Colorado Springs News, Sports & Business

Optimism over Springs developers' plan for hydro plant near Penrose

R. SCOTT RAPPOLD Updated: April 1, 2011 at 12:00 am

Two Colorado Springs developers are moving forward with a plan to build a hydroelectric plant near Penrose in Fremont County, and they have elicited some powerful interest.

Jim and Mark Morley of the Morley Cos. have been working for years on a proposed plant on land they own near Brush Hollow Reservoir. The developers have piqued the interest of energy giant TransCanada, as well as state lawmakers, who passed a bill — signed Tuesday by Gov. John Hickenlooper — to encourage this and other such projects.

Instead of a traditional hydroelectric plant powered by flowing water, the Morleys want to build the third pumped hydroelectric storage plant in Colorado. It would work by pumping water uphill to a reservoir when demand is low and letting it run down to power turbines when electric use is high or other parts of a system, such as solar or wind, are not generating much power. The water is used over and over. This form of production doesn’t impact aquatic life by warming water or acting as a barrier to fish like many traditional hydro plants.

“Pumped storage is somewhat of a unique energy asset, because it provides not only energy storage but significant benefits to the transmission system,” said Kyle Nenninger with Chicago-based Energy Advisory Partners, who is assisting the Morleys on the project.

The proposed plant would have the capacity to generate 432 megawatts — a megawatt powers 750 to 1,000 homes at any given time — and employ 300 workers during construction and provide 25 to 30 permanent jobs, Nenninger said. He said the reservoirs above and below the plant probably would not be open to public recreation.

There are many uncertainties, including who would provide a one-time sale of 13,000 acre-feet, or 4.2 billion gallons, of water — to be piped from the Arkansas River — to run the plant.

TransCanada, which could build and run the plant, has not committed to the project, said company spokesman Shawn Howard. Company representatives visited the area last month to hear about the project.

“If you believe that it’s viable, you obviously want to move forward as quickly as you can. But there’s a lot of due diligence that we’re having to do, because it could represent a long-term commitment if we find it viable,” Howard said.

He said the project is promising because the land is available and has an adequate slope, and there are electric transmission lines nearby.

A bill introduced by state Rep. Keith Swerdfeger, R-Pueblo West, also makes it attractive.

House Bill 1083 soared unanimously through the General Assembly in March. It directs the Public Utilities Commission to consider hydroelectric and pumped hydroelectric power as clean energy projects, which allows utilities to recover the cost of the projects through higher rates.

Exactly who would be paying those rates is unknown. Nenninger said that is an “open question.”

Much of the uncertainty over the project is because the Morleys’ proposal has been under review by the Federal Energy Regulatory Commission for more than four years. Nenninger does not know when that agency will make a decision on the hydropower application.

“We’re going as fast as we can, but we’re kind of at their mercy,” he said.

One potential customer is Colorado Springs Utilities, which gets a summertime peak of 35 megawatts from its four small hydroelectric plants in the foothills. But the city-owned utility in 2003 declined an offer by the Morleys to store water in Brush Hollow Reservoir, which they originally proposed to expand for a hydro plant as an alternative to Utilities’ Southern Delivery System pipeline from Pueblo Reservoir.

Spokesman Steve Berry said it is “premature” to say if Utilities would be interested in buying power from the plant.

“It’s one of those things where we’d have to look at the details of the project — and with this new one, I don’t know that we have — and the cost associated of tapping into it, and is it something our customers would accept?” he said.

The other pumped storage hydroelectric plants in Colorado are also in rural areas: Xcel Energy’s 300-megawatt Cabin Creek plant near Georgetown and the U.S. Bureau of Reclamation’s 200-megawatt Mt. Elbert Powerplant at Twin Lakes.

Some in unincorporated Penrose are cautiously optimistic about the proposal.

Bill McGuire, president of the Penrose Chamber of Commerce, said most residents have to commute to Colorado Springs, Pueblo or the prisons in Cañon City for jobs, so the possibility of local jobs is encouraging.

“Jobs are pretty scarce down here,” McGuire said.

“We all think it sounds like a fascinating project,” said Fremont County Commissioner Debbie Bell, who represents Penrose. “Generating electricity during the day and pumping the water back at night sounds almost futuristic.”

No permit request has been submitted to the county, she said. Her only concern with a hydro plant would be that it not take away from the rural character of the area.

“A good clean industry, renewable energy — from a commerce perspective, it would be great to have the extra people coming down to Penrose,” said Pete Mugasis, owner Coyote’s Coffee Den, who has heard no negative talk about the proposal.

“I would certainly love to have a percentage of 300 employees’ latte business.”

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