How much delayed retirement for Xcel’s coal-burning unit?

Proposed agreement would allow continued use of Comanche 2 through 2027. Speakers urge PUC commissioners to minimize use to bare minimum — or less.

by Allen Best

Ever buy a new car that turned out to be a real lemon, always in the shop for repairs? In the case of Colorado’s electrical generating resources, that lemon would obviously be Comanche 3, the 750-megawatt unit at Pueblo.

The coal-burning unit went live in July 2010. But it has been in the shop repeatedly and for extensive repairs, most recently from August 2025 until mid-August 2026. In its absence, Xcel Energy, the operator and primary owner, sought and obtained permission from the Colorado Public Utilities Commission to delay the retirement of a different coal-burning unit at Pueblo, Comanche 2, a 1970s-era unit that had been scheduled to close in December 2025.

So, both Comanche 2 and 3 are up and running now, if not necessarily at full bore. But should Xcel be allowed to continue operating Comanche 2 through 2027 and possibly beyond? If so, what conditions should be imposed?

Too, is there a better way, leaning harder into programs designed to ratchet down electrical use during times of peak demand? And in the background is the assertion posed by critics who contend that Xcel steers its course with the profit motive tainting its decisions.

These are among the core questions facing the PUC commissioners today as they evaluate the settlement agreement proposed by Xcel with the Colorado Energy Office, the Office of Utility Consumer Advocate and various other parties. The time slot from 9 a.m. to 5 p.m. suggests they will have plenty of questions.

The proposal being evaluated would also allow Xcel to invest in repairs of Hayden 2, another coal-burning unit that also broke down, hurry up completion of two new gas-burning units at St. Vrain, and extend select wind and hydro power-purchase agreements and add a short-term gas power agreement.

“The company has significant capacity shortfall for 2027 that should be addressed but cannot be satisfied by market purchase alone,” said Erin O’Neill, deputy director of fixed utilities on the PUC staff, in testimony submitted on Oct. 13. She identified January and February as Xcel’s concerns, and next summer, too.

The Colorado Energy Office is on board with the proposal. CEO’s Keith Hay said in testimony submitted in October that keeping Comanche 2 operating will not preclude Xcel — and Colorado — from meeting its 2030 clean-energy targets.

As for Xcel’s resource adequacy, Hay said the company has demonstrated no evidence of reliability concerns in 2028.

Still, the agreement would allow Xcel to seek to continue Comanche 2 operations through March 2028. It would have to justify that, however. And there is a clause allowing it to ask to go beyond March 2028, but it would have to prove unforeseen extenuating circumstances or emergency conditions that could not be mitigated through other means such as increasing demand response and market purchases.

Yesterday, the PUC commissioners took public comment, the second session in recent months. The first was held before the proposed settlement had been announced. Many of the dozen-plus speakers saw a big, big problem with this proposal to extend the life of Comanche 2. Many speakers objected to continued burning of coal, because of the pollution it creates.

“I spent half my youth above timberline,” said Eric Darst. “These days, things have changed. The St. Mary’s Glacier that I boot-skied is gone. The Blue Mesa Reservoir is almost empty. And now we are seeing destructive floods in the Four Corners destroying our communities. It’s heartbreaking and the result of gluttonous use of fossil fuels.”

The problem, he said, was Xcel’s insufficient planning and investment for the future. He also suggested that Xcel’s profit motive — it is privately owned, with dividends to shareholders steady and in some cases handsome — was at fault.

Many speakers said use of Comanche 2 should be allowed only when absolutely necessary to meet peak demands.

Eric Frankowski, director of the Western Clean Energy Campaign, offered the most colorful images. “Pick a simile,” he said. “Xcel wants to use a sledgehammer for resource adequacy when all it really needs is a thumbtack. It’s like proposing major surgery for a hangnail or using a backhoe to pull up a dandelion.”

Xcel, said Frankowski, has said it needs almost 400 megawatts of reserve capacity in the coming months of January and February and then 500 megawatts of capacity next summer as air conditioners crank up.

