In July, the Public Service Co. of Colorado unit of Xcel Energy (NYSE: XEL) filed two separate applications with the Colorado Public Utilities Commission which, if approved, would result in the purchase of new natural gas units and the retirement of the Arapahoe 4 coal unit.
The first is an application to purchase Brush Power LLC and all of its assets including Brush generating Units 1, 3 and 4 for a total purchase price of approximately $75m, said Xcel in an Aug. 2 earnings statement. Located in Brush, Colo., the units have a total capacity of 237 MW, including Brush Unit 1, a 60 MW combined-cycle unit; Brush Unit 3, a 30 MW simple-cycle unit; and Brush Unit 4, a 147 MW combined-cycle unit.
The purchase is subject to various regulatory approvals including that of the CPUC. The Brush units currently provide energy and capacity to PSCo under purchased power agreements that are set to expire in 2017 for Brush Unit 1 and Brush Unit 3, and 2022 for Brush Unit 4. The transaction, if approved, is expected to result in savings to wholesale and retail customers.
The second July application seeks approval to retire Arapahoe Unit 4, a 109 MW coal-fired company-owned facility at the end of 2013. This would be an alternative to permanently fuel switching Arapahoe Unit 4 to natural gas, which is an option the commission has previously approved, and instead replacing the capacity and associated energy with a natural gas purchased power agreement with an existing generator.
A decision on both applications is expected between December 2012 and March 2013.
In the meantime, PSCo said it won’t need a synchronous condenser, which would provide local grid support, at its to-be-retired Arapahoe Unit 3, after all. Robin Kittel, employed by Xcel Energy Services as Director, Regulatory Administration, explained the change of plans in July 26 testimony filed at the CPUC. The synchronous condenser had been approved by the commission under the utility’s plan to comply with the state’s 2010 Clean Air Clean Jobs Act (CACJA). That plan involved a number of coal unit retirements and coal-to-gas switching.
Even without the Arapahoe 3 synchronous condenser, the Denver metropolitan transmission system complies with the voltage stability and reactive resource adequacy metrics specified in the WECC System Performance Criteria, Kittel said. “At the time we filed our CACJA Plan we believed that re-using Arapahoe 3 as a synchronous condenser was necessary to maintain transmission voltage stability in the Denver metropolitan area, stability that was adversely impacted by the retirement of generation units in the Denver Metropolitan area,” Kittel noted.
A synchronous condenser is basically a synchronous motor that has had all mechanical load removed from the shaft. By adjusting the field excitation of this motor, the Volt-Amps-Reactive (VARs) produced by the machine can be controlled so that it behaves as a variable source of reactive power. This synchronous motor, referred to as a synchronous condenser, does not burn any fuel and has no emissions.
In December 2010, the commission approved the following CACJA plan:
- Shutdown Cherokee Units 2 and 1 in 2011 and 2012, respectively, and Cherokee 3 (365 MW in total) by the end of 2015, after a new natural gas combined-cycle unit is built at Cherokee (569 MW);
- Fuel-switch Cherokee 4 (352 MW) to natural gas by 2017;
- Shutdown Arapahoe Unit 3 (45 MW) and fuel-switch Unit 4 (111 MW) in 2014 to natural gas;
- Shutdown Valmont Unit 5 (186 MW) in 2017;
- Install selective catalytic reduction (SCR) for controlling NOx and a scrubber for controlling SO2 on Pawnee in 2014;
- Install SCRs on Hayden Unit 1 in 2015 and Hayden Unit 2 in 2016; and
- Convert Cherokee Unit 2 and Arapahoe Unit 3 to synchronous condensers to support the transmission system.