Xcel gets green light from Colorado for $2.5 billion clean energy plan

FILE PHOTO: Xcel Energy's Comanche coal-fired power plant,  just southeast of Pueblo, has been a source of costly problems for the utility and its customers.

An electric cooperative that serves 165,000 customers along Colorado's Front Range said it's withdrawing its partial ownership of a beleaguered power plant, blaming Xcel Energy for "systemic failures" and insisting the latter is obligated to purchase its stake.

CORE Electric Cooperative owns a 25% stake in the Comanche Unit 3 power plant, which the company noted has been offline for more more than 700 days since 2010.

Xcel Energy, which owns the plant, could not be immediately reached for comment. 

In April, Xcel Energy announced it is retiring Comanche Unit 3 by Jan. 1, 2031, nine years earlier than the original plan. The move, Xcel said, ends the company’s use of coal in Colorado. The company added it plans to reduce operations at the plant beginning in 2025. 

"The overall operation and maintenance of Unit 3 demonstrates a carelessness and lack of attention to the necessary operational requirements that create the environment that inevitably has resulted in the failures and attendant outages," Jeff Baudier, CORE's CEO, wrote Xcel Energy in a letter. 

Baudier said just this year, the plant went offline for several months following an "event" that caused "severe damage" to the generator, lamenting Xcel Energy has "done nothing to cure this culture of failure." 

Baudier also criticized Xcel Energy's decision to retire Unit 3 early, arguing the move and Xcel Energy's pursuit of "unnecessary operational curtailments" against the wishes of CORE "constitute breaches of numerous material obligations" under the two companies' agreement.    

In a news release, Baudier also said Xcel Energy's "Systemic failures" to "prudently operate Comanche 3 since it came online in 2010 have severely impacted our commitment to providing affordable, reliable power to our member-owners.”

He added: “Despite every effort by CORE to be heard, PSCo has ignored our rights and driven this plant to dysfunction through mismanagement and incompetence. This situation is untenable, and CORE must move on to forge our clean, reliable, and affordable energy future.”

CORE's decision to withdraw its ownership stake opens another stage in the dispute between the two energy companies. CORE sued Xcel Energy last year, also alleging a breach of contract. The trial for that lawsuit is scheduled for October 2023, CORE said. 

Despite being Xcel's newest plant, Comanche 3 had been its most unreliable the last decade, according to Public Utilities Commission investigation, the results of which were released last year.

In response to that report, Xcel spokeswoman Michelle Aguayo said the company was committed to the plant's "continued safe and reliable operation."

She pointed to the utility's drive to renewable energy faster than expected and get out of the coal business in Colorado, per the wishes of Gov. Jared Polis and the state's Climate Action Plan.

"We are dedicated to operating our power plants with the safest industry standards and continue to look for ways we can grow, learn and improve how we run our generation fleet," Aguayo said. "We appreciate the Commission staff’s time in reviewing operations at Comanche 3.”

The plant was originally expected to cost $680 million to bring online, but overshot its budget to $784 million, with an additional $72 million the last 10 years.

When it was proposed in 2004, Comanche 3 was expected to operate until 2070.

The plant, however, has dealt with those performance issues at the same time it faced the consequential economics of green energy and environmental criticism to generating electricity with coal.

Xcel gets green light from Colorado for $2.5 billion clean energy plan

Xcel Energy's plant was the home of problems even before it began generating electricity, including boiler tube leaks in 2009. The plant has had issues with the welded components in its boiler and a malfunctioning water cannon.

In January 2020, turbine damage cost $4.8 million plus $1.7 million to buy replacement power because of it.

Then in June 2020, an issue that caused the loss of lubrication for the steam turbine, along with other equipment damage, rang up another $20.4 million in losses, with $14 million in replacement power, the report states.

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