Last month, the Environmental Protection Agency (EPA) made a preliminary announcement that helps us in our ongoing efforts with the State of Colorado to identify a retirement date for the Nixon Power Plant beyond 2029.
The EPA’s preliminary decision, in simple terms, removes federal enforcement activity around the closure of Nixon. We still must work with the State of Colorado to find a more suitable retirement date.
We remain committed to ensuring our energy system is reliable, cost-effective, and environmentally responsible, for both our customers and our community.
We have been in talks with the State of Colorado to discuss the challenges we face in securing a reliable, cost-effective replacement for our coal-fired Ray Nixon Power Plant.
Our Sustainable Energy Plan, which outlines our long-term energy plans and includes the retirement of Nixon by 2030, has been challenged by a volatile market and uncertain regulatory future for new renewable energy projects. These forces have created a perfect storm that we could not have foreseen when we developed our original plan.
Last year, we received more than 200 responses to our requests for proposals for new electric generation that would help serve as that replacement.
The costs were staggering – at least 60% higher than expected for wind and 50% higher for solar.
We need a better outcome, and we have been communicating with our state and federal partners about the costs and reliability problems associated with retiring Nixon at a time when power is needed.
Though we closed the Martin Drake Power Plant 10 years ahead of schedule, there are distinctions between the two plants. Drake was a 100-year-old plant, and closing it made good financial sense – it would cost roughly $200 million annually to operate and maintain.
Nixon, on the other hand, still has more time before it’s true “end of life.” I like to compare this to vehicles: if you still have plenty of safe miles left on your vehicle, it makes good financial sense to keep it before getting an expensive loan for a replacement.
This is what we are asking to do with Nixon. We know it doesn’t make sense to run it forever, but we do need more time to run it while we find a sustainable option that also makes sense financially.
We will continue to pursue renewable options; however, a reliable system must have base load generation, like coal or natural gas, that can run and support the system when the wind doesn’t blow and the sun doesn’t shine.
Every utility in Colorado is unique. We have different service territories, transmission capabilities and power plants that were built at different times.
This is why we’re committed to a smart transition at a pace that makes sense, without sacrificing our customers’ ability to pay their electric bill or meet electric demands on the hottest of days.
If you want to learn more about our Sustainable Energy Plan and our path for the future, I invite you to a virtual community check-in on Aug. 27. It’s a great opportunity to learn about the challenges and risks we are facing today to meet our energy future.