trending Market Intelligence /marketintelligence/en/news-insights/trending/DLw0QUcPwMn476CJ4PzUpQ2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Retirement date set for Xcel coal plant in Texas, pending regulatory approval

European Energy Insights July 2020

As COVID-19 Wears On, Regulators Examine Moratorium Extensions, Cost Recovery

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions

Retirement date set for Xcel coal plant in Texas, pending regulatory approval

Under a rate settlement agreement pending approval by state regulators, Xcel Energy Inc. subsidiary Southwestern Public Service Co. will retire the two steam turbines that make up the 1,067-MW Tolk coal-fired plant in Texas by the end of 2032. However, the deal also provides for the parties to come back to the table and request a different retirement date depending on the findings of a required independent analysis.

Staff with the New Mexico Public Regulation Commission, several environmental groups and the state attorney general signed onto the agreement. The independent analysis to be conducted under the settlement will evaluate capacity replacement, "economically optimal [...] abandonment dates" and the rate implications of various closure scenarios, including whether Southwestern Public Service retires or replaces all of its coal-fired units before 2030.

The company serves customers in both Texas and New Mexico.

Although the agreement sets a retirement date for Tolk of Dec. 31, 2032, it states that depreciation rates will "be calculated based on a remaining useful life through Dec. 31, 2037." That adds $8 million to the total depreciation expense, according to a Form 8-K filed with the U.S. Securities and Exchange Commission, but Xcel spokesperson Wes Reeves said it would help reduce the rate impact of a shorter depreciation period.

According to Reeves, the accelerated retirement is necessary because the generation station no longer can depend on the Ogallala Aquifer for its groundwater needs beyond 2032. Southwestern began reducing operations to minimum load at Tolk in 2019 during off-peak months to conserve water, and the utility plans to continue doing so through 2020, Reeves noted. From 2021-2032, he continued, the plant will be idled during off-peak months.

In a statement, the Sierra Club said "this settlement is an important step toward getting off dirty, polluting coal in both New Mexico and Texas, and conserving the panhandle's precious water supply."

"A rapid transition away from coal and towards renewable energy, storage technologies, and efficiency is essential to solving the global climate crisis and ensuring a sustainable water supply for the arid west," the Sierra Club said. And a still earlier retirement would help conserve even more fiscal and water resources, the group added.

In its New Mexico service area, Southwestern Public Service will receive a base rate revenue increase of $31 million under the agreement, with a 9.45% return on equity, or ROE. The utility initially sought a $51 million base rate increase with a 10.35% ROE. In the Form 8-K, Southwestern Public Service noted that it "anticipates final rates will go into effect in the second or third quarter of 2020."