Sweeping energy legislation passed in Colorado in 2010 – titled the Clean Air- Clean Jobs Act (CACJ) – gave Xcel Energy the chance to propose a plan to modernize its system, significantly reduce emissions and in the end, set itself up for the challenge of adding lots of new renewable-energy resources to its system.
That plan was then considered – along with competing plans submitted by others – by the Colorado Public Utilities Commission. In the end, the company’s plan prevailed, along with some negotiated changes to the initial proposal.
The massive CACJ effort recently came to a close seven years later when Cherokee Generating Station’s Unit Four in Denver switched from coal to natural gas, and Valmont Station’s Unit Five in Boulder was retired.
In the end, the $1 billion project completed the following major objectives:
“Our unique emissions-reduction plan achieved a cleaner energy future and better electric reliability at a reasonable cost to our customers,” said David Eves, president, Xcel Energy-Colorado. “By taking a comprehensive look at our entire system, our plan addressed the future of some of our oldest coal-fired power plants in Colorado.
“The project was originally proposed and designed with the the expectation of replacing coal with gas generation to help us meet environmental requirements,” he added. “It ultimately allowed us to increase the use of wind and solar energy, and we are implementing plans now to own new wind farms that offer our customers more low-cost clean energy.”
The CACJ project was completed on time and under budget, with emission savings that proved greater than expected, said Steve Mills, vice president of Operations with Energy Supply. Both sulfur dioxide and emissions of nitrogen oxides are now down 90 percent, compared to original projections of 83 percent and 86 percent, respectively. And mercury emissions are down 90 percent, compared to original projections of 82 percent.
Mills served as project lead once the legislation passed, and worked closely with Rates, Resource Planning and others to develop the company’s plan from May to September in 2010. The team developed a variety of scenarios, including between 300 and 400 alternatives for possible resources.
The goal was to make the company’s plan more cost effective than alternatives. The CPUC held public hearings and even hired an independent evaluator before ultimately approving a final plan.
“We ended up compromising so everyone got some value out of the solution,” Mills said. “There was plenty of give and take among all the parties.
“It gave us an opportunity to work with stakeholders and constituents to reduce the amount of coal on our system and move to more natural gas and wind,” Mills said. “We received approval in 2010, and then off to the races we went on a seven-year project.”
It wasn’t always easy. Concerns for the Denver area grid and voltage control had to be considered.
Initially, several synchronous condensers were planned, which are large induction motors used to maintain voltage and stability on the system. In the end, however, just one condenser was needed.
“Because we retired Cherokee in segments, unit by unit, we could work on substation design issues to resolve voltage issues during the process,” Mills said. “It all came down to what worked best between our coal retirement dates and the new generation at Cherokee.”
Although the Energy Supply workforce dropped by 180 people over the seven years of the project, the company did not need to severe anyone, Mills said.
“We were able to stage it and work collectively to help people move through the process,” he said. “We were able to place affected employees at our other plants, and also take advantage of retirements.”
The company utilized normal attrition, retirements, transfers and other internal postings to support the work-force transition. This was the same approach used for the Metro Emissions Reduction Project in the Twin Cities area to lessen any impact to employees, Mills said.
Energy Supply worked together at the various Colorado generating facilities, offering opportunities for most employees over the length of the project to remain working at the company. Working closely with HR and Work Force Relations, many employees were able to make transitions to new positions at other company sites or internal organizations.
“This is same approach we will use for the recently proposed Colorado Energy Plan, which includes the early retirement of Comanche Generating Station’s Units One and Two,” Mills said.
In the end, the CACJ project helped move the company portfolio from coal to natural gas, a fuel source that is beneficial in working with wind energy to balance the system. It also paved the way for the effort that has become The Colorado Energy Plan, which continues the same clean-energy trends of more renewables and less coal.
“Clean Air-Clean Jobs positioned Xcel Energy to lead an industry change that gives us a high degree of credibility,” Mills said. “When we offer ideas, it’s not like we haven’t done it before. And we are now adding more renewable sources that will work well with our fossil fleet.
“The project provided us with an opportunity to work with stakeholders and create a constructive package that benefitted everyone,” he added. “We were successful in doing that and in improving our system at the same time.”
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