Colo. regulators tell Xcel Energy to study earlier retirement of Comanche unit 3

Xcel Energy Inc.'s plan to keep operating unit 3 at the 1,426-MW Comanche plant through 2034 is facing stiff resistance from Colorado regulators.

All three members of the Colorado Public Utilities Commission said March 14 that they oppose a deal that would allow the troubled coal-fired unit in Pueblo County, Colo., to operate through Dec. 31, 2034, The Colorado Sun reported.

There was no formal vote taken at the hearing into Xcel Energy's electric resource plan and proposed retirement of the coal-fired unit, which has been offline since late January, according to the report.

In a November 2021 settlement filed with state regulators as part of the company's electric resource plan (docket 21A-0141E), Xcel Energy subsidiary Public Service Co. of Colorado agreed to move up the retirement date of Comanche unit 3 to Dec. 31, 2034. Xcel Energy originally proposed retiring unit 3 by 2040, decades ahead of its useful lifespan.

The 766-MW unit, which began operating in 2010, has been out of service since tripping offline Jan. 28 following a problem with a transmission breaker.

"I have major concerns about reliability," Commissioner John Gavin said at the March 14 hearing, according to The Colorado Sun. "Having an unreliable asset in your dispatch stack may be worse than not having it there at all."

In addition, Commissioner Megan Gilman and PUC Chairman Eric Blank reportedly voiced concerns about binding future commissions to the continued operation of Comanche 3, as well as whether running the unit longer is in the interest of ratepayers and the environment.

The commissioners instead asked Xcel Energy to analyze a 2029 closure of Comanche 3, the newspaper reported.

Under the November 2021 settlement, operations of Unit 3 would progressively decline beginning in 2025 to a level not exceeding 33% of its annual capacity factor for the years 2029 to 2034.

Xcel Energy valued the unit at $626 million in a November 2021 securities filing.

The Comanche plant began service in 1973 with its 325-MW unit 1 and added the 335-MW unit 2 in 1975, according to S&P Global Market Intelligence data. Both of the older units are still used frequently. CORE Electric Cooperative owns a 25% interest and Holy Cross Electric Association Inc. owns an 8% interest in unit 3.

Comanche unit 1 is set to retire in December 2022, followed by unit 2 in December 2025.

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