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Speeding up plant closure would cost rate payers - KOAA.com | Continuous News | Colorado Springs and Pueblo

Speeding up plant closure would cost rate payers

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COLORADO SPRINGS -

Later this month, the Colorado Springs Utilities Board will decide whether to speed up the closure of the Martin Drake Power plant by as much as a decade. The coal-fired plant is currently scheduled to close by the year 2035.

Cost estimates prepared for the board show an accelerated timeline could increase the overall cost by hundreds of millions of dollars. Those higher costs would then be paid for by rate increases levied against customers.

The board is considering three separate scenarios to replace the power that is currently produced at Drake. 

1.) Build a 1-megawatt solar farm and a new 128-megawatt natural gas plant on the current property.  This would require less land, opening up around 16 to 20 acres which are currently occupied by the existing plant buildings.
2.) Remove the plant and replace the power by purchasing electricity on the market. This would free up even more land.
3.) Remove the plant and replace the electricity through a combination of new power generation and outside energy purchases.

Board member Andy Pico sees no need to rush things.

"I'm not in favor of that. We spent an awful lot of time coming up with the plan that we have right now," Pico says.

He says switching to the gas/solar combination will cost customers more on their bills for the fuel alone.  Pico points to the rate hikes that came after a fire forced a plant closure in 2014.

"The fuel cost portion of your bill went up about 5 percent and that was solely the difference in generation cost using natural gas over the coal," says Pico.

The various scenarios are estimated to cost around $600 million over the next 17 years. Pico says a slower timeline would allow those costs to be increased more gradually.

"We can keep rates within the rate of inflation," Pico says. "If we accelerate that, then we not only have to do all that generation work and transmission work sooner, but we're also paying the fuel costs of making the conversion."

Richard Skorman thinks the City should be thinking about investing in renewable energy sources like wind and solar because they have no fuel costs and would be a cleaner long-term option.

"Because the wind and the sun, you don't pay for those costs on a daily basis. It doesn't mean we don't have an initial investment but in the long term, it might really be cheaper for ratepayers," says Skorman.

Both board members are leaning against an accelerated timeline. However, Skorman thinks the City should go ahead with proposed transmission system upgrades associated with the Drake decommissioning regardless of how the power is replaced.

"The sooner we do that, the more options we're going to have for renewable energy, to partner with our neighbors Xcel and Black Hills Energy,"  says Skorman.

That partnership would come in the form of proposed Regional Transmission Organization in which the big power generators in Colorado and surrounding states would pool their electricity. Individual utilities could theoretically buy and sell power from that pool at lower rates than those offered on national markets.

"Then we would have the replacement power for Drake, but the problem is that we don't have the transmission lines to bring it into downtown and that's what we have to do anyhow," says Skorman.

The pressure to speed up the timeline for decommissioning seems to be driven by environmental concerns. Colorado Springs Utilities is defending itself litigation over its emissions. A suit filed by the Wild Earth Guardians alleges that CSU violated the Clean Air Act by not continuously monitoring the emissions at Drake.  Colorado Springs Utilities denies the allegations.

The City invested around $200 million for emissions "scrubbers" designed and built by Neumann Systems Group to capture sulfur dioxide released by burning the coal. Stack data recorded by Colorado Springs Utilities over the last 30 days show SO2 levels below new federal requirements. 

However, air pollution regulators with the Colorado Department of Health and Environment continue to give Drake a designation of "Unclassifiable" due to conflicting data measurements from sensors located in neighborhoods around the power plant.

The board will decide on the decommissioning timeline at its December 18th meeting.

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