Public Service Co. of Colorado, which is a unit of Xcel Energy (NYSE: XEL), outlined in a Sept. 9 filing with the Colorado Public Utilities Commission its latest plans to shut off coal generation at Arapahoe Unit 4 and Cherokee Unit 4.
Those and some of the other PSCo coal units were basically mandated to be either shut or fuel switched under the state’s Clean Air-Clean Jobs Act, which was enacted by the legislature with specifics later approved in 2010 by the commission.
The Sept. 8 report summarizes the results of the company’s 2013 All-Source Solicitation which was issued in order to meet a 2018 electricity supply need of about 250 MW. The commission also directed the company to consider the retirement of two coal-fired units scheduled to permanently fuel switch to natural gas. When those retirements are considered the resource need is as high as 717 MW.
The solicitation was successful in attracting low-cost bids from wind and solar photovoltaic resources and from new and existing gas-fired generation. “In fact, the bid pricing received represents a watershed event for Colorado,” said the utility in the filing. “For the first time, the Company received bids for utility-scale solar PV resources that are cost-effective head to head with natural-gas-fired generation under base-gas price forecasts and no carbon emission cost adders. The gas-fired bids were not only low cost themselves, but also offered operational flexibility which helps system operators integrate intermittent generation from wind and solar onto the grid.”
One of the company’s objectives in its 2011 Electric Resource Plan (ERP) was to determine whether the continued operation of Arapahoe 4 and Cherokee 4 units as natural gas-fired peaking units, beginning Jan. 1, 2014, and Jan. 1, 2018, respectively, was cost-effective compared to other options.
The fuel-switched Cherokee 4 facility would provide 352 MW of capacity from 2018-2027. None of the bids received offered comparable capacity pricing. Continued operation of Cherokee 4 on gas is therefore part of the company’s preferred portfolio.
While bids were received that offered gas-fired peaking capacity at prices lower than that of Arapahoe 4, the pricing was not significantly different. Only when the better heat rate of these other gas peaking units (along with their enhanced flexibility) are taken into account within the Strategist computer model do the economics suggest that overall lower cost options are available and that Arapahoe 4 should be retired from service by Jan. 1, 2014.
The company is seeking approval in this docket to retire Arapahoe 4 and with that approval plans to file an application to decommission the whole Arapahoe Station in early 2014, since that would be the last unit operating at the site.
Cherokee 4 is currently capable of achieving full load on natural gas, therefore no modifications are necessary to achieve the fuel-switch to gas. Cherokee 4 will therefore continue burning coal up until the Jan. 1, 2018, when it is switched over to burn gas.
Located just south of downtown Denver, Arapahoe is a coal-fired generating station with two operating units; the 44 MW Unit 3 and the 109 MW Unit 4. It burns low-sulfur coal from the Powder River Basin in Wyoming. Units 1 and 2 (45 MW each) were retired in 2003 as part of Xcel Energy’s voluntary Denver Metro Emissions Reduction Plan. Unit 3 is to be shut by the end of 2013 under the Clean Air-Clean Jobs Act.
Located just north of downtown Denver, Cherokee is a coal-fired facility with three operating units. The plant also is capable of burning natural gas. The fuel is low-sulfur coal supplied by several mines in western Colorado. Xcel under the clean jobs law will early retire Cherokee Units 1, 2 and 3 (total of 365 MW), and install a natural gas plant (569 MW) at the site. The Xcel website and a plant update the company filed in March with the commission said the Cherokee repowering project schedule is:
- Unit 2 (106 MW) was retired in October 2011;
- Unit 1 (107 MW) was retired in April 2012;
- Unit 3 (152 MW) to be retired by the end of 2016;
- New, 569 MW natural gas combined-cycle generating plant comes online in 2015; and
- Unit 4 (352 MW) switched to natural gas in 2017.