Xcel Energy and Colorado stakeholders reach historic clean energy agreement

NEWS RELEASE
XCEL ENERGY
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Xcel Energy-Colorado has reached a revised settlement agreement with an expanded group of stakeholders related to its clean energy plans. If approved by state regulators, the plan will deliver more than 80% of our customers’ energy needs from renewable resources by 2030 and exceed state carbon dioxide emissions targets, reducing carbon emissions by at least 85% by 2030, since 2005.

Xcel Energy originally filed its Clean Energy Plan in March 2021. This revised settlement ends the company’s use of coal in Colorado by 2031 when the plan retires Unit 3 of the Comanche Generating Station. This plan also accelerates the state’s carbon emission reductions, ensures reliability and affordability for customers and provides a just transition of our impacted communities. This settlement also continues the long-standing use of competitive energy procurement in the state of Colorado.

“This is an exciting and historic milestone for Xcel Energy and our Colorado customers as we lead the nation’s clean energy transition,” said Bob Frenzel, chairman, president and CEO of Xcel Energy. “We’ve already reduced carbon emissions 50% since 2005, due in part to the dedicated partnerships we’ve developed in the state of Colorado.”

“We’re so proud to lead the charge on reducing carbon emissions in Colorado, work that is a priority for our employees, policymakers, communities, customers and interested stakeholders,” said Alice Jackson, president, Xcel Energy-Colorado. “We’re grateful to all who worked side-by-side with us to reach this historic agreement, which not only drives significant carbon reductions, but most importantly, supports our employees and the communities impacted by the transition from coal to cleaner energy. We look forward to the Colorado Public Utilities Commission’s evaluation of this updated proposal as we continue leading the state’s clean energy transition.”

“By ending the Company’s use of coal by 2031 and achieving at least 85% reduction in greenhouse gas emissions, this agreement is a significant step towards meeting Colorado’s climate goals,” said Will Toor, Executive Direct of the Colorado Energy Office, “We also appreciate the commitment of the parties to support a just transition for workers and communities that have depended on coal.”

“Natural Resources Defense Council objected to the initial proposed settlement, but this new agreement addresses our concerns – including the speedier phase-out of coal powered generation,” said Noah Long western energy director of NRDC. “The new settlement brings savings for Xcel Energy customers and cleaner skies to Colorado, as well as healthier people and climate by accelerating the transition to clean energy. It also protects the communities and workers most impacted by the plant closures. The commission should adopt this big win for the state.”

“Colorado Independent Energy Association supports the settlement agreement and our member companies stand ready to build the clean energy projects that will help Colorado achieve its carbon emission goals,” said Will Coyne, executive director of the Colorado Independent Energy Association.

A wide range of entities support the revised settlement, including state agencies (Public Utilities Commission Staff, Office of the Utility Consumer Advocate, Colorado Energy Office, Office of Just Transition), communities (City and County of Denver, City of Pueblo, Pueblo Board of Water Works, Pueblo County), environmental groups (Western Resource Advocates, Conservation Coalition-Sierra Club/Natural Resources Defense Council), energy interests (Holy Cross Energy, Colorado Independent Energy Association, Interwest Energy Alliance, Onward Energy Management, Colorado Solar and Storage Association, Colorado Oil & Gas Association), customers (Walmart) and labor unions (International Brotherhood of Electrical Workers Local 111, Rocky Mountain Environmental Labor Coalition, Building & Construction Trades Council of Colorado).

Clean Energy Plan revised settlement agreement summary:

• Comanche Unit 3 will retire by Jan. 1, 2031, nine years earlier than the retirement date in the originally submitted plan, ending the company’s use of coal in Colorado. Beginning in 2025, the unit will begin reduced operations. Comanche Units 1 and 2 are already scheduled to retire by 2025.
• Just Transition property tax payments for the Hayden and Pawnee plants remain in place. 
• Pueblo County will receive ten years of property tax payments to account for the acceleration of the retirement date of Comanche 3, providing property tax payments through the originally proposed 2040 retirement date.
• The agreement retains the proposed process to seek replacement electric generation for Comanche 3, with a focus on the just transition benefits for the Pueblo community. This approach allows for the evaluation of future low-to-no emission generation technologies to ensure reliability around the clock and continue to reduce carbon emissions.
• As previously agreed to in earlier proposals, Xcel Energy will close Hayden Generating Station’s two coal-fired units years earlier than planned. Unit 2 of the plant will be retired by the end of 2027 and Unit 1 will be retired in 2028. (The original retirement dates for Unit 1 and Unit 2 were 2030 and 2036, respectively.)
• The Pawnee Generating Station in Brush, Colorado will transition from coal and be converted to burn natural gas by 2026 at the latest, with the revised agreement enabling a potentially faster timeline.
• Energy resource additions between 2021 and 2030 will be determined by a competitive bid process and are estimated to include:
  • Approximately 2,400 MW of wind
  • Approximately 1,600 MW of large scale solar
  • Approximately 400 MW of energy storage
  • Nearly 1,300 MW of firm dispatchable resources (available 24/7)
  • Nearly 1,200 MW of distributed solar resources

In 2018, Xcel Energy became the first utility in the nation to announce a vision to provide customers with 100% carbon-free electricity by 2050. This plan continues not only the company’s vision to lead the clean energy transition, but also presents a balanced, diversified portfolio of energy sources to maintain reliability and affordability while supporting communities as we work together to meet Colorado’s carbon reduction goals and evolving energy needs.

The plan requires the approval of the Colorado Public Utilities Commission.

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