Review of November 3 PUC Hearing on HB 1365
Primer on the Many Implementation Plans that the PUC Is Considering
Primer on HB 1365
Timeline of Implementation Plans
Study on the Dubious Foundations of HB 1365
Archive of HB 1365 Posts
Oped Last Week in Denver Daily News: Ritter’s Phantom Carbon Tax
Xcel Identifies Which Plans It Would Accept
As I noted this morning, HB 1365 gives Xcel the power to veto any of the twelve implementation plans being considered by the PUC. This afternoon, Xcel Vice President of Rates and Regulatory Affairs Karen Hyde identified those plans that are “off the table.”
Here are the plans that have been dropped.
- Plans 2A & 4C: Ms. Hyde said that Xcel would not consider these two plans because they both would install top of the line nitrogen oxides pollution controls on the 152 megawatt Cherokee 3 coal fired power plant northwest of Denver, instead of closing the plant down. According to Xcel, the pollution controls are less cost-effective than shuttering the plant. This is malarkey. The real reason that Xcel rejected Plans 2A and 4 C is that they only allow for 314 megawatts of replacement electricity generation powered by natural gas. The utility wants to build at least 650 megawatts of replacement generation, so that it can increase its share of the wholesale electricity market, at the expense of independent power producers.
- Benchmark Plan 1: This is the plan endorsed by coal interests. It would install pollution controls at eight coal fired power plants. Xcel has long indicated that it finds Benchmark Plan 1 unacceptable.
- Benchmark Plan 1.1: This is a version of Benchmark 1. It would install pollution controls at five coal fired power plants.
- Plan 6H: This is Western Resource Advocates’ plan. I discussed this plan in Saturday’s update. Like Benchmark Plan 1, Xcel has long indicated that it would reject WRA’s plan, due to reliability concerns.
Here are the plans that are in play.
- Plan 5B: This is Xcel’s new “recommended” plan, although the utility’s recommendation was decidedly lukewarm. It would shutdown Cherokee 1 (107 megawatt), 2 (106 megawatt), 3 (152 megawatt) and Valmont 5 (187 megawatt) coal fired power plants; install top of the line nitrogen oxides controls at Cherokee 4 (352 megawatt), Pawnee (505 megawatt), Hayden 1 (139 megawatt) and 2 (98 megawatt); fuel switch at Arapaho 4; and build a 650 megawatt 2×1 combined cycle natural gas plant at the Cherokee site.
- Plan 3B: This plan is identical to 5B, except that it would install top of the line nitrogen oxides controls at Valmont 5, instead of closing it.
- Plans 6.2J, 6E FS, 6.1E FS: These are three iterations of Xcel’s preferred plan that the utility offered last week. Xcel prefers these plans because they are the most capital intensive and the more it spends, the more Xcel makes. All of these plans call for the construction of 960 megawatts of replacement generation.
- Plan 7E: This is the gas producer’s preferred plan, which I discussed on Monday. Xcel likes this plan for the same reason that it likes Plans 6.2J, 6E FS, and 6.1 E FS—it allows the utility to build 960 megawatts of replacement generation.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.