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Xcel Energy plans to run its Colo. system with 53% renewable energy by 2026

Xcel Energy Inc. says that it will use wind, solar and battery storage to supply the majority of the electricity needs of its Colorado customers by 2026.

Through its Public Service Co. of Colorado subsidiary, Xcel Energy submitted its resource selections from its 2017 all-source solicitation in a report on June 6 to the Colorado Public Utilities Commission. The solicitation resulted in more than 400 bids for new power supply. The PUC is expected to rule on the company's selections in September, according to Xcel Energy spokesman Mark Stutz.

Known as the Colorado Energy Plan, the Xcel report represents one of the most ambitious renewable-energy programs in the U.S. In California, for example, the California Public Utilities Commission has said that state's utilities will reach the goal of supplying 50% of the state's electricity from renewable sources by 2020, a decade early.

The report describes the selection of 11 new and existing projects located in eight Colorado counties, Stutz said. In 2017, the company generated 28% of its electricity in Colorado from renewable sources, including 23% wind, 3% solar and 2% hydropower. If the PUC approves Xcel Energy's selection of new wind resources, the company will have an energy mix of 39% wind, 13% solar and existing hydro for a total of at least 53% renewables by 2026.

The report also calls for retiring 660 MW, or one-third of Xcel Energy's remaining Colorado coal generation capacity, by closing the coal-fired Comanche units 1 and 2 in Pueblo, Colo., about 10 years early, reducing carbon emissions by nearly 60%. This will save customers more than $200 million compared to continuing to operate the coal units, the utility said.

"By making this step change now, we reduce future fuel costs for the long term — and we can pass those savings directly along to our customers," said Xcel Energy Colorado President Alice Jackson.

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Based on the resource selections, Xcel Energy would add more than 1,100 MW of wind generation, about 700 MW of utility-scale solar generation and 275 MW of large-scale battery storage. Three of the five solar projects would include battery storage.

Xcel Energy also wants to acquire two existing natural gas plants, totaling about 380 MW of capacity, to balance the intermittent renewable resources. (Xcel declined to name the gas plants but included their locations on the map above.) The company would also buy a 500-MW wind farm in eastern Colorado. The rest of the wind capacity and all solar and storage will be contracted with third parties in power purchase agreements.

The preferred-resource report also includes less ambitious alternatives, including continuing to run the coal units and other portfolios with more limited additions of new resources. Retiring the coal units will open existing transmission capacity for renewable energy, Stutz said. Comanche unit 1 was originally set to retire in 2033 and unit 2 in 2035, but the company now plans to retire unit 1 in 2022 and unit 2 in 2025.

The plan has the support of a number of environmental and clean energy advocates.

"Xcel's Colorado Energy Plan proves utilities know clean energy and battery storage are more than capable of providing low cost, clean, and reliable energy to power our communities and grow our economy," said Zach Pierce of Sierra Club's Beyond Coal Campaign in a statement.

Western Resource Advocates Chief Energy Counsel Erin Overturf said in a statement that the plan will reduce air pollution, create renewable energy jobs, save customers money and reinforce Xcel Energy's position as a national leader in clean energy.

An independent evaluator will review the company's choices over the next 30 days and present recommendations to the PUC, which will also consider public comments this summer before rendering a decision, Stutz said.