dispatches from the front: the colorado clean air-clean jobs act
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Dispatches from the Front: The Colorado Clean Air-Clean Jobs Act. Platts 5 th Annual Rockies Gas and Oil Conference. Ron Binz Public Policy Consulting April 14, 2011. Summarized History for Bill Number HB10-1365 - PowerPoint PPT PresentationTRANSCRIPT
Dispatches from the Front: The Colorado Clean Air-Clean Jobs Act
Platts 5th Annual Rockies Gas and Oil Conference
Ron BinzPublic Policy Consulting
April 14, 2011
Summarized History for Bill Number HB10-1365
03/15/2010 Introduced In House - Assigned to Transportation & Energy + Appropriations
03/16/2010 House Committee on Transportation & Energy Refer Amended to Appropriations
03/19/2010 House Committee on Appropriations Refer Amended to House Committee of the Whole
03/19/2010 House Second Reading Special Order - Passed with Amendments
03/22/2010 House Third Reading Passed03/23/2010 Introduced In Senate - Assigned to Agriculture and Natural Resources + Appropriations
03/25/2010 Senate Committee on Agriculture and Natural Resources Refer Amended to Appropriations
03/26/2010 Senate Committee on Appropriations Refer Unamended to Senate Committee of the Whole
03/29/2010 Senate Second Reading Special Order - Laid Over Daily
03/30/2010 Senate Second Reading Passed with Amendments
03/31/2010 House Considered Senate Amendments - Result was to Concur - Repass
03/31/2010 Senate Third Reading Passed
04/08/2010 Signed by the President of the Senate
04/08/2010 Signed by the Speaker of the House
04/09/2010 Sent to the Governor
04/19/2010 Governor Action - Signed
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Structure of HB10-1365• Utility must consult with state air regulator (CDPHE) on a plan
to meet current and reasonably foreseeable EPA clean air rules.
• Utility files plan with PUC to improve air quality, addressing at least half of coal generation up to 900 MW.
• Utility required to conduct various studies:– Plan impacts on NOx emissions (must reduce by 70%-80%)– Cost of controlling emissions at existing coal plants– Cost of replacing 900 MW coal generation with natural gas– Impacts on system reliability
• CDPHE will participate in PUC process.• Any PUC-approved plan must meet projected EPA rules.• Air Quality Control Commission will incorporate approved plan
into State Implementation Plan (SIP) for addressing regional haze.
• New law specifies some details of regulatory cost recovery
HB10-1365 PUC Timeline for Xcel
April 19 Bill signed into lawApril 21 PUC opened docketMay 27 Prehearing conference
Ruling on Interventions (34 parties)August 15 Xcel filed preferred and alternate
plansNovember Hearings (~90 witness testimonies)December
15PUC Order
January 2011
CDPHE adopts SIP
April 2011 Legislature considers SIP
Peabody CMA ACCCE AGNC AnadarkoGas
Intervenors WRA10/21/2010 Thursday PSCO
Hyde 30 15 0 20 20
Magno 30 10 0 5 0
Mills 0 0 0
Boland 0 0 010/22/2010 Friday Hill 0 40 20
Prager 15 10 0 5 0
Ford 45 10 0 20 10
Brockett 15 0 30 10
Landrum 0 10 0 010/25/2010 Monday Carter 30 0 10 10 0
Green 0 10 20
Johnson 0 10 20
Peabody CMA ACCCE AGNC AnadarkoGas
Intervenors WRA CIEA SWG Thermo** GEO Interwest Boulder Denver Glustrom CSU-TriStateCF&I
Climax FEA Walmart AESCBlanca
TrincheraBCC-Weld CEC CIG-WIG COGA CoSEIA
CREA-Western Fuels DPS No. 1 Holy Cross IREA Larson OCC Staff CDPHE PSCo Total total by day
10/21/2010 Thursday PSCO
Hyde 30 15 0 20 20 20 40 10 20 0 20 10 20 45 10 10 40 330
Magno 30 10 0 5 0 0 5 0 20 70
Mills 0 0 0 5 0 5
Boland 0 0 0 0 0 40510/22/2010 Friday Hill 0 40 20 15 20 5 0 10 110
Prager 15 10 0 5 0 0 10 40
Ford 45 10 0 20 10 15 30 0 30 160
Brockett 15 0 30 10 0 30 10 35 10 140
Landrum 0 10 0 0 10 0 20 47010/25/2010 Monday Carter 30 0 10 10 0 5 0 10 65
Green 0 10 20 10 30 0 10 10 90
Johnson 0 10 20 10 30 5 0 75
Mogensen 0 10 20 10 30 0 70
Wobbekind 10 0 10 0 0 5 0 25
Sheesley 0 10 10 0 0 20 10 50 37510/26/2010 Tuesday Roberts 0 0 10 0 15 0 25
CDPHE
Torangeau 45 15 0 10 20 25 15 0 30 25 185
Miller 0 0 0 0 5 5
WRA
Middleton 15 0 10 0 5 30
FEA
Blank 0 0 5 0 10 15
CPUC Staff
Camp 30 0 0 10 15 10 5 0 10 30 110
Podein 0 20 10 10 0 10 20 70
Dominguez 0 0 15 15 10 0 5 45
Kunzie 0 20 0 0 10 30
Markell 0 5 0 0 15 20 53510/28/2010 Thursday Cutler 0 0 10 10 10 0 10 40
Kwan 10 0 5 15
PEABODY 0
Montgomery 0 30 5 5 0 20 60
Wendling 0 30 10 5 0 20 65
Smith 0 10 40 15 15 0 40 120
Cichanowicz 0 5 0 0 10 15
Coddington 10 5 20 5 0 15 20 75 39010/29/2010 Friday CMA
Bezdek 0 20 15 10 0 5 15 65
Hewson 0 20 20 10 0 15 65
ACCCE
Ross 0 0 0 5 0 5 15 25
AGNC
Monger 0 5 5 5 0 5 0 20 17510/30/2010 Saturday WRA
Nielsen 0 10 15 15 0 25 20 85
Palermo 0 0 10 20 0 20 50
Schlissel 0 10 0 0 25 20 55
Deck 0 0 0 5 5
Dirmeier 0 5 0 10 20 35
Keohane 15 0 0 0 5 20
Schaeffer 0 0 0 5 5
Tellinguisen 0 0 0 10 5 15 27011/1/2010 Monday CSU/TRISTATE
McLennan 0 10 5 0 5 15 35
GAS INTERVENORS
Van Nostrand 30 0 0 15 15 0 15 75
Cavicchi 30 0 0 15 0 30 75
Arunchalam 0 0 0 0 15 15
Malmedal 15 0 0 10 0 30 55
Fishman 30 0 10 0 10 0 15 65
Gilliss 0 0 0 0 0
Norsworthy 15 0 0 10 0 10 35 35511/2/2010 Tuesday ANADARKO
Moore 30 0 5 0 10 10 55
CIEA
Muller 0 0 5 0 15 20
Malmedal 0 0 15 0 30 45
SWG
Kushner 0 5 0 0 30 35
Rhodes 0 5 0 0 20 25
THERMO
Whittles 0 0 0 0 10 10
GEO
Futch 0 20 0 0 15 35
INTERWEST
Cox 0 0 0 0 5 5
Hunt 0 0 0 0 10 10
BOULDER
Koehn 0 5 0 0 0 10 15
Milmoe 0 0 0 0 0 0 0 25511/3/2010 Wednesday 1/2 day DENVER
Williams 0 0 5 0 0 5
GLUSTROM 0 0 0 5 5
OCC
Levis 0 5 10 10 5 0 0 30
Senger 0 5 20 10 10 5 0 15 65
CF&I/CLIMAX
Baron 0 5 0 0 10 15
WALMART
Chriss 0 0 0 0 10 10
AESC 0 0 0
BLANCA-TRINCHERA 0 0 0BOARD OF CNTY COMMISSIONERS WELD 0 0 0
CEC 0 0 0
CIG-WIG 0 0
COGA 0 0
COSEIA 0 0
CREA-Western Fuels 0 0
DPS No. 1 0 0
HOLY CROSS 0 0
IREA 0 0
LARSON 0 0 130
Total minutes 420 70 0 30 95 480 315 25 235 275 0 40 0 0 120 0 50 0 20 0 40 0 180 0 0 0 0 0 0 0 20 40 140 45 720 3360 3360
Highlights of the Proceeding• Utility plan addressed 1801 MW• Utility filed analysis of ~20 plans (7 basic plans with
variations)• Interventions by large gas and coal interests• Two very large public hearings• Prefiled testimony of 61 expert witnesses; 30 more rebuttal• Utility rejected “controls-only” plan• Utility’s preferred plan was ruled not in compliance with new
statute; utility filed new plans and identified new preferred plan
• CDPHE rejected some plans as insufficient to meet EPA rules• Long-term natural gas contract approved• Motions filed to disqualify two commissioners• Hearings in evenings and on Saturdays
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NOx (2018) -85%CO2 (2020) -24%
PSCo Electric 10M-245EScenario AnalysisPSCo Electric 10M-245E
Scenario Analysis 8
2011 2012 2013 2014 2015 2016 2017Existing Coal Plant
Cherokee 1 RetireCherokee 2 Retire SCCherokee 3 RetireCherokee 4 SCRArapahoe 3 Retire SCArapahoe 4 GasValmont 5 RetireHayden 1 SCRHayden 2 SCR
Pawnee SCR/LSDReplacement
2 X 1 Cherokee On-Line1 X 1 Cherokee
Peaker CherokeeIPP Re-ups
Retirement and Controls Replacement CapacityIn-Period Post-Period
MW MW2 X 1 Cherokee 569 N/A1 X 1 Cherokee N/A N/A
Peaker Cherokee N/A N/ATotal 569
IPP Re-upsMW Year
SWG Arapahoe 0 N/ASWG Valmont 0 N/AThermo UNC 0 N/A
Total 0
Scenario 5B
SC = Synchronous Condensor SCR = Selective Catalytic Reduction Control Gas = Fuel Switch from Coal to Gas LSD = Lime Spray Dryer
FuelPlant MW Retired Controls SC Switch
Cherokee 1 107 107Cherokee 2 106 106 YesCherokee 3 152 152Cherokee 4 352 352Arapahoe 3 45 N/A YesArapahoe 4 111 111Valmont 5 186 186Hayden 1 139 139Hayden 2 98 98
Pawnee 505 505In-Period Total 1,801 551 1,094 111
Post-Period Total N/A N/A N/A
9PSCo Electric 10M-245EScenario Analysis
Estimated Near Term Base Rate Effects STRATEGIST Revenue Requirements
0.0%2.5%5.0%7.5%10.0%12.5%15.0%17.5%20.0%22.5%25.0%27.5%30.0%
2011 2012 2013 2014 2015 2016 2017
STRATEGIST Rates Analysis ($0/ton carbon)
0.0%2.5%5.0%7.5%10.0%12.5%15.0%17.5%20.0%22.5%25.0%27.5%30.0%
2011 2012 2013 2014 2015 2016 2017
Carbon Carbon Carbon$0/ton $20/ton Effect
2010-2020 $M 28,547 31,266 2,719
2010-2030 PVRR $M 46,314 52,684 6,370
2010-2033 PVRR $M 50,735 58,046 7,311
2010-2046 PVRR $M 66,687 76,543 9,857
Capital Investments
Cost InPlant Action $ million Service
Cherokee 1Cherokee 2 SC 4 2012Cherokee 3Cherokee 4 SCR 174.9 2016Arapahoe 3 SC 4.9 2014Arapahoe 4Valmont 5Hayden 1 SCR 67.1 2015Hayden 2 SCR 80.7 2016
Pawnee/LSD SCR 236.5 20142 X 1 Cherokee 481.4 20151 X 1 Cherokee N/A N/A N/A
Peaker Cherokee N/A N/A N/ATransmission Upgrades 9.9
Total 1,059.4
Est
imat
ed P
erce
ntag
e In
crea
se in
Bas
e Ra
tes
Est
imat
ed P
erce
ntag
e In
crea
se in
Tota
l Rat
es
Scenario 5B
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NOx (2018) -89%CO2 (2020) -29%
PSCo Electric 10M-245EScenario Analysis
Retirement and Controls Replacement Capacity
IPP Re-ups
Scenario 6.2J2011 2012 2013 2014 2015 2016 2017
Existing Coal PlantCherokee 1 RetireCherokee 2 Retire SCCherokee 3 RetireCherokee 4 RetireArapahoe 3 Retire SCArapahoe 4 GasValmont 5 RetireHayden 1 SCRHayden 2 SCR
Pawnee SCR/LSDReplacement
2 X 1 Cherokee On-Line1 X 1 Cherokee On-Line
Peaker CherokeeIPP Re-ups
SC = Synchronous Condensor SCR = Selective Catalytic Reduction Control Gas = Fuel Switch from Coal to Gas LSD = Lime Spray Dryer
MW YearSWG Arapahoe 0 N/ASWG Valmont 0 N/AThermo UNC 0 N/A
Total 0
In-Period Post-PeriodMW MW
2 X 1 Cherokee 569 N/A1 X 1 Cherokee 314 N/A
Peaker Cherokee N/A N/ATotal 883
FuelPlant MW Retired Controls SC Switch
Cherokee 1 107 107Cherokee 2 106 106 YesCherokee 3 152 152Cherokee 4 352 352Arapahoe 3 45 N/A YesArapahoe 4 111 111Valmont 5 186 186Hayden 1 139 139Hayden 2 98 98
Pawnee 505 505In-Period Total 1,801 903 742 111
Post-Period Total N/A N/A N/A
11PSCo Electric 10M-245EScenario Analysis
Retirement and Controls Replacement Capacity
IPP Re-ups
Benchmark 1.0
SC = Synchronous Condensor SCR = Selective Catalytic Reduction Control Gas = Fuel Switch from Coal to Gas LSD = Lime Spray Dryer
FuelPlant MW Retired Controls SC Switch
Cherokee 1 107 107Cherokee 2 106 106Cherokee 3 152 152Cherokee 4 352 352Arapahoe 3 45 N/AArapahoe 4 111 N/AValmont 5 186 186Hayden 1 139 139Hayden 2 98 98
Pawnee/LSD 505 505In-Period Total 1,801 0 1,280
Post-Period Total N/A N/A
In-Period Post-PeriodMW MW
2 X 1 Cherokee N/A N/A1 X 1 Cherokee N/A N/A
Peaker Cherokee N/A N/ATotal 0
MW YearSWG Arapahoe 0 N/ASWG Valmont 0 N/AThermo UNC 0 N/A
Total 0
2011 2012 2013 2014 2015 2016 2017Existing Coal Plant
Cherokee 1 SNCRCherokee 2 SNCRCherokee 3 SCRCherokee 4 SCRArapahoe 3Arapahoe 4Valmont 5 SCRHayden 1 SCRHayden 2 SCR
Pawnee SCR/LSDReplacement
2 X 1 Cherokee1 X 1 Cherokee
Peaker CherokeeIPP Re-ups
NOx (2018) -75%CO2 (2020) -16%
Decisions on PSCo Plants
Unit Size Action Date
Cherokee 1 107 MW Retirement 2011
Cherokee 2 106 MW Retirement 2011
Cherokee 3 152 MW Retirement 2015
Cherokee 4 352 MW Conversion 2017
Arapahoe 3 45 MW Retirement 2013
Arapahoe 4 111 MW Conversion 2014
Valmont 5 186 MW Retirement 2017
Hayden 1 139 MW Controls 2015
Hayden 2 98 MW Controls 2016
Pawnee 505 MW Controls 2014
Source: Xcel Energy – Summary Report for Investors 2009
Colorado Coal Mining
Source: http://wvrhrc.hsc.wvu.edu/images/coal_mining_atlas_1994-2005_colorado.jpg
Long Term Natural Gas Contracts
Gas Prices: Market Forecast vs. Anadarko Long Term Contract
Forecast
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$/MMBtu
Thanks for the invitation.
I look forward to your questions.
Ron Binz, PrincipalPublic Policy Consulting
www.rbinz.com720-425-3335