New Xcel Coal-to-gas Idea Keeps 1 Coal-fired Unit

DENVER (AP) â¿¿ Xcel Energy Inc. now proposes retrofitting a coal-fired power plant unit in Denver with new emission controls, rather than shutting it down, to reduce air pollution.

As required by a new state law, Xcel in August filed a plan to add emissions controls to some coal-fired units, retire others and switch some to natural gas to help Colorado meet federal air standards. That proposal would have retired the coal-fired Cherokee 4 unit in Denver in 2022, but staff for the Colorado Public Utilities Commission said the law requires Xcel to fully implement the plan by the end of 2017.

Xcel filed a new recommendation Monday to instead retrofit Cherokee 4 with new emissions controls by then. The utility said it still prefers shutting down Cherokee 4 in 2022 but that the proposal it recommended Monday is a "next best option."

The PUC has until Dec. 15 to rule on a plan.

The utility also studied modifying its preferred plan to shut down Cherokee 4 by the end of 2017 instead of 2022, and another option to switch Cherokee 4 to natural gas in 2017 with a later retirement, but those options would mean higher short-term effects on customers' bills, Xcel said.

Retrofitting Cherokee 4 would mean an average annual rate increase of 1.7 percent over the next 10 years on customers' electricity bills, Xcel estimated. It has said the original plan would have meant an estimated 1.5 percent increase.

The group Affordable and Reliable Energy Colorado, which includes businesses and consumers, is still reading Xcel's recommended plan but is hopeful it addresses its concerns, spokeswoman Kelly Weist said. The group has said prices for natural gas are more volatile than for coal.

The Colorado Mining Association did not immediately return a phone message seeking comment after business hours Monday.

Conservation groups expressed disappointment over Xcel's new direction.

"The company has rejected cost-effective, reliable plans that would achieve greater emission reductions and cleaner air for Coloradans," John Nielsen of Western Resource Advocates said in a statement.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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