Xcel Energy proposes adding unprecedented renewable energy and storage to advance Colorado’s clean energy goals

Proposed Clean Energy Plan uses a steady, sustainable approach to hit emissions targets while protecting reliability

DENVER (September 19, 2023) – Xcel Energy—Colorado today announced a plan that will continue to transform the state’s energy mix, meeting customers’ energy needs while continuing to lead the clean energy transition and providing affordable, reliable service. The company’s Clean Energy Plan proposes to double the amount of renewable energy on the system and invests up to $15 billion across Colorado, while taking advantage of $10 billion in Inflation Reduction Act tax credit benefits to reduce costs and support customers, communities, and workers in the state.

“We are excited about the plan we’ve brought before to the Commission, as it delivers significantly more wind, solar, and storage to our system, along with sustainable biomass and strategically necessary amounts of natural gas resources,” said Robert Kenney, president of Xcel Energy—Colorado. “We listened to our stakeholders who want a smart, affordable, sustainable transition to cleaner energy while providing a just transition for impacted communities and employees. This plan relies on proven technologies, while using emerging technologies like battery storage to provide a balanced mix of resources that meet Colorado’s energy goals.”

“Increasing use of low-cost renewable energy sources and energy storage will save Coloradans money and move the state closer to achieving our clean energy goals. I applaud Xcel Energy for their commitment to reducing emissions, delivering better value for consumers, and protecting the future of our state,” said Governor Jared Polis.

The proposal is now before the Colorado Public Utilities Commission, which approved the first phase of the nation-leading Colorado Clean Energy Plan in 2022. The plan slashes carbon emissions more than 80% by 2030, adds 6,500 megawatts (MW) of renewable energy to the grid, ends the use of coal by 2030 and invests in communities across the state with a focus on those with retiring coal plants. Adding renewable energy to the grid saves customers money because wind and solar power generate electricity without fuel costs. From 2017 through 2021, wind farms on the Xcel Energy system in Colorado saved customers $700 million in avoided fuel costs and tax credits.

The Clean Energy Plan comes as the country prepares to mark National Clean Energy Week next week and is testament of the policies, industries and technologies that are leading the transition to deliver reliable, affordable energy for customers while reducing greenhouse gas emissions. The plan was developed from the more than 1,000 energy project proposals submitted and includes projects throughout the state. Xcel Energy is recommending approval of its plan because it is a balanced portfolio that protects affordability while enhancing grid reliability. The plan also includes additional investments in transmission infrastructure to enhance reliability in the Denver metro area and throughout the state.

“Western Resource Advocates is very encouraged to see that Xcel Energy’s preferred portfolio exceeds the requirement to reduce climate changing greenhouse gas pollution at least 80% by 2030. This plan further solidifies Xcel Energy’s reputation as a leader in the transition to clean electricity generation,” said Erin Overturf, Clean Energy Director at Western Resource Advocates. “Resource planning in Colorado is a robust, transparent process that allows all types of generation technologies to compete. As demonstrated by today’s filing, this process makes Colorado and Xcel Energy uniquely well-positioned to capture the financial benefits of the Inflation Reduction Act and move even faster in the transition to clean, affordable electricity. We look forward to reviewing the full filing.”

“I am pleased to see that Xcel Energy is working diligently in their plan to take advantage of the strong labor standards and workforce training agenda contained in the incentives included in the Inflation Reduction Act,” said Nate Gutierrez, Business Manager for IBEW Local 111. “IBEW Local 111 and Xcel Energy must work collaboratively to meet the workforce needs of our utilities to ensure the state meets its goals and that we serve our customers to promote safe and reliable service.”

Clean Energy Plan

Referred to as the “Preferred Plan” before the Commission, it represents the largest clean energy portfolio ever built in Colorado, with more wind and solar power, more energy storage, a new biomass facility and less natural gas. The plan includes 22 new energy projects, with Xcel Energy owning about two-thirds of the projects.

Benefits include:

• 6,500 megawatts (MW) of renewable resources, driving the system to more than 80% renewable energy,
  • 3,400 MW wind,
  • 1,970 MW solar,
  • 1,170 MW storage,
  • 19 MW biomass.
• Meets or exceeds the state’s emission reduction targets, which call for an 80% reduction in carbon emissions by 2030.
• Support for the workforce and communities in areas that are home to coal-fueled power plants.
• Creates economic benefits via landowner lease payments, job creation and local tax revenue.
• Ensures grid reliability even under extreme weather conditions.
• 630 MW of strategically located natural gas resources to support local and systemwide reliability.
• In combination with renewable and storage resource, replaces more than 1,300 MW of retiring or expiring natural gas contracts, resulting in a decrease of 740 MW of natural gas on the electric system.

The Preferred Plan keeps costs low for customers, with an average annual rate impact of 2.3%. This means that adjusted for inflation, the average residential customer’s monthly bill in 2030 will be about $10 more than today. 

Hayden, San Luis Valley, Fort Lupton

As part of its plan to reduce carbon emissions, the company is fully retiring the Hayden Generating Station and proposing a new biomass facility to support the local community and workforce as the coal units fully retire by the end of 2028. The facility will use forest waste from fire prevention activities and Rocky Mountain pine beetle-kill wood as a sustainable biofuel. The project will employ 26 full-time, long-term operations employees.

With the retirement of Xcel Energy’s existing Alamosa combustion turbine in 2025, Xcel Energy is proposing a new 28 MW combustion turbine to ensure reliable electric service in the San Luis Valley by backing up existing generation in the area.

A proposed combustion turbine in Fort Lupton will support the current system, developing new 24/7 generation to help during times of high energy use when customers need electricity the most.

Colorado’s Power Pathway

Colorado’s Power Pathway, a “transmission highway” currently under construction, provided developers new opportunities for proposed projects. The Preferred Plan includes projects that span the state, with a concentration of proposals located along the Pathways’ transmission corridor. These projects will bring new economic benefits to rural Colorado.

Low-cost wind bids in the southeast portion of Colorado, along the conditionally approved May Valley-Longhorn transmission line extension, justify the inclusion of this segment of the Power Pathway. This segment will connect to the proposed Longhorn substation.

The CPUC will now evaluate the Preferred Plan, as well as several alternative portfolios submitted in the 120-Day Report. It’s anticipated the CPUC select a portfolio late this year.

###

About Xcel Energy

Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on X, formerly known as Twitter, and Facebook.