Colorado Energy Plan analysis shows switching from coal to renewable energy will boost jobs and local tax revenue

By Joe Smyth | [email protected] | @joesmyth

Two reports this month provide new details about Xcel Energy’s Colorado Energy Plan, including a glimpse at even lower bid prices for new renewable energy projects in the state, and an analysis of the impacts of the plan to jobs and tax revenue in Colorado and Pueblo County.

Xcel Energy's proposal would close two of the three units at the Comanche coal plant in Pueblo, Colorado, and replace that power with a mix of new resources including 1100 megawatts of wind energy, 700 megawatts of solar energy, 275 megawatts of energy storage projects, and the purchase of 380 megawatts of existