King Coal, politics and the new energy economy

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Altogether, power production has more than doubled while total air pollutants – except for carbon dioxide – have been reduced. All this comes at a cost, $1.3 billion altogether among the three units. A nuclear power plant would have taken much longer to build and at much higher cost, perhaps $7 billion to $8 billion.

Electrical output at this new plant – 750 megawatts after meeting in-plant needs – will serve a city of 750,000 people but ends up in many places. Xcel, Colorado’s largest electrical provider, owns two-thirds of production, and Intermountain Rural Electric Association a quarter. Of IREA’s 138,000 customers, two-thirds live in Castle Rock, Parker and other south metro suburbs.

“We wanted a stable, long-term, low-cost source of power,” says John Pope, IREA’s assistant general manager.

Holy Cross Energy owns the remaining 8 percent of Comanche 3, supplying Vail and most of Aspen westward to beyond Rifle.

Global warming activists in mountain towns have heartburn about the new plant. Auden Schendler, the Aspen Skiing Co.‘s executive director of community and environmental responsibility, says Holy Cross’ investment in the plant reverses gains the utility made to reduce its carbon footprint, directly affecting Aspen Skiing’s footprint. “Comanche 3 will essentially increase our carbon intensity,” Schendler says. “It will move us in the wrong direction.”

20th century abundance

Nobody disputes the great utility of cheap, abundant electricity. Central to this abundance has been coal, which accounts for 51 percent of Xcel’s power supply mix. The plants were small at first, but after World War II they became ever-larger, controlled largely by monopolies responding to growing demand. In places, however, other types of electrical production were bumped aside. Aspen had used a small hydroelectric plant since 1892, but in 1958 abandoned it – because coal power was slightly cheaper and less of a headache.

Similar to national trends, the last coal plant in Colorado went online in 1984, and then was followed by smaller plants burning natural gas. Within Xcel’s portfolio, gas grew from 6 percent to 48 percent in just nine years. More expensive than coal, natural gas can ramp up more rapidly for peak demands, such as air conditioners. Gas prices, however, have always been volatile, in recent years swinging wildly between $2 and $13.50 per million Btu of heating value. Doubts also grew about long-term supplies.

By 2004, utilities were galloping toward another round of coal plants in Colorado and across the West. Driving demand were population growth and greater per-capita use. Xcel forecast the need for 2,000 more megawatts over its Colorado capacity of 7,200.

Environmental groups believed they could pester the utilities, slowing but not blocking construction. Utilities had laws, regulations and political help on their side. Bill Owens was governor and his appointees to the Colorado Public Utilities Commission, the body that regulates Xcel and other investor-owned utilities, reflected his sensibilities.

“The debate at the (PUC) then wasn’t whether to build a coal plant,” says John Nielsen, energy program director of Western Resource Advocates, a Boulder-based group. “It was about how many coal plants would be built, and who would own these plants, and what kind of technology they would use.”

PUC’s governing of Xcel has traditionally been driven by low costs and reliable service, with lesser consideration given to environmental impacts. Entirely new to utility governance were concerns about emissions of carbon dioxide, a byproduct of coal combustion and a key greenhouse gas for which no removal technology has been proven at an acceptable price or on a large scale.

And finally, Xcel in the early 21st century was in many ways the same utility it had been in the 1960s, when it was busy building new coal plants. It had begun investments in alternative energy but in 2004 spent huge amounts of money to oppose Amendment 37, the renewable energy mandate. Company representatives later said Xcel’s opposition was founded in concerns about poorly written provisions.

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