Comanche 3 Update

On June 6, 2006, Xcel Energy met the first important construction milestone at Comanche 3, the new 750-megawatt coal unit at Comanche Station in Pueblo, Colorado, with the completion of the unit's 500-foot stack. On going drilling of pier foundations for the boiler and air quality control equipment, access road upgrades and other construction activities continue on schedule.

Governor Bill Owens joined us last December to officially break ground on Comanche 3, which will go into service in the fall of 2009. Along with Governor Owens, local dignitaries and Xcel Energy executives joined the celebration, noting the future benefits of a reliable, cost-effective and environmentally sound electricity supply for Colorado.

The plant currently has two units that together have the capacity to produce 660 megawatts of electricity, enough power for more than 600,000 customers. The project is part of the company's least-cost resource plan that the Colorado Public Utilities Commission approved in December 2004. The plan recommends to the CPUC the most cost-effective mix of resources to meet customers' electric needs during the next decade and the plan to acquire those resources.

On June 5, 2005, the Colorado Department of Public Health and Environment issued 10 air emission permits for Comanche Station. These permits are associated with the new unit, as well as additional emission controls on the plant's existing two units. The air emission permits were required before project construction began.

The company reached an all-inclusive settlement agreement on the least-cost plan, which numerous parties to the regulatory proceedings endorsed, including Western Resource Advocates, the Sierra Club, Environmental Defense, Environment Colorado and Better Pueblo. It included new emission controls for existing units at Comanche Station, as well as the new unit. Low-NOx burners and lime-spray dryers, as well as mercury reduction technology, will be installed on both the existing Comanche 1 and 2 units. Comanche 3 will be equipped with low-NOx burners, a Selective Catalytic Reduction system, baghouse, lime-spray dryer and mercury reduction technology. As a result, overall SO2 and NOx emissions at Comanche station will be lower than they are today.

In early June 2005, the company also reached an agreement with the Colorado Building Trades Council, committing that all new construction performed for Comanche 3 would be done under a project labor agreement. The project is anticipated to cost about $1.3 billion, with more than $250 million going toward construction labor. It will employ about 1,000 workers at the peak of the three- to four-year construction period. Once online, it could employ up to 40 additional full-time employees at the plant.