Metro Denver’s biggest utility company is preparing for the acquisition of new energy resources, notably wind and solar power, as part of its efforts to comply with Colorado’s aggressive move away from fossil fuel, according to a news release.

Xcel Energy officials said the energy transition will provide reliable and affordable energy to its customers, but some argue it’s recipe for higher energy bills for ratepayers already stressed by rapidly increasing energy costs and inflation.

As part of its “nation-leading clean energy transition,” Xcel proposed to buy 3,900 megawatts of renewables and 400 MW of battery storage, in addition to 1,300 MW of “flexible always available generation,” which, according to an Xcel spokesperson, means energy that can be tapped all day, every day. The latter could include natural gas fired turbine generators.

Currently, Xcel's breakdown of energy production looks like this (all figures are megawatts): Coal 2,130; gas 4,405; pumped hydro 170; biomass 3; hydro 59; solar 1,238; wind 4,126. 

“Overall, we are focused on proposals for solar, wind and energy storage. However, we’ll consider bids for any generation type other than coal,” spokesperson Tyler Bryant said in an email statement to The Denver Gazette.

The size and scope of the company’s request “reflects our continued leadership of the nation’s clean energy transition while providing reliable, safe and affordable energy to our customers,” Xcel Energy–Colorado President Robert Kenney said in a release.

Xcel said it’s too early to estimate costs on the request for proposals.

“We’re planning to publish a report with the Colorado PUC by June 29, 2023, which will be Xcel Energy’s preferred generation portfolio based on the project bids we receive in this current request for proposal (RFP) process,” Bryant said. “This report will be publicly available online and will include customer cost estimates.”

Backers of renewable energy said the transition away from fossil-fired energy is necessary.

In his "roadmap" to achieving 100% renewable energy by 2040, the Polis administration said undergirding that goal is the "moral imperative" to fight climate change and curb pollution. The transition, the administration argued, offers Colorado the opportunity to "drive innovation and harness the consumer savings and economic benefits of leading the transition to a clean energy economy."

"These diverse communities," the administration said of communities that have also adopted a similar goal, "know that protecting Colorado’s way of life means doing our part to combat climate change, and that swiftly adopting renewable energy in our electricity sector and then extending the impact of that clean electricity across the economy will protect the health of our communities, create good paying jobs, strengthen our economy and keep rates low for customers."

While the precise costs of Xcel's published plan won’t be known until the bids are received, some believe it's likely that this drive will result in higher energy bills. That's according to Jake Fogleman, a policy analyst at the Independence Institute, a conservative-leaning think tank based in Denver.

“It’s telling that Xcel is looking to replace 1,500 megawatts of firm capacity from retiring coal plants with 5,600 megawatts of solar and wind, storage, and backup natural gas generators,” said Fogleman. “That’s nearly a four-to-one capacity replacement. The intermittency of renewables means the company must overbuild assets. Add in the costs of a bunch of new transmission lines and for paying off the early-retired coal assets, and you’ve got a recipe for high electric bills for the foreseeable future.”

All existing Xcel coal plants are scheduled for closure by 2031. The Hayden 2 facility will retire in 2027, the Craig 2 and Hayden 1 plants will retire in 2028, the Comanche 3 will retire by Jan. 1, 2031, and the Pawnee plant will be converted to natural gas no later than Jan. 1, 2026.

What will happen to the electrical infrastructure at these plants remains unclear.

Bryant, the Xcel spokesperson, said when it comes to the company’s plans for the electrical infrastructure at retiring coal generation plants, “we’re still looking at the future use for those sites.”

Some, like Fogleman, argue that the potential for grid failures during peak demand increases as renewables are substituted for energy generators such as coal and natural gas.

“The PUC just issued a report warning that rising renewable penetration is threatening the reliability of Colorado’s grid, not just during periods of peak demand, but also during periods of mild, cloudy weather,” Fogleman said. “That risk will only get worse as Xcel continues to retire its coal fleet.”

