Doesn’t anyone remember the summer of 2008 when natural gas prices spiked to $8 dollar/mmbtu? Currently, coal supplies almost 70% of Xcel’s electricity portfolio; In 2018, thanks to the Clean Air Clean Jobs Act, coal will supply less than half, while natural gas’s share will increase to more than 40%. The upshot is that Xcel customers will be on the hook for a lot more natural gas. In addition to costing more than three times coal, natural gas prices historically have proven much more volatile than coal prices.
- $210 million
Doesn’t anyone remember when Xcel energy spent $210 million on state-of-the-art sulfur dioxide pollution controls on Cherokee 2, 3, and 4 in 2001? Last week, the PUC approved an HB 1365 implementation plan that would retire these plants early, despite the $210 million pollution controls installed nine years ago. The upshot is that Xcel ratepayers are now on the hook for the full cost of these capital expenditures, for which they received only half of the value (due to the early closure of these plants). That’s a waste of roughly $100 million.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.