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Colorado Springs lagging as state's utilities accelerate switch from coal to renewable energy

February 18, 2018 Updated: February 20, 2018 at 12:58 pm
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A loader moves coal outside Colorado Springs Utilities' Drake Power Plant in Colorado Springs in this 2008 photo. (Christian Murdock, The Gazette)

While other Front Range utilities are accelerating the switch to renewable energy, Colorado Springs remains committed to coal to a much greater degree to keep rates from spiking.

"The change is now driven by economics," said Xcel Energy Colorado president, David Eves, at the Colorado Communities Symposium early this month. "In the words of Gov. Hickenlooper, 'I don't know what people are opposed to, cleaner air or lower costs.' Truthfully that's where we're at."

Xcel Energy Colorado, which supplies power to Metro Denver and many other areas of the state, is on track to produce more than half its power - 55 percent - from renewable sources by 2026. Platte River Power Authority - a public utility that serves Estes Park, Fort Collins, Longmont and Loveland - generates about one third of its energy from renewables, and is finishing a 150-megawatt wind farm project that would push it over the 50 percent renewable mark.

Pueblo's goal is even more ambitious - 100 percent renewable energy by 2035.

Colorado Springs Utilities' has set its sights lower; the utility hopes to reach 20 percent renewables by 2020 with only a 1 percent rate increase.

"We certainly see that, in the long term, renewables are a better play for utilities than coal," Utilities' General Manager John Romero said. "We're carefully balancing the cost of adding a new resource and keeping rates low for our customers."

Most of the renewable energy would be generated by a solar project approved by the Utilities board last fall that is expected to be up and running by 2019. The project would boost the amount of Colorado Springs Utilities' renewable energy production from 9 percent to 15.6 percent, short of the 20 percent goal.

"It's baffling how out of step Colorado Springs Utilities seems to be with the rest of the state," said Robert Ukeiley, an attorney with the Center for Biological Diversity, an advocacy group for increasing protections for animals, plants and their habitat. "It raises some questions about what are the consequences of being so out of step with what everyone else is doing."

Ukeiley questioned Colorado Springs Utilities' evaluation of the economics of sticking with coal that persuaded some Utilities board members to put off closing the coal-fired Martin Drake Power Plant downtown until 2035, rather than in 2025 or 2030.

A faster transition, he said, would eliminate the potential for long-term rate hikes as the cost of renewables continues to plummet, incentivize clean energy businesses to move to Colorado Springs and mitigate the health impacts of burning coal.

Additionally, coal power plants are more expensive than the median for wind power plus storage and most solar power plus storage, according to a study by Carbon Tracker, an independent financial think tank that analyzes transitions from fossil fuels.

"If you just left Drake alone - just let it operate on its own - there still are wind contracts out there for the taking that equal Drake's fuel cost," Ukeiley said. "And there still is the cost of operation and maintenance."

Romero acknowledged the waning viability of coal, but cautioned against moving too fast at the risk of immediate rate hikes. The 20 percent goal effectively balances the inevitable migration toward renewable energy with the upfront cost to the city and taxpayers, he said.

"I don't see us as being left behind," Romero said, adding that the board plans to revisit and possibly revise the 2020 goal to something more aggressive in the next year and a half.

As a municipally-owned utility serving more than 40,000 customers, CSU, as well as Platte River Power Authority, is required to generate 10 percent of its energy from renewable sources by 2020, according to Colorado's Renewable Energy standard. Investor-owned utilities, like Xcel Energy and Pueblo's Black Hills Energy, are required to have 30 percent renewables by 2020.

Though the Public Utilities Commission does not have the authority to impose penalties on municipalities that fail to meet the standards, penalties will be issued on a case-by-case basis for investor owned utilities that fall short.

Colorado coal is far from dead, despite a wave of utilities turning to renewables. Nationally, coal makes up about 30 percent of electricity generation. In Colorado, 54.97 percent of electricity came from coal in 2016, while natural gas accounted for about 23 percent and wind a little more than 17 percent, according to the Colorado Energy Office.

"Clearly, we're not in the halcyon days of the early part of the decade when coal had 50 percent of the electricity market, but the whole narrative that coal is dead is belied by the fact that coal production and jobs increased in 2017," said Luke Popovich, a spokesman for the National Mining Association.

Popovich pointed to the Trump administration's rollback of environmental legislation such as the Mercury and Air Toxics Standard as the impetus for the resurgence of the coal market. The standard, put in place by the Obama administration in 2011, wiped out 78,000 coal jobs, Popovich said.

Though some of the workers were displaced by the surge in the natural gas market, many lost their jobs because the standard "massively interceded in the market to eliminate the major fuel source for electricity in the U.S.," he said.

"It was the first time in post-war history that we departed from an 'all-of-the-above' energy strategy where all fuels would be permitted in the marketplace," he said. "Let utilities and consumers decide what fuels can and should dominate."

In certain rural areas of Colorado, coal is a critical piece of the economic foundation. The town of Nucla near the Utah border, for example, is grappling with the impending closure of a power plant and nearby mine owned by Tri-State Generation and Transmission.

The closure threatens 83 jobs in the 734-person town as well as a bulk of its tax revenue that funds schools and other infrastructure, Tri-State representatives at the symposium said.

"The company is putting together a transition team that is going to be looking at a number of issues, including the needs of the employees, the needs of the community and the retirement process, and how we will decommission Nucla Station," Tri-State spokesman Lee Boughey told Telluride's Daily Planet newspaper.

It's a move that those outside of Nucla in liberal communities that are also customers of Tri-State applaud. Those communities, including many towns reliant on outdoor recreation, are pushing the power generation co-op to transition its energy portfolio to 100 percent renewables.

In October, more than 900 people and 111 businesses in Durango signed a petition calling for the city to commit to 100 percent renewables by 2050.

"Our economy is run by energy and, for 200 years, has been run by fossil fuels," said Durango Mayor Dick White. "We have to change that economy to renewables and take a course on climate change that should have been taken 20 years ago."

Such a massive transformation is not simple, White acknowledged. He compared it to trying to steer an aircraft carrier around a tight corner, especially when operating in rural communities with hyper-liberal and hyper-conservative communities living side-by-side.

But the issue is beyond the partisanship narrative of climate change. "It's an economic development issue," White said.

"I understand that looking at our energy sourcing is a challenge for all of us," White said. "We need to find ways to work together, get out of political dogma around climate change and get down to work.

Editor's Note: This story has been corrected to say that Nucla is near the Utah border. A previous version of the story said it was near the New Mexico border.

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