DENVER Colorado regulators agreed Thursday that Xcel Energy Inc. should switch another coal-fired power plant unit in Denver to run on natural gas as part of its plan to cut emissions, an option that wasnt the utilitys first or second choice.
The fate of Cherokee 4 was one of the most contested portions of Xcels plan to cut nitrogen-oxide emissions by 2018 as required under a new state law. The new Clean Air Clean Jobs Act was aimed at helping Colorado meet federal clean-air rules.
The Public Utilities Commission earlier approved other parts of Xcels plan that would close five other coal-fired units in Denver and Boulder, switch one in Denver to run on natural gas, and add emissions controls on units in Brush and Hayden.
Xcel in August proposed retiring Cherokee 4 in 2022 as part of its plan, but opponents said that wouldnt meet the state laws 2018 deadline.
Xcel then suggested adding emissions controls on Cherokee 4 while still running it on coal, saying it would cost its customers less than other options.
State health officials and the Governors Energy Office supported retiring Cherokee 4 in 2017 and building a new unit that runs on natural gas.
The PUCs three members agreed Thursday on the fuel-switching proposal, partly because it leaves options open for what should supply Colorados energy after 2018.
Xcel spokesman Mark Stutz said the plan would greatly improve air quality.
We are hopeful that we can make this plan work, but we will need to review their order carefully to determine if we think it will work for our customers and to be sure we can implement the plan, he said in a written statement.
Xcels overall plan is projected to cost about $1.4 billion. Customers would see an estimated 2.4 percent average annual increase in their monthly bills.
Americas Natural Gas Alliance, which represents 34 natural-gas exploration and production companies, applauded the PUCs decision Thursday.
The health department has said the plan approved by the PUC would meet the laws requirements to cut nitrogen-oxide emissions from 2008 levels by at least 70 percent by 2018 but also cut emissions of greenhouse gases and mercury.
John Nielsen of Western Resource Advocates said the commission made critical progress in achieving cleaner air by approving the retirement of more than 500 megawatts of coal-fired generation in the Denver area but fell short by not setting a retirement date for Cherokee 4. A firm retirement date could come in a formal PUC order due Wednesday.
The risk remains that the most polluting power plant in the Denver area could revert to operating on coal to the detriment of the health and well-being of people in the Denver area, Nielsen said.
Also Thursday, PUC Chairman Ron Binz floated the idea of authorizing spending for job retraining if Colorado coal miners lose jobs because of the PUCs decisions. Commissioners earlier heard testimony that up to 200 coal mining jobs could be lost.
Routt County Commissioner Doug Monger, chairman of the Associated Governments of Northwest Colorado, said he appreciated the thought but his region also will lose tax revenues if the coal industry suffers.
Were having a hard enough time getting through the economic recession. The mainstay of our wage base is set off our energy extraction industry, Monger said.
He and others are still upset that the Clean Air Clean Jobs Act was enacted with little input from the coal industry in northwest Colorado.
Our little population base in Colorado is not exactly sure whether were part of Utah or Wyoming right now, Monger said.