By Allen Best. Published in Big Pivots, April 7, 2022
For all electrical utilities, R is the first letter of the alphabet. Reliability, keeping the lights on, comes before A, affordability.
Colorado’s utility regulators soon will decide the role of Comanche 3, the state’s youngest but most unreliable coal-fired power plant, in ensuring reliability, and whether more natural gas generation will be required.
Xcel Energy, the operator and primary owner of the 750-megawatt coal plant, wants to keep the plant operating on limited, then seasonal-only, terms until 2034. It says the plant will meet peak demands during winter and summer. Several state agencies plus other groups have concurred.
Evidence for Comanche 3 serving this purpose is thin. All fossil fuel plants must occasionally be idled for repairs and maintenance. Comanche 3 has been first in this class. A 2021 report by the Public Utilities Commission staff found the coal unit from 2010 to 2020 “had the lowest availability” of all of Xcel’s coal and gas-fueled units in Colorado.
Comanche 3 was down for most of 2020. It’s down again this year, and until June at the earliest it won’t be generating any more electricity than a solar panel at midnight. At least the solar panels that now surround the plant on the edge of Pueblo generate electricity when the sun shines.
This should provide no comfort to people in Grand Junction, Denver, and other cities who expect air conditioning if temperatures soar to 116 degrees as happened in Portland last summer.
In a March meeting, two of the three PUC commissioners reported seeing no good argument for the plant operating beyond 2029. John Gavan, the commissioner from Paonia, was adamant in that. Megan Gilman, the commissioner from Edwards, was more inclined to kick the decision down the road until next year. Eric Blank, the chair of the PUC, who is from Boulder, observed that requiring the early retirement would in effect make the PUC responsible for ensuring reliability.
What may matter immensely is that Comanche 3 still hasn’t been paid off.
How different from just 18 years ago, when Comanche 3 was approved unanimously by a different set of PUC commissioners. Utilities and their regulators in 2004 saw a future that looked much like the past, giant coal plants gobbled coal delivered by a virtual conveyor belt from mines in Wyoming and Colorado. The plant that PUC commissioners approved was expected to continue operations until 2070.
Winds of change were even then picking up. Colorado Green, the state’s first wind farm, had begun operations between Lamar and Springfield earlier that year. That November, voters approved the state’s first renewable portfolio standard. Xcel easily met that initial 10% requirement years in advance of the deadline.
Today, Comanche 3 looks like a billion-dollar blunder. If ensuring winter lights or summer chillers is the goal, the relative grandfathers of Xcel’s coal-burning fleet, Hayden 1 and 2, completed in 1965 and 1976 respectively, might be better options for ensuring reliability. They’re currently scheduled to close in 2027 and 2028.
Xcel and other Colorado utilities now say with confidence they can achieve 80% carbon-free energy by 2030. Nobody, however, claims complete confidence in existing technologies and business models to go even higher than 90%. Holy Cross, the electrical provider for the Aspen and Vail areas, has a goal of 100%. Inconveniently, it also owns 8% of Comanche 3.
Xcel wants more natural gas generation to ensure reliability. This could potentially result in the better part of $1 billion in new infrastructure. But would those assets be stranded by new technology in another 20 years?
A decision may not be immediately necessary. In 2016, the last time Xcel submitted a plan to state regulators, it also wanted a ton of new natural gas generation. When it went shopping, it got bids for renewable generation in late 2017 that dropped jaws across the nation. The economics of renewables had become compelling.
Now, reliability remains a concern, but many ideas are percolating. Homes will likely become energy sources, the batteries of electric vehicles supplying household needs when the sun isn’t shining and the wind isn’t blowing. The grid increasingly will be two-way and with dispersed energy sources. Today’s electric grid that relies on a few big coal plants in a decade will look as quaint as a desk phone from … well, 2004.
By late next year we’ll have a much better idea whether new natural gas plants will be needed for reliability. As for Comanche 3, if it were a car, it’d already be in the automotive graveyard.