Public Service Company of Colorado Files Electric Resource Plan Update with 87% Carbon Emissions Reduction by 2030

Strategic Insights -

Public Service Company of Colorado, a subsidiary of Xcel Energy Inc., has filed a partial settlement with the Colorado Public Utilities Commission (CPUC) proposing significant changes to its original 2021 Electric Resource Plan. The updated plan aims to reduce carbon emissions by 87% by 2030, surpassing the initial target of 85%. Key modifications include the early retirement of the Comanche 3 coal plant, conversion of the Pawnee coal plant to natural gas, and accelerated deployment of renewable energy resources.

Key Takeaways:

  • The updated Electric Resource Plan proposes an 87% carbon emissions reduction by 2030, exceeding the initial target of 85%.
  • Public Service Company of Colorado will retire the Comanche 3 coal plant by December 31, 2034, with progressively reduced operations beginning in 2025.
  • The company will convert the Pawnee coal plant to natural gas by January 1, 2026, with retirement in 2041.
  • The settlement maintains expected levels of wind, solar, energy storage, and flexible dispatchable resources, with accelerated acquisition of resources as a result of the Comanche 3 and Pawnee changes.
  • Public Service Company of Colorado will replace the energy and capacity of Comanche 3 through a separate resource solicitation in the 2027/2028 timeframe and will own, at a minimum, the capital investment equivalent to the estimated net book value of Comanche 3 at retirement ($626 million).
  • The company will maintain current depreciation levels for Comanche 3 and recover the remaining balance upon retirement (proposed to be through securitization pending CPUC approval in a filing post 2030).
  • Recovery of coal handling equipment at the Pawnee power plant will be recovered through a regulatory asset with a full weighted average cost of capital return, with the amortization period to be determined in a subsequent filing once final conversion costs are established.

Statistics:

  • 87%: Proposed carbon emissions reduction by 2030
  • 2040: Original proposed retirement year of the Comanche 3 coal plant
  • 2030: Targeted year for 80% renewable fuel mix
  • $626 million: Estimated net book value of Comanche 3 at retirement
  • 2028: Proposed year for conversion of the Pawnee coal plant to natural gas
  • 87%: Expected carbon emissions reduction through clean energy plan rider
  • 2041: Proposed retirement year of the Pawnee coal plant

Sources:

  • United States Securities and Exchange Commission (NOV 29, 2021) - PUBLIC SERVICE COMPANY OF COLORADO, Form 8-K
  • Colorado Public Utilities Commission (2021) - Public Service Company of Colorado 2021 Electric Resource Plan