Colorado utility regulators removed constraints on running Xcel Energy’s Comanche Unit 2 coal-fired power plant, which was scheduled to close at the end of 2025, but was given new life when Unit 3 broke down.
The move approved by the Colorado Public Utilities Commission last week was opposed by environmental groups concerned about the additional greenhouse gas emission from the coal plant in Pueblo.
“It’s disappointing that Xcel Energy and state agencies under Gov. (Jared) Polis asked the PUC to remove reasonable limits on Comanche 2, an old coal-fired power plant that wasn’t supposed to operate at all after 2025,” Margaret Kran-Annexstein, director of the Colorado Sierra Club, said in a statement.
“This means Colorado ratepayers and taxpayers are funding utilities and state agencies to make arguments to undermine state climate goals and increase air pollution,” Kran-Annexstein said.
In December, the Colorado Public Utilities Commission agreed to extend the 50-year-old Unit 2’s operations after Unit 3 suffered turbine damage and is not expected back online until June.
“Unit 2 is a very old and inefficient plant that’s one of the reasons we were closing it in 2025, but 3 breaking is why we are keeping it open,” Commissioner Tom Plant said.
Colorado wants to close all six of its remaining coal-fired power plants in the next six years to cut the utility sector’s greenhouse gas emissions 80%, as required by state statute. Comanche 2 was set to close in 2025, Comanche 3 in 2031.
Comanche 3, Xcel Energy’s largest and most expensive plant at $1.3 billion, went online in 2010, but has been riddled with breakdowns and operating problems. It has been shut down for repairs for more than 900 days over its lifetime.
The most recent outage started Aug. 12 when “elevated vibrations” caused “notable damage” to a turbine. Xcel Energy estimates that it will take until June to repair the unit.
When PUC approved extending Comanche 2 operations to ensure adequate generating capacity while the 750-megawatt Unit 3 is repaired, it put a limit on how much the two units could generate — 3.9 million megawatt-hours for the year.
Xcel Energy filed for a rehearing and reconsidering of the commission’s order arguing that the limitations on Comanche 2 created operating challenges and could lead to added costs.
The company was supported in its request by the Colorado Energy Office, the Colorado Office of Utility Consumer Advocate, and the PUC staff.
The commission voted to remove Comanche 2 from the generating cap but left it in place for Comanche 3, on a prorated basis, so that if it came online in June it could generate half the annual cap.
“Keeping constraints on Comanche 3 is important,” Commissioner Chairman Eric Blank said.
The basic issue is that it is not easy to ramp up and down the old coal-fired plant. “Unintended consequences of the operational limitation could result in significant costs being imposed on ratepayers,” the state agencies said in a filing.
“Unit 2 is so antiquated and difficult to ramp,” Commissioner Megan Gilman said. “If unit 2 is being operated uneconomically that is a concern. … It can’t be ramped the way a more modern plant could.”
Removing Comanche 2 from the cap doesn’t mean that it will operate at full capacity. There will be market constraints as Xcel Energy must first use the most economical generation to meet demand.
“The outcome was not what we wanted,” said Eric Frankowski, executive director of the Western Clean Energy Campaign. “They found the reasons to loosen the reins on the plant.”
“Xcel runs a risk of the costs (for the coal plant) being denied by the commission if there is more economical generation out there,” Frankowski said. Cost recovery depends upon using the most affordable resources first, which are often wind and solar.
The commission also loosened reporting requirements for the cost of repairs to Comanche 3, but made it clear that whether those expenses will be approved for cost recovery from customers will be determined in the future.
“This is at the company’s risk,” Gilman said.