Company Proposes to Shut Down 900 Megawatts of Coal; Plan Provides
Savings of at Least $225 Million
DENVER--(BUSINESS WIRE)--
Xcel Energy proposed today a low-cost option to significantly reduce
Colorado coal-fired generation emissions, through a combination of
retiring, repowering or retrofitting of several power plants as called
for under the recently enacted state Clean Air Clean Jobs Act.
The company’s plan has three key components:
-
Retires 900 megawatts (MW) of coal generation at its Valmont (186 MW)
and Cherokee (717 MW) power plants by the end of 2017 and the end of
2022, respectively;
-
Repowers its Cherokee power plant with efficient, natural gas
generation of 883 MW. The company also will switch to natural gas
generation at the 111 MW Arapahoe unit four; and
-
Retrofits about 950 MW of coal-fired generation at the Pawnee (505 MW)
and Hayden (446 MW) power plants with modern emission control
technology.
Xcel Energy, which supported the Clean Air Clean Jobs legislation, filed
its preferred plan with the Colorado Public Utilities Commission (CPUC).
The plan responds to a state law passed last spring that required the
company to propose reductions in oxides of nitrogen by 70-80 percent by
2017, to meet anticipated federal clean air regulations. The plan would
reduce emissions of oxides of nitrogen from the targeted plants by 75
percent at the end 2017, and by 89 percent at the end of 2022.
“Over the next several years, the U.S. Environmental Protection Agency
will require the state of Colorado to comply with a series of regulatory
mandates unprecedented in the history of the Clean Air Act,” said Dick
Kelly, Xcel Energy chairman and CEO. “We believe our proposal is the
best way to meet new environmental requirements in a manner that
preserves reliability and minimizes customer costs.”
The total cost of the plan, if approved by the CPUC, would result in new
construction investment of approximately $1.3 billion over the next 12
years. The company expects that its proposal will result in savings of
approximately $225 million when compared to the traditional approach of
retrofitting all of these plants with emissions controls. The savings
compared to an all-controls approach would be more than $950 million if
there is federal regulation that places a price on carbon dioxide
emissions.
In addition, when compared to 2008 levels, the company would reduce
sulfur dioxide emissions by 84 percent and mercury emissions by 85
percent for the power plants targeted under the plan by 2023. The plan
also allows Xcel Energy to meet Colorado’s statewide carbon dioxide
reduction goal of 20 percent before the 2020 target.
“Our plan addresses the future of some of our oldest coal-fired power
plants at a reasonable cost,” said David Eves, president and CEO of
Public Service Co. of Colorado, an Xcel Energy company. “Our prices will
need to rise over the next several years as we make investments to meet
customer demand, and to enhance our transmission system and replace
aging distribution infrastructure.”
The rate impact of the proposed plan is expected to increase future
bills on average by 1 percent annually over the next ten years. Eves
noted that this was well below the company’s original estimates of 4
percent to 6 percent at the time the legislation was passed.
Xcel Energy studied more than 300 different scenarios in arriving at its
preferred plan. The preferred plan is consistent with current and
reasonably foreseeable emission reduction requirements, and reduces the
company’s long-term risk from federal Clean Air Act and climate
regulation.
Together with the company’s other energy and environmental initiatives,
the plan will allow Xcel Energy to maintain a balanced energy mix that
includes coal, natural gas, energy efficiency and one of the nation’s
largest utility portfolios of renewable energy.
Xcel Energy is proposing a new Emission Reduction Adjustment rate to go
into effect on Jan. 1, 2011. This adjustment clause will recover the
costs incurred under the emissions reduction plan, until rates can be
adjusted from time to time to reflect these costs. The details of the
plan and the Emissions Reduction Adjustment can be reviewed on the Xcel
Energy web site at www.xcelenergy.com.
Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas
company with regulated operations in eight Western and Midwestern
states. Xcel Energy provides a comprehensive portfolio of energy-related
products and services to 3.4 million electricity customers and 1.9
million natural gas customers through its regulated operating companies.
Company headquarters are located in Minneapolis.
This news release includes forward-looking statements relating to
increased costs associated with expected higher commodity prices that
are subject to certain risks, uncertainties and assumptions. Actual
results may vary materially. Forward-looking statements speak only as of
the date they are made, and we do not undertake any obligation to update
them to reflect changes that occur after that date. Factors that could
cause actual results to differ materially include, but are not limited
to, those risk factors listed from time to time by Xcel Energy in
reports filed with the Securities and Exchange Commission (SEC),
including Risk Factors in Item 1A and Exhibit 99.01 of Xcel Energy’s
Annual Report on Form 10-K for the year ended Dec. 31, 2008.
Source: Xcel Energy
Contact:
Xcel Energy
Media Relations, 303-294-2300
www.xcelenergy.com