Colorado Clean Air - Clean Jobs Plan

In late 2010, the Colorado Public Utilities Commission approved an emissions reduction plan for Xcel Energy under the state's Clean Air-Clean Jobs Act.

The plan calls for us to:

• Retire 593 megawatts of coal-fired generation, including the coal-fired unit at Valmont Generating Plant in Boulder, Colo., Arapahoe Plant Unit 3 and three coal-fired units at Cherokee Generating Plant in Denver
• Replace retired generation with a new, cleaner 569-MW natural gas plant built on the Cherokee site
• Switch a fourth unit at Cherokee Plant and Arapahoe Unit 4  from using coal to natural gas
• Reduce emissions from 951 MW of coal-fired generation by installing modern emissions controls

The entire effort is expected cost about $1 billion and is estimated to have an average annual rate impact over the next 10 years of approximately 2 percent. We expect to reduce nitrogen oxides by about 86 percent, sulfur dioxide emissions by 83 percent and mercury emissions by 82 percent from the plants included in the plan. Across our Colorado power plant fleet, we will reduce carbon dioxide emissions by about 28 percent, exceeding the state’s carbon dioxide reduction goal of 20 percent by 2020.

The University of Colorado Leeds School of Business forecasts the project will have a total economic impact of about $590 million on the state of Colorado between 2010 and 2026, resulting in about 1,500 jobs at the peak of construction.

Work is underway to implement our emissions reduction plan. In addition to authorizing the overall plan, the Colorado Public Utilities Commission has approved individual regulatory applications for the new 569-MW combined-cycle natural gas plant and the emissions-control retrofit projects at Pawnee and Hayden generating plants.

The synchronous condenser was successfully installed on Cherokee Plant Unit 2―on schedule and under budget. In addition, work has started at Cherokee Plant to make room for construction of the combined-cycle natural gas plant. Cherokee Unit 2 was shutdown Oct. 15, 2011, and Cherokee Unit 1 ceased operation on May 1, 2012. Partial demolition of these two units is now in progress. Starting Oct. 1, 2012, we will dismantle in sections the chimney or "stack" shared by Units 1 and 2. This work is expected to take about six to eight weeks.

Siting and permitting efforts continue for a new pipeline needed to deliver natural gas to Cherokee Plant as part of its conversion. We are proposing to construct approximately 34 miles of new, 24” steel gas transmission pipeline from a new Fort Lupton, Colo., gas metering facility to the plant. Construction on the new natural gas pipeline would begin in 2013 with an anticipated in-service date of Oct. 1, 2014.

Watch a video of the cooling tower demolition at Cherokee Station.

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We worked with a coalition of policymakers and legislators to support the passage of Colorado's Clean Air-Clean Jobs Act—state legislation enacted in spring of 2010 that requires regulated utilities, like Xcel Energy, to work to reduce emissions from coal-fired power plants. It was prompted in part by the likely possibility of federal intervention into air regulation in the Denver metro area, due to the area’s non-compliance with multiple pending air mandates. Without the legislation, the U.S. Environmental Protection Agency (EPA) could unilaterally mandate a compliance program for the state in early 2011.

Under the act, we were required to propose a multi-year plan to reduce our emissions of nitrogen oxides by 70 to 80 percent or greater from 900 megawatts of coal-fired generation by 2018 and meet “reasonably foreseeable” environmental requirements.

In meeting the requirements of the legislation, our objective was to develop and advocate for potential emissions reduction plans that would provide clean, reliable power, without burdening customers with enormous costs. We studied hundreds of options and proposed multiple scenarios for the Colorado Public Utilities Commission to decide the best option. After reviewing thousands of documents, conducting weeks of hearings and listening to the more than 30 parties that participated in the process, the commission selected a plan. We believe the approved plan:

• Was the result of an extensive and fair process
• Results in significant emissions reduction
• Meets the state’s federal air quality challenges
• Provides for a diverse mix of energy resources and continued electric reliability
• Retires aging coal-fired plants
• Produces all these benefits at a low cost to customers

Once the Public Utilities Commission approved the overall plan, we were required to submit regulatory applications for Certificates of Public Convenience and Necessity for individual projects in the plan, including:

• Cherokee synchronous condenser (filed March 9, 2011)
• Demolition of Cherokee Units 1 and 2 (filed April 9, 2011)
• Pawnee emissions controls (filed April 11, 2011)
• Cherokee natural gas combined-cycle plant (filed July 15, 2011)
• Hayden emissions controls (filed November 14, 2011)