CORE Energy, the state’s largest electric cooperative, has won a $26.5 million judgment in Denver District Court against Xcel Energy for breach of contract and mismanagement of the Comanche 3 power plant.
The co-op, previously known as the Intermountain Rural Electric Cooperative, had sought as much as $250 million in damages and relief, including the cost of its share in the plant.
“Although CORE asked for more than $250 million, the jury largely rejected its claims,” Xcel Energy said in a statement.
The investor-owned utility, Colorado’s largest electricity provider, said it intends to file post-trial briefs asking the court to correct some “significant errors of law” that affected the trial and will appeal if necessary.
CORE said it will work to preserve the verdict. The co-op said it will file its own post-trial motions “to correct errors of law which resulted in a verdict that did not fully recognize the relief to which CORE is entitled.”
The cooperative, which serves 176,000 homes and businesses in an area stretching from west of Colorado Springs to east of Aurora, owns 25% of the $1.3 billion Comanche 3 power plant in Pueblo.
Out-of-service plant cost CORE $50 million
When Comanche 3, a 750-megawatt unit with advanced supercritical pulverized coal technology, is in full operation it provides CORE with half its electricity.
Comanche 3, however, has been plagued by outages, averaging 91 days of unplanned shutdowns a year since the unit went online in 2010 — the worst reliability record of any of Xcel Energy Colorado’s generation facilities, according to the CORE lawsuit.
Xcel Energy’s subsidiary Public Service Company of Colorado owns two-thirds of Comanche 3 and operates the unit. Holy Cross Energy owns the remainder. The plant is scheduled to close by 2031.
When Comanche 3 was out of service, CORE said, it was forced to pay its share of more than $30 million in repair costs for the unit and spend an extra $20 million for replacement power. CORE filed its lawsuit seeking damages in 2021.
“This verdict will at least partly compensate CORE for damages caused by the systemic failures of Xcel to prudently operate Comanche 3, which negatively impacted our member-owners,” CORE CEO Jeff Baudier said in a statement. “We look forward to moving on from this lawsuit as the next step in our independent power future.”
The outages, CORE contended, were the result of poor maintenance and operating practices, as well as mismanagement. The unit was closed for all of 2020 and part of 2021.
“Between 2010 and 2020, many of Comanche 3’s unplanned outages were caused by boiler tube leaks and equipment replacements, which in turn were caused by PSCo’s imprudent utility practices and failure to maintain proper water chemistry,” the lawsuit said.
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A 2021 report by the Colorado Public Utilities staff also cataloged a string of equipment failures and outages at the unit and calculated it had suffered 700 days of unplanned shutdowns since opening.
“The permanent damage to Comanche 3 that has resulted from PSCo’s misconduct will cause excessive repair and maintenance costs and unplanned outages resulting in CORE’s loss of its entitlement to power to continue in the future,” the CORE complaint said.
CORE also said that the poor maintenance and operation of the unit has diminished its value. The co-op has also sought to pull out of its share of Comanche 3.
“The evidence showed CORE began looking for a way to recoup its investment in the Comanche 3 power plant once it became clear Colorado was moving towards stronger environmental goals,” Xcel Energy said in its statement. “We tried to work with CORE to navigate these policy changes, but they decided to pursue this lawsuit instead.”
CORE has already announced it will end its contract for electricity from Xcel Energy in 2026.
The cooperative has signed a 20-year contract with Invenergy, a multinational power project developer, to provide electricity, including 400 megawatts of new solar and wind energy and 100 megawatts of battery storage, backed up by 300 MW of existing natural gas resources starting in 2026.
The cooperative also signed a contract for some extra natural gas-fired generation with Onward Energy and is negotiating for additional renewable energy capacity, according to Steve Figueroa, the co-op’s commercial operations director.
“Taking a share of Comanche 3 was probably the biggest mistake CORE ever made,” Figueroa said in an interview in October.