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Confused about All Those HB 1365 Plans? Then This Post Is for You!

There are at least twelve HB 1365 plans being considered by the PUC, and it can get very confusing trying to follow them all. But don’t fret—I’ve done the work for you! Here’s a handy primer on the plans now in play.

HB 1365 Requires a Plan, Not Action

HB 1365, the Clean Air Clean Jobs Act, requires Xcel to propose a plan by August 15 2010 that would:

  • Meet “reasonably foreseeable” state and federal air quality regulations.
  • Achieve at least 70% reductions in nitrogen oxides emissions from at least 900 megawatts of coal fired power plants.
  • Be implemented by December 31, 2017

The PUC must approve, deny, or modify Xcel’s proposed plan by December 15, 2010, but only after the Department of Public Health and Environment (“CDPHE”) determines that the plan would meet “reasonably foreseeable” air quality regulations.

The legislation gives Xcel the right to withdraw its plan if it “disagrees with the [PUC’s] modifications.”

Xcel’s Preferred Plan

During the spring and summer months, Xcel formulated nine possible scenarios to comply with HB 1365. On August 13, after performing an economic analysis of the nine potential plans, the utility chose one—Plan 6.1E—as its preferred strategy. For a review of Plan 6.1 E, click here.

Naturally, different parties to the docket prefer different scenarios among the nine that Xcel considered. Gas producers, for example, support Plan 7E, because it uses the most gas. Coal producers back Plan 1, which would retrofit coal power plants with pollution controls rather than switch fuels to natural gas. The Governor supports Plan 6E, because it furthers his climate change goals.

Xcel’s Preferred Plan Hits the Wall

On September 29, the PUC vacated Xcel’s preferred Plan 6.1E due to the fact that it included actions that would occur after a December 31, 2017 implementation deadline established by HB 1365. Specifically, it would have waited until 2022 to replace at a 351 megawatt Denver coal plant, known as Cherokee 4, with new natural gas generation. On October 21, the PUC reaffirmed this decision.

Xcel Proposes New Implementation Plans

After the PUC tossed out its preferred scenario, Xcel last week proposed four alternative plans. The four alternative plans are similar. They all call for the retirement of four coal plants and top-of the line pollution controls for three others. A primary difference among them is their respective treatment of the 351 megawatt Cherokee 4 coal fired power plant located in northwest Denver. In particular,

  • Plan 5B would install top of the line nitrogen oxide controls at Cherokee 4 by 2017
  • Plan 6.2J would replace Cherokee 4 with new gas generation by 2017
  • Plan 6E FS would fuel switch at Cherokee 4 by 2017, and then replace it with a new gas plant by 2018
  • Plan 6.1E FS would fuel switch at Cherokee 4 by 2017, and then replace it with a new gas plant by 2022.

Everything Is in Play?

It’s still unclear which plans the PUC is considering. Last week, PUC Chairman Ron Binz said that, “there are in fact multiple plans being considered at the time,” without clarifying. At most, there are twelve scenarios (the original nine plus the three alternatives that Xcel proposed last week). Complicating matters further is the fact that Xcel has a veto over the PUC’s choice.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.