The coal-fired units of the Martin Drake and Ray Nixon power plants will have to be retired for Colorado Springs Utilities to meet a state-mandated goal of 80 percent reduction in greenhouse gas emissions by 2030.

Acknowledging that fact, the Utilities Policy Advisory Committee at its May 6 meeting whittled down a group of 19 energy portfolios that propose alternatives for energy generation resources. The committee eliminated nine of the portfolios that wouldn’t allow the utility to meet the state goal.

Colorado House Bill 19-1261, signed into law by Gov. Jared Polis on May 30, 2019, set a statewide goal of reducing greenhouse gas emissions by at least 50 percent in 2030, from 2005 levels. 

But if a utility submits a plan to the state public utilities commission that demonstrates an 80 percent reduction from 2005 levels by 2030, it will not be required to reduce its emissions more than that to meet the statewide goal.

Within the past week, however, the state has conveyed to CSU its clear expectation that all utilities in the state will meet the 80 percent goal — one that “presumes no coal by 2030,” Andy Colosimo, CSU’s manager of governmental affairs, told the committee.

CSU’s peer utilities have officially made policy commitments to achieve the 80-by-2030 standard, leaving CSU as “maybe the outlier in that conversation right now, that we have no official commitment in that space,” said Dan Hodges, CSU’s government affairs liaison.

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CSU’s current plan of record projects a 40 percent reduction by 2035.

The original 19 portfolios were ranked by CSU staff according to a complex modeling system that took into account, in order of weighting: reliability, cost/implementation; environment/stewardship; flexibility/diversity of resources; and innovation.

Of the portfolios that remain, all meet the state standard, and some have even higher goals. Portfolio 15, for example, would allow CSU to provide 100 percent renewable energy by 2030 and would retire Drake by 2026, but its original ranking was 16 — one of the lowest.

Of the top five ranked portfolios, the three that remain all call for retiring Drake’s coal-fired units by 2023 — a goal that is being championed by the Sierra Club’s Beyond Coal branch.

In fact, portfolio 17, which would retire Drake by 2023 and Nixon by 2030, was ranked No. 1.

The rankings could change, however, as CSU staff re-evaluates the remaining portfolios and makes some tweaks to the parameters requested by the committee on May 6.

And the committee still has a lot of work to do before it can choose the portfolio or portfolios it will recommend in June to city council, which acts as the utilities board.

SIERRA’S TALKING POINTS

The Sierra Club contends that CSU could save millions of dollars if the Drake and Nixon plants were replaced with wind and/or solar energy. 

Across the West, “much has changed in the energy industry,” said Lindsay Facknitz, a member of the local chapter of the Beyond Coal group. There’s been an enormous shift away from coal. Our utility company is wanting to reap the benefits of switching away from coal as well. … The reason why the Sierra Club supports that is the economic benefits of moving heavily to renewables. Sources like wind and solar are free and infrastructure is cheaper to build.”

The coal-fired Drake and Nixon plants “have really worn out their tires,” Facknitz said. “Drake is the most costly and least efficient energy source that we have.”

Coal-fired power plants also pose a risk to human health because coal combustion releases toxic substances including particulates and sulfur dioxide. 

While pollution controls have been installed on the two remaining units operating at Drake, which have been shown to remove significant amounts of pollution, “data from CSU shows significant downtime where the scrubbers are not operating,” a Sierra Club data sheet on the plant states.

The coal plants also generate toxic coal ash that must be disposed of properly to eliminate health risks.

Beyond the cost and health risks, Beyond Coal members see huge benefits to downtown Colorado Springs by eliminating the Drake plant.

“The city is trying to realize a new vision of itself” with construction of the U.S. Olympic and Paralympic Museum and the Downtown soccer stadium,” Facknitz said.

“To have Drake right next to those, hinders our ability to realize that new vision,” she said. “Any great city with great population wants to have a signature first impression on anyone who’s visiting. The first impression of a huge coal plant built in 1925 doesn’t give a great impression.”

It isn’t palatable to the young professionals who are moving to Colorado Springs, either, she said.

“For many reasons, from the economy to air quality,” closing Drake early “will be an overall win for the whole community,” Facknitz said.

