Xcel Energy plans to spend $15 billion to boost renewable energy

Xcel Energy plans to spend $15 billion on renewable energy to provide electricity to its Colorado customers in the coming years, although its new proposal comes with a potential rate increase and criticism from environmentalists who want the utility to complete end its reliance on fossil fuels.

The company filed a new clean energy plan Tuesday with the state Public Utilities Commission, which has until the end of this year to accept or reject it, said Katie O’Donnell, a PUC spokeswoman.

Xcel said the plan would make 80% of its system in Colorado run on wind, solar and biomass energy by 2030 and would add 6,500 megawatts of renewable energy to the grid as it closes its last coal-fired power plant.

“This is a very significant investment for our customers and our communities,” said Robert Kenney, president of Xcel Energy Colorado. “It’s not just benefiting our environmental goals, but it will put us on our path to reduce carbon emissions.”

The utility company is describing its Colorado Clean Energy plan as “the largest clean energy portfolio ever built in Colorado.”

But it will come at a cost.

The company expects to spend an estimated $15 billion as it leases property for wind and solar farms, adds new natural gas-fueled power generators, shutters coal plants and builds new biomass plants, Kenney said in an interview with The Denver Post.

Xcel plans to offset up to $10 billion of the cost through tax credits allowed under the Inflation Reduction Act, a 2022 law signed by President Joe Biden to boost the country’s reliance on clean energy and to slow climate change.

To cover the remaining $5 billion of expenses, Xcel will ask the PUC to approve a rate increase of 2.3% for its 1.6 million electric customers, Kenney said. That would increase the average customer’s bill by about $10 per month when adjusted for inflation in 2030, he said.

Before the company can ask for a rate increase, however, the new energy plan must be approved by the commission. Xcel has to then ask for permission to build its various power generators and then it can seek a rate increase to help pay for the construction, Kenney said.

While the rate increase is looming, Kenney said the proposed projects would boost the state’s overall economy.

“The other benefit that comes with all this development is there will be increased property tax revenue to cities and counties, lease payments to land owners for wind farms, jobs created in construction and in long-term maintenance,” he said. “It’s not just an investment in building the resources. It’s an investment in our communities as well.”

Xcel will shutter its coal-fired Hayden Generating Station in Routt County by 2028 — ahead of schedule — and replace it with a biomass plant, Kenney said. That biomass plant will use forest waste from fire prevention activities and Rocky Mountain pine-beetle-kill wood as biofuel to generate electricity.

The company will retire its natural gas-powered combustion turbine in Alamosa in 2025 but wants to build a 28-megawatt combustion turbine to back up existing electric service in the San Luis Valley. And it is proposing to build a new natural gas combustion turbine in Fort Lupton to supply electricity during peak usage times, according to a news release.

Kenney said it is necessary for the company to have natural-gas-powered facilities to ensure the utility can meet its customers’ needs even when temperatures are especially hot and demand for electricity is at its peak.

“When the sun isn’t shining and the wind isn’t blowing, you need some sort of baseline generation to maintain the reliability of the system,” he said.

But it is those plans to continue using natural gas that concern environmentalists.

Multiple environmental groups told The Post this week that they were not prepared to comment on the details of the plan because they had not had time to digest the 184-page proposal. All of them will have a chance to submit comments about it before the PUC makes its decision.

Noah Rott, a spokesman for the Sierra Club’s western region, said the new energy plan is a step forward in cutting greenhouse gas pollution. But the group is concerned about the continued use of natural gas.

“It’s very concerning that Xcel wants to build new gas plants as Colorado works on its path to reduce air and climate pollution,” Rott wrote in an emailed statement. “New gas plants would lock in high long-term costs and dangerous pollution for more communities when there are already too many being unjustly harmed by Xcel’s current fossil fuel infrastructure.”

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