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Preview of October 27 PUC Hearings on HB 1365: Everyone Gets a Swing at Xcel's New Plans

Very Brief Refresher on Xcel’s New Plans

Xcel on Monday proposed four alternative plans to comply with HB 1365, after its original plan was rejected by the PUC last Thursday. 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. 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.

Click here to see a timeline of Xcel’s HB 1365 implementation plan.

2 PM Today is the Deadline for Parties To File Arguments on Whether the PUC Should Accept or Deny Xcel’s Alternative Plans

As I noted on Tuesday evening, no one is happy with Xcel’s new strategy, including Xcel, so the motions are mostly negative. By last night, almost all motions were filed. Here’s a quick breakdown of who is arguing what:

  • The Governor’s Energy Office “strongly opposes [Xcel’s] recommended scenario (Plan 5B) as imposing unacceptable risk to ratepayers.” Nonetheless, it argues that the PUC should accept and consider the alternative plans.
  • The Office of Consumer Counsel “has serious concerns regarding [Xcel’s] Supplemental Direct Testimony (that’s legalese for ‘four alternative plans’). Specifically, the OCC argues that Xcel’s two fuel switching plans (Plans 6E FS and Plan 6.E FS) should be disqualified for including implementation actions that would occur after a December 31, 2017 deadline set by HB 1365.
  • Natural gas producers (EnCana and Chesapeake) request that the PUC “DENY” the plan that would keep the 351 megawatt Cherokee 4 power plan running on coal (Plan 5B), but they request that the PUC “ACCEPT” the other three plans that would necessitate a conversion to natural gas (Plan 6.2J, Plan 6E FS, and Plan 6.1E FS). That is, natural gas producers reject the coal plan, and they support the three natural gas plans.
  • Peabody Energy, a major coal producer, rejects the whole lot.
  • The Colorado Independent Energy Association, a group of independent electricity generators that compete with Xcel on the wholesale electricity market, argues that the PUC should reserve judgment on whether or not to consider the alternative plans, until Xcel agrees to perform an economic model with inputs provided by the CIEA.
  • The PUC staff has “serious procedural, due process, and practicality concerns with the additional plans submitted.” It recommends that the PUC “whittle down the four newly filed scenarios” in order to simplify proceedings.

The CDPHE Has Yet To Determine Whether the Two Fuel Switching Plans Comply with HB 1365

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.

On 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).

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