CSU’S ENERGY MIX

The utility does not disagree that more renewables are desirable.

“We have a desire to have more renewables, as indicated by our energy vision, which stipulates that we are going to have environmentally sustainable energy that is reducing our carbon footprint,” said Michael Avanzi, CSU’s manager of energy planning and innovation.

The utility has already started adding more renewable sources to its system through agreements with renewable energy producers. 

“Today we have about 114 megawatts of solar, which represent about 10 percent of our total capacity and about 5 percent” of the energy that is actually produced, said Michael Avanzi. The actual energy (the amount of energy actually produced, as opposed to capacity) is lower because solar farms only generate energy about 30 percent of the time.

Four CSU solar projects are either completed or in development. By 2024 they will generate more than 264 megawatts of solar power and help increase the renewable energy capacity to about 25 percent and actual energy to about 10 percent.

In addition, hydro power represents about 10 percent of CSU’s energy, and the potential for additional hydro power is being investigated.

The 185-megawatt Drake power plant provides about a quarter of the community’s power year round, according to CSU’s website.

The utilities board voted in 2015 to decommission the plant no later than 2035. The board revisited the decommissioning question in 2017, and an extensive study was done to evaluate earlier closure options and replacement generation locations.

As a result of that evaluation, the utility undertook essential projects that would allow for several closure options while it continued to provide safe and reliable power for customers. 

The utility has estimated that the soonest these projects could be completed is the end of 2023.

COMPLEX ANALYSIS

CSU staff is working to determine the revenue requirements and impacts on rates for each remaining portfolio and will present its portfolio recommendations to the committee at its June 3 meeting.

Early retirement of the Drake plant is being addressed in the modeling to determine exactly how much money would be saved, Avanzi said.

“It costs millions to operate those plants today,” Avanzi said. “Those costs would go away, but we have to replace those resources with new resources, and there are costs associated with that.”

Those costs will be finalized before the June 3 meeting and factored into the rankings of the portfolios. Each portfolio assumes a different mix of solar, wind, hydro and other renewables, plus demand-side management to reduce energy usage.

There are pros and cons to each kind of renewable energy, Avanzi said.

Wind power doesn’t produce emissions, and the cost is fairly low, but “wind generally has to be built outside of our service territory, so there are costs associated with importing that energy to our system, generally in other parts of the state,” he said.

Wind produces energy only when it’s blowing; “it has what we call a capacity factor of about 40 percent, which means it only generates energy about 40 percent of the time,” he said.

Wind power also raises some stewardship concerns because of the land use and habitat impact it has.

Solar power also is a carbon-free, renewable resource that’s fairly inexpensive compared with other resources, “and the cost of solar continues to decline over time,” Avanzi noted.

But solar energy has a capacity factor of about 30 percent and requires batteries for storing power when the sun isn’t shining.

“There’s also concerns about the mining associated with the materials that go into solar panels and the land use solar takes,” he said. “There’s concerns about the retirement of solar and how you recycle those materials.” 

“We really need to see a lot of advancements in energy storage technology before we can expect to see 100 percent renewable resources realized,” he said.

All of these factors are being quantified, weighted and factored into the new rankings that will be assigned to the portfolios.

At the June 6 meeting, the advisory committee will determine which portfolio or portfolios to recommend to the utilities board, and will meet with the board to discuss its recommendations on June 17. The board is scheduled to consider approval of the final portfolio on June 26. 

The bottom line will be reliability, Avanzi said — keeping the lights on.

“The first and foremost criteria that our board decided and the community asked us to uphold is reliability,” he said. “So we can’t sacrifice reliability in any of these portfolios. As long as renewables can provide reliable power at a cost-effective rate for our customers, then they will certainly be a big part of our portfolio going forward.”

One factor that is not being considered is what would happen to the Drake plant when it is closed.

“The future of use of that land is not being studied in our integrated resource plan,” Trinidad said. “Our first step is to determine a decommissioning date, and then it is likely to take a few years to dismantle the plant.”

A substation that is the main source of energy for the downtown area will have to remain on the site when the plant is retired, but the future use of the rest of the site “will most likely not be a Utilities decision but a community one,” she said.

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