House Bill 21-1234, signed into law by Gov. Jared Polis on July 6, 2021, states that investor-owned utilities “should pursue opportunities to develop new energy technologies or modify existing generation resources with new technologies.”

While proposals have been heard from the public, including the Pueblo County commissioners, to convert shuttered coal plants to nuclear power generation using small modular nuclear reactors, neither the General Assembly nor the Colorado Energy Office appears to be interested in pursuing nuclear power, despite a specific statutory directive to do so, according to some critics.

“What I have said is that nuclear is one of a number of technologies that could potentially play that role,” Colorado Energy Office Director Will Toor said in an prior interview. “To date, there’s no utility in Colorado that has wanted to bring forward any nuclear projects. I think … that if a utility were to bring a proposal forward, there’s nothing that I’m aware of that would stop it from being considered.”

A law enacted during the 2018 legislative session directs the Colorado Energy Office to promote cleaner energy sources, such as biogas and biomass, but also nuclear.

Amy Cooke, CEO of the John Locke Foundation, a North Carolina-based think tank, said the Colorado Energy Office has failed to comply with that law.

“Will Toor suggests that there’s nothing preventing nuclear from being considered as part of a utility’s generation portfolio,” Cooke said. “In fact, even though state law directs the Colorado Energy Office to promote nuclear, under Mr. Toor’s direction, it does not comply.”

The state energy office's website doesn’t reference nuclear energy.

The Colorado Energy Office did not immediately respond to a request for comment.

State Sen. Dennis Hisey, R-Colorado Springs, presented an amendment to Senate Bill 22-138 during the last legislative session that would have required Toor to study the feasibility of using small nuclear reactors, but it was voted down on a party-line vote.

“They know (about nuclear options) they don't want to discuss it in their caucus because it brings out such a visceral reaction in some people that they just don't want to go there. So, they avoid it at all costs,” Hisey said.

Experts say it’s impossible to go 100% carbon free without nuclear power. At present, 92 nuclear reactors at 54 plants in 28 states provide about 20% of the nation’s electricity, and some 50% of America’s “green” energy, according to the federal Energy Information Administration.

“I think, nationally, trying to get to 100% carbon free without nuclear is not possible,” said Everett Redmond, a nuclear engineer at the Nuclear Energy Institute, in an interview.

Redmond says that the higher initial costs of nuclear power are offset over time by the longevity of such plants versus a 25-year-or-so lifetime of wind and solar. The cost of nuclear energy drops significantly over time, rivaling that of renewables, Redmon said, adding he believes nuclear power is a better long-term investment.

“The fleet right now is generating electricity somewhere in the neighborhood of $30 a megawatt-hour,” Redmond said. “This is in contrast to say wind and solar. … You have to replace all of that stuff on a frequency far greater than what you will with nuclear. So, when you invest in nuclear, you're talking about a very long-term asset that will pay for itself over time.”

Solar and wind power struggle to achieve capacity factors equal to half that of a nuclear plant and are highly variable, some critics argue.

According to the Energy Information Administration, nationally, the capacity factor for solar panels varied from 17.6% to 27.1% and for wind it varied from 23.8% to 46.6% from January to September 2022.

Xcel has long experience and expertise in building and running nuclear power plants. It recently signed an agreement to operate a small modular reactor facility designed by NuScale of Portland, Oregon at the Idaho National Laboratory commissioned by UAMPS, a Utah consortium of cities.

“Our nuclear plants in the upper Midwest are key to reaching this corporate vision and are one of the best performing fleets in the nation,” Xcel spokesperson Michelle Aguayo said in a statement to The Denver Gazette in April. “We do not have plans to build nuclear in Colorado.”

Cooke, from the John Locke Foundation, noted that Xcel said it is open to a host of other energy sources but coal – and that’s good news for Colorado ratepayers who want a clean energy grid but also demand reliability and affordability.

Cooke suggested that Xcel seriously consider nuclear energy in Colorado.

“With innovative technologies like small scale modular reactors, Colorado can be a leader in clean power generation without blowing up family budgets, depressing the economy, and polluting the state’s natural beauty,” Cooke said.