Colorado's Public Utility Commission (PUC) voted unanimously on Monday to give preliminary approval to Xcel Energy's Clean Energy Plan, which would see the utility close 660 MW of coal-fired generation a decade earlier than scheduled and shift to renewable resources.
Under the plan, Xcel will close units 1 and 2 at the Comanche Generating Station in Pueblo and invest $2.5 billion in renewable energy and battery storage. The utility expects the plan to save ratepayers $213 million.
- In January, the utility solicited notably low bid prices for wind-plus-storage, $21/MWh, as well as $36/MWh for solar-plus-storage, some of the lowest bids for renewable energy plus storage on record.
Xcel's Clean Energy Plan is part of its years-long "steel for fuel" strategy in which the utility is shifting away from fossil fuel generation and investing in renewable energy.
Last year, CEO Ben Fowke told Utility Dive the move is made possible by steeply declining prices for wind, solar and battery technologies.
"We're looking at [wind prices] in the low teens to low 20s [in dollars/MWh] — not starting prices, but levelized across the 25-year life of the project," he said. "That beats gas, even at today's prices."
By 2021, Xcel forecasts that wind will be its single biggest resource in terms of generation output. Environmentalists cheered approval of the plan that will help the utility get there.
"The plan is a clear rebuttal to the notion that we have to choose between affordable electricity rates and clean air," said Zach Pierce, senior campaign representative for Colorado Sierra Club's Beyond Coal campaign in a statement.
Retiring the coal units was "the most contentious part," of the plan, according to the Pueblo Chieftain, which noted two out of the state's three commissioners originally worried the plan relied too much on solar-plus-storage.
Coal made up 44% of Colorado's electric generation last year, and the proposal would decrease that generation to 24%, according to the Denver Post.
Replacing that capacity does not appear difficult for the utility. Earlier this year, Xcel received over 400 proposals in response to its resource solicitation that returned record-breaking bids for storage-paired renewables. The utility plans to add 1.8 GW of renewables to its portfolio, including 1,100 MW of wind and 700 MW of solar to replace its coal-fired generation.
By 2026, the utility estimates 55% of Colorado's electricity will be generated by renewables, dropping CO2 emissions 60% below the 2005 level, according to Sierra Club's press release. The PUC is expected to release a written statement outlining its decision in September.