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Uncertainty about environmental policy changes leaves Drake decision on hold

By: monica mendoza
April 16, 2014 Updated: April 17, 2014 at 11:25 am
Caption +
The Martin Drake power plant just southwest of downtown Colorado Springs Thursday, January 24, 2013. (Mark Reis, Gazette file)

Colorado Springs City Council should not make a hasty decision based on federal regulations when it comes to closing Martin Drake Power Plant, an energy regulations expert said Wednesday.

It could be several years before additional federal regulations related to greenhouse gases and the Clean Air Act are released that would affect coal fired plants, said Robert Talley, of the Washington D.C.-based Talley & Associates. He told the council, which is the Colorado Springs Utilities Board, that significant regulatory changes likely won't be released for a year and then it would be several years after that before required implementation.

"Until we have that information, its difficult to narrow down the risk to regions or even facilities," he said.

"At least for now there is not enough information or risk to force an imminent action," he said.

That analysis seemed to resonate with some council members, who have given themselves a summer deadline to make a decision on whether to retire the 50-year-old downtown coal fired plant or keep it open for the next 30 years and fully reap the $131 million investment it has spent on scrubber technology to meet current federal regulations.

Council member Joel Miller said the national movement toward natural gas will drive up fuel prices, which presents a huge risk for Colorado Springs Utilities.

Miller said if the council chose to leave Drake open for the next 20 or 30 years, it could always reverse the decision if some new federal regulations were approved that made it too expensive to keep open.

"Once we shut it down, we're done," he said. "From what I'm hearing with risk and uncertainty, waiting would be the prudent way to go."

Council member Val Snider said the board still must consider the political risks, which might include a community that wants the coal fired plant shut down.

"The regulatory risk is least imposing - it takes so many years for the state to implement the rules," Snider said "That narrowed it to the political risk and legislative risk, meaning what are the environmental priorities for this city?"

City Council has been wrestling with the issue of Drake's future for more than a year, when the council ordered a study on the decommissioning of the power plant. Over the next few months the City Council will deliberate over financial and environmental reports related to the downtown Drake plant.

The council has 12 alternatives to consider. Among them is closing Drake in the next three to five years and replacing the energy source with natural gas, which would cost about $242 million more than keeping the plant open for 20 years.

But an immediate closure of Drake has more social and environmental benefits, according to a report by an independent consultant. The report estimates Utilities would avoid spending $753 million - the monetized value of the repercussions of greenhouse gas emission and other environmental and social costs.

Sam Masias, who has been following the Drake issue for years, said he wants the plant closed down. But he fears the City Council is leaning toward keeping the plant open for the next 20 or 30 years.

"What they will do is keep it going - that is the politics of it," he said. "But the implications and pollution coming out of there are too great - that plume over the city, where is it all going?"

Talley said no one can predict the national political risks when it comes to environmental law. The U.S. Senate could see a change in leadership if Republicans can take over six seats in the next election. However, that still leaves a Democratic administration, Talley said.

"Politically, we have talked at great lengthy about the war on coal," Talley said.

In his report to the council he wrote, "The Presidential agenda is not likely to waiver with a continued emphasis on addressing greenhouse gas emissions through regulatory means."

Legislatively it has been difficult to move environmental law and lawmakers have been sitting on proposed EPA changes for more than year, Talley said.

What that means is the City Council should concentrate on the regulatory risks and at the moment those risks are years away, he said.

But the city cannot sit around and wait, said council member Jan Martin. The council has to make plans for the future and give Utilities direction, she said.

"What I hear you say is we shouldn't make a hasty decision," she said.

"That it would be a mistake to make a short-term decision . . . But on the other hand I think it would be a mistake to keep it open forever."

Snider said the council will discuss in the next few months the Utilities Electric Integrated Resource Plan - a plan that maps out the Utilities electric resources, use and demand for the next 20 years. Drake is a critical component of the overall energy plan, he said.

In other business:

Colorado Springs Utilities Board will now be headed by Council member Merv Bennett.

The board, which is the City Council, voted Wednesday to make the change to the board's by laws that says the City Council president does not automatically become the board chairman.

Council president Keith King, who has been the Utilities board chairman since he took office last April, said the council wanted to divide the duties because Colorado Springs Utilities has a $1.1 billion annual budget while the city has a more than $400 million budget.

"It would be beneficial to have one focused on the council and one on utilities," he said.

Bennett was named Utilities chairman in 6-2 vote, with one council member absent. King passed the gavel to Bennett and he ran the rest of the meeting.

"We've got a lot of work to do here," Bennett said. "I'm excited to accept this position."

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