“That’s incredibly imprecise,” he said. Frankowski said closer examination reveals that Xcel needs additional capacity “only to fill holes that can be measured in hours, maybe even a few days, but certainly not entire weeks or months. And there’s absolutely no way it requires running a nearly 400-megawatt coal unit at capacity for an entire year, especially when it wants customers to fork over $77 million to cover the cost.”

Xcel, he insisted, has many tools to suppress demand to avoid use of the power plant. “You can use this proceeding to force Xcel to expand its efficiency in demand-side management programs and to double down on accelerating the adoptions of more affordable and cleaner resources.”

Some of the comments overlooked the fact that all coal plants are slow to ratchet-up operations. Some take 18 to 24 hours. This is unlike natural gas peaker plants, most of which can crank up in 18 minutes, with newer versions requiring even less time.

Beyond the unreliability of Comanche 3, are there other factors causing Xcel to see itself needing Comanche 2 to ensure it can keep the air conditioners and all else on?

The utility has run into troubles in getting the fifth and final leg of its 550-mile Colorado Power Pathway transmission line built to deliver electricity to metropolitan Denver-Boulder, where the vast majority of its 1.6 million customers exist. But that was a predictable problem.

Supply chains have kinked up in some instances. As for new demand from data centers, Xcel has predicted it – but, at least so far, it has not materialized, said Eric Blank, the chair of the PUC commissioners, at an energy storage forum during September.

Exactly what has caused Xcel to come up short isn’t clear, at least to this writer.

Many commenters suggested that Xcel should be forced to choke down some of the added expense of keeping the air conditioners on. Three speakers cited the social cost of carbon.

The social cost of carbon used by the Colorado Department of Public Health and Environment is currently $89 per ton. That figure attempts to reflect the economic damages such as to crop yields or because of flooding caused by emitting one additional metric ton of carbon dioxide into the atmosphere.

Heidi Leatherwood, the climate policy analysist for 350 Colorado, said the PUC should require Xcel to pay Colorado the social cost of carbon for each ton of carbon dioxide resulting from keeping the plant open longer than its original retirement date.

Many speakers urged the PUC commissioners to lean hard into greater demand-side management programs. Ellie Andrews, an advocate with the Environment Colorado Research and Policy Center, cited a 2022 study that concluded that reducing net peak demand by 700 megawatts that year would have required load reductions for just 21 hours.

“Of course, the grid is changing, and these numbers are changing rapidly,” said Andrews. “But the point remains the reductions can be made through improved efficiencies, demand management and other fruit that is reasonably low-hanging.”

For example, she continued, that can include requiring data centers and other large-load users to participate in load-shifting programs such as messaging that asks customers to shift or reduce their use, time-of-use rates, and virtual power plants (such as home batteries)

Xcel has many demand-management programs that currently exist. They include Critical Peak Pricing, Peak Day Partners, Peak Partner Rewards, and Renewable Battery Connect and still others. The question is whether Xcel could apply more muscle into these and other programs in short order.

“The PUC should carefully scrutinize hourly demand data in order to determine the actual extent of shortfalls and how they should be addressed,” said Glenn Fieldman, an Arvada resident who retired in 2024 as an associate professor in the environmental studies program at San Francisco State University.

While the proposed settlement agreement would restrict Xcel to operating Comanche 2 at 63% of its total capacity, it does not place restrictions on how many hours. The peak load problem, said Leslie Glustrom, might total no more than 1% of the time of each year, or 87 hours — and likely less. Xcel should not have authority to operate it for 5,000 hours.

PUC commissioners in recent days have also received a flurry of comments from across Fort Collins, Golden, Louisville and even Como, in South Park. They spoke as if coming from the same choir about alternatives. “Enough of the fossil fuels already,” wrote Fred Kirsch from Fort Collins. “Coal plants are a thing of the past. Get rid of them,” said Erik Mark Ehlert of Denver.