No One Is Happy with Xcel’s New Plan, Including Xcel
Not a single stakeholder readily supports Xcel’s new recommended strategy to comply with HB 1365 (Plan 5B). The utility offered the plan “reluctantly.” Coal interests immediately filed suit to disallow consideration of Plan 5B. Green Governor Bill Ritter can’t approve of the plan because it ignores the Governor’s Energy Office request that a 351 megawatt Denver coal plant, known as Cherokee 4, retire by 2017, in order to further Ritter’s Colorado Climate Action Plan. Of course, environmentalists are upset with a strategy that keeps a coal plant open. Independent power producers—electricity generators that compete with Xcel generators on the wholesale electricity market—are shut out of Plan 5B, just as they were shut out of Xcel’s original Plan 6.1E.
It’s amazing that Xcel’s new Plan 5B has engendered so much opposition, considering that it hasn’t even been filed. As of tonight, a detailed account of 5B has yet to be posted on the PUC docket. Last Thursday, Friday, and all Monday, Xcel promised to file an alternative plan by Monday at 5 PM. Instead, it issued testimony from three Xcel witnesses.
Xcel’s Four New HB 1365 Implementation Plans
Here’s a quick review of the four alternatives to its preferred plan that Xcel proposed today. All four plans call for the retirement of four coal plants near Denver (Cherokee 1,2, 3 and Valmont) and top-of the line pollution controls at three other plants (Hayden 1, 2 and Pawnee). The primary difference among them is their respective treatment of the Cherokee 4 coal fired power plant. In particular,
- Plan 5B: install top of the line nitrogen oxide controls at Cherokee 4 by 2017
- Plan 6.2J: replace Cherokee 4 with new gas generation by 2017
- Plan 6E FS: fuel switch at Cherokee 4 by 2017; then replacement with new generation by 2018
- Plan 6.1E FS: fuel switch at Cherokee 4 by 2017; then replacement by 2022.
My Take: There’s Not Enough Time
Normally, a major resource acquisition plan, such as the one mandated by HB 1365, would take years for the PUC to consider. For example, the PUC deliberated Xcel’s last Electric Resource Plan for almost three years. Yet HB 1365, which was enacted in April, requires Public Utilities Commission to decide on Xcel’s implementation plan by December 15.
Xcel’s original plan, filed in August, was rejected last Thursday by the PUC. Today, Xcel put forth four possible replacement plans. There will have to be a round of direct testimonies, then rebuttal testimonies, and then cross examinations.
Getting all this done responsibly by December 15 would be an impossible task, even if all parties supported the goals of HB 1365. In fact, many parties are dead set against HB 1365, and they have every incentive to muck up the deliberations. Consider Peabody Energy, a major coal producer. HB 1365 is a bill that effectively mandates fuel switching from gas to coal. It is an existential threat to Peabody, so Peabody has nothing to lose. This was evident today. The Peabody lawyer’s cross examination of Paul Tourangeau, Director of the Air Pollution Control Division, was an attempt to justify a lawsuit under the Administrative Procedures Act. These are scorched earth tactics.
This morning, PUC Chairman Binz warned against maneuvers to delay the proceedings. He said, “Don’t play games with us.” Of course, the lawyers will play games, and there is nothing Binz can do to stop them.
The big losers are the ratepayers. This is a billion dollar resource plan, involving almost 1500 megawatts, and it is getting a shoddy review. Whatever the PUC’s chooses as an implementation plan, its flaws will become evident only after the fact.