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Colorado Clean Air - Clean Jobs Plan

Colorado Clean Air - Clean Jobs Plan

Our plan will produce cleaner air and better electric reliability at a low cost

Xcel Energy’s Approved 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 702 megawatts of coal-fueled generation, including the coal-fueled unit at Valmont Generating Plant in Boulder, Colo., Arapahoe Plant units 3 and 4, and three coal-fueled 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 from using coal to natural gas
  • Reduce emissions from 951 MW of coal-fueled 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. The project will contribute to a projected system-wide reduction in carbon dioxide emissions since 2005 of 35 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.

 

Plan Implementation

Work is well underway to implement our emissions reduction plan. The synchronous condenser was successfully installed on Cherokee Plant Unit 2―on schedule and under budget. In addition, Cherokee units 1 and 2 were retired in 2012 and 2011 respectively, and construction is underway on the new combined-cycle natural gas plant at Cherokee. Arapahoe units 3 and 4 also were retired at the end of 2013.

Construction also began in February 2014 on approximately 34 miles of new, 24” steel gas transmission pipeline from a new Fort Lupton, Colo., gas metering facility to Cherokee Plant. This pipeline work is anticipated to be finished in October 2014.

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

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Background on Colorado's Clean Air Clean Jobs Act

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.

Regulatory Process

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)

 

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Why do our products and services differ based on state? Because our business is regulated by state. We have regulated operations in eight Western and Midwestern states. The different regulatory body for each state we serve determines what products and services we deliver in that state.