Written by Marie Venner
As many know, Xcel Energy, the state’s largest GHG emitter and lobbyist, an out-of-state firm that records $588/million per year in after-tax profits (not that they pay taxes typically), filed an electricity resource plan (ERP) at the end of March.
Public Utility Commission rules require an Investor Owned Utility to file an ERP every 4 years. The purpose is to get PUC approval for new generation assets. This can be due to increased demand (though electricity demand has remained about the same the last two decades), old assets going to be retired, or contracts expiring. This year is different. Now there is a legislative mandate to get to 80% GHG reduction by 2030 (about 70% renewable electricity generation).
The PUC spends most of its time talking with the attorneys of this monopoly behemoth. Naturally, with almost $600 million per year in after-tax, after attorney profits to defend, Xcel does a good job of monopolizing that exchange as well. Citizens get to testify about once a year and sometimes once every 18 months.
Meanwhile, Xcel is still 64% fossil-fueled and figures they won’t have to make big changes until closer to 2030. As the state’s largest lobbyist, Xcel has Safe Harbor for itself (would that Coloradans and all who breathe have such Safe Harbor) from having to help meet state GHG reduction levels before 2030. According to its proposed ERP, Xcel will retire two old coal plants and Xcel proposes to convert one, in Brush, from coal to gas. Note that Xcel doesn’t call fossil fuels or fossil-fueled generation as such.
Xcel calls fossil fuels “firm dispatchables” and the monopoly is asking the PUC to approve 1276 megawatts of new gas power. But batteries are cheaper than gas for firming renewables now, 30% less. A new paper compares the levelised cost of energy delivered by a new 250 MW gas peaker plant with 250 MW four-hour and two-hour grid-scale batteries, and finds that overall — when capital cost, cost of fixed operations and maintenance, and cost of variable operations and maintenance are calculated — the batteries are 17% (2-hour) and 30% (four-hour) cheaper.
Xcel’s largest coal plant is now scheduled to close by 2040, and Xcel proposes to have the next generation of Coloradans pay for that at that point, through securitization, a tool that was supposed to incentivize early (near term) closures. Many consider that immoral to privatize high profits such as Xcel’s and then socialize losses from bad decisions, such as building a new coal plant as late as 2010, in an industry that has been declining longer, and then pass that as well as the climate and air pollution costs on to our kids and grandkids. Waiting until 2040 would be over 50 years after the International Panel on Climate Change started in 1988 and 75 years after the federal executive branch/White House report on the extreme threat of climate change. Even the American Petroleum Institute research during the 1960s makes the case “compellingly that the science is really sound.” API and Columbia University first held a conference where a renowned scientist expounded upon the emerging threat before 300 “government officials, economists, historians, scientists and executives” in 1959. Utilities knew too by 1968 and engaged in ongoing deception.
Xcel still argues to invest in fossil fuels and Xcel’s CEO Alice Jackson likes to say “the 7th and 8th graders of today” will figure out how to make the transition. But 47 scientists want to make sure people know that we can and should go to 100% renewable electricity by 2030. The technology is available and there are many ways to tackle the supply and intermittency of renewables, including “Non-Wires Alternatives” or “Virtual Power Plants”.
Time of (plentiful) renewables rates are one way to manage and match intermittent demand to intermittent generation. Xcel dumps enough wind electricity at night to power the daily miles of 300,000 EVs, rather than supply this electricity at a lower rate when it is available, to incentivize its use and storage in batteries. Xcel would rather build for a larger peak and sell its fossil fuel-generated electricity in the daytime. Dynamic line rating sensors can tell when lines can handle more transmission, twice as much in winter and on days with a breeze than on the hottest, calmest days. And increasingly demand or use can be managed and made flexible as well. Again, this doesn’t fit with Xcel maximizing their fossil-fueled infrastructure and returns.
Phase 1 of the ERP and the PUC’s review will look at how much and what types of generation resources Xcel can ask for. (Will the public be able to participate?). During Phase 2, Xcel will develop requests for proposals and the PUC will approve or not.
The state of Colorado chose not to perform the analysis on the most cost-effective path to decarbonization in our state. Instead, our executive prefers to make deals. One of the most egregious deals in-state was also supported by Western Resource Advocates and CoCO on p.8 of HB 1261 and the PUC sunset/reauthorization legislation in 2019. The “safe harbor” provision in HB19-1261 prevents the AQCC from mandating any further emissions reduction or assessing any fees for emissions. Xcel’s requirements kick in, in 2031, after Gov. Polis and Xcel’s Alice Jackson will likely be gone. This helps keep Xcel’s fossil-fueled infrastructure and outrageous profits from those running longer.
Fortunately, GridLab and NRDC did do a cost-effectiveness analysis. That was published in September 2020 and very clearly revealed that the fastest and most cost-effective way to meet Colorado’s statutory GHG reductions of 26% by 2025 and 50% by 2030 is to close coal by 2025, get to 72% renewable electricity by then, and 98% renewable energy for electricity by 2030.
It makes no sense for any entity to fund fossil methane. Xcel is confident in its lobbying power and personal friendships with those in power though, and its ability to keep extracting profits from Colorado and passing costs for coal closures in 2040 to the next generation. We can keep what gas plants are in Colorado now online as we phase out coal. Emissions reductions should occur steadily or even more steeply in the first part of the decade; having most of the reduction in 2029 and 2030 is not acceptable
We need to build 1GW of renewable generation per year for the next 15 years and locate clean generation close to the users, minimizing transmission costs.
This is a plan for the next 9 years, so it’s important to get it right.