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Preview of November 1 PUC Hearing on HB 1365

HB 1365 Primer
Archive of Posts on HB 1365 PUC Hearings
Policy Paper on Dubious Foundations of HB 1365

Crash Course on Xcel’s New HB 1365 Implementation Plans

[N.B. I am repeating this refresher on Xcel’s new plans because I think it’s a handy reference]

Xcel last week proposed four alternative plans to comply with HB 1365, after its original plan was vacated by the PUC on October 21. 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.

CDPHE Will Determine Today Whether Xcel’s New Few Switching Plans Are HB 1365 Compliant

Under HB 1365, the PUC must approve, deny, or modify Xcel’s proposed implementation 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. Last Tuesday, CDPHE witness Paul Tourangeau testified that Xcel’s recommended Plan 5B and Plan 6.2J would meet all reasonably foreseeable air quality requirements, but he said that his office was still assessing the two fuel switching plans (Plan 6E FS and Plan 6.1E FS). The CDPHE is expected to make its determination on the fuel switching plans today.

Ruling Expected on Accelerated Version of Xcel’s Preferred Plan

Last Thursday, the PUC staff requested that the PUC “whittle down” Xcel’s four new implementation plans, in order to make it easier to accommodate the very tight timeframe set by HB 1365. Specifically, the PUC Staff asked the PUC to excise Xcel Plan 6.2 J, an accelerated version of Xcel’s original, preferred plan, because it did not have the time to analyze it. At the strong urging of Commission Matt Baker, the PUC “tentatively” sided with the utility, and agreed to consider the new plan. However, a final determination on 6.2J is expected today.

Decision Due on Peabody’s Motion To Dismiss Proceedings

On Friday, Peabody Energy filed a motion for the PUC to dismiss the proceeding, “because to continue in its current posture would violate the Act (HB 1365, the Clean Air Clean Jobs Act), basic principles of due process, and the Commission’s own regulations.” The coal company argues that Colorado lawmakers intended for Xcel to submit one—and only one—proposal to implement HB 1365, which the utility did on August 13. This original plan, however, was scuttled by the PUC on October 21, because it violated a deadline in HB 1365. Thus stymied Xcel last week presented a new “recommended” plan in addition to three new alternative plans [see “Crash Course” at top]. Peabody contends that PUC would be acting arbitrarily by considering a second implementation proposal, due to the fact that the law only allows for one.

On Saturday morning, PUC Chairman Ron Binz indicated that the Commission would rule on Peabody’s motion by today.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute, a free market think tank in Washington D.C.