Xcel made was to model the life of these gas units at 25 years rather than 40.

To soften the impact on Pueblo County of the loss of tax revenues from the closure of the Comanche plant, Xcel had initially agreed, as part of Just Transition funding, to provide six years of continued tax payments. Since the closure date has been moved up the company has agreed to 10 years of payments.

“Xcel is setting an admirable standard for utility support for the communities and workers who are affected by the transition away from coal,” Wade Buchanan, director of the Colorado Office of Just Transition, said in a statement. “By committing to transition all affected workers, completely avoiding layoffs and providing substantial property taxes when they close these plants, Xcel will give a major boost to the economic transition in places like Hayden and Morgan County and Pueblo.”


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