Xcel’s costly coal exit: Public interest group warns plan could stick consumers with the tab

By Catie Cheshire | Westword

One consumer protection group is calling for the Colorado Public Utilities Commission to shrink Xce's giant proposal.

As Xcel Energy works to decommission coal plants across Colorado, one proposal is catching heat.

Watchdog organization Colorado Public Interest Research Group believes Xcel’s proposal to replace the Comanche 3 coal plant in Pueblo will result in unnecessary costs to customers. The group’s executive director Danny Katz, says the proposal is too big for southern Colorado as his organization calls on the Colorado Public Utilities Commission to pare back the proposal.

According to Xcel’s filings with the PUC, the utility wants to replace energy production from Comanche 3’s coal units with a mix of wind, solar and natural gas along with battery and storage capabilities. Advocates who testified at the PUC, including CoPIRG, would have preferred to see all-renewable generation at the site.

The filings show that Xcel’s new energy plant would generate over fourteen times the electricity that Comanche 3 currently produces, which Katz says is far too high.

The plan also includes funds for investment in new technologies and equipment that CoPIRG says are untested and could result in significant payments to customers.

“There’s a number of things in this proposal that make it too costly,” Katz says. “At this point, while we still think whatever replaces it should be 100 percent renewable, we also want to make sure we’re making the case that it shouldn’t be too big.”

Xcel is required to retire all coal units by 2030 to meet state emission reduction goals. Along with Comanche, the Hayden and Craig coal plants will be closed in the next five years. Other coal plant retirements caused ire after Xcel attempted to recover the costs of closing plants early from customers, a move that environmental and consumer advocates strongly opposed.

Xcel spokesperson Michelle Aguayo says the company is working to keep bills low through the process of transitioning away from coal power.

“This is happening as we anticipate significant increases in electricity demand from electric vehicles, building electrification, oil and gas production electrification, growth from economic development in the Denver area and new demands from data centers,” Aguyao says.

Some of those growing energy needs are what has CoPIRG alarmed. The coal plant currently generates around 750 megawatts of electricity, and the new proposal would generate up to 14 gigawatts of electricity, according to filings with the PUC.

“Some of that is because there may need to be more energy capacity based on the way we’re shifting to electric vehicles and all that, but a lot of it is being driven by data centers,” Katz says.

According to Katz, only around a third of the size of the proposal is due to anticipation of new electric vehicles, heat pumps and other all-electric buildings. The rest is due to an increase in data centers and other businesses that add large loads to the energy grid.

Data centers are warehouses containing computers that power technologies from basic internet functions to cryptocurrency mining and artificial intelligence.

“The more computing power you need, the more computers and data centers you need,” Katz says. “AI is the biggest contributor right now. …Every data center at this point uses a lot of energy, and they use a lot of water.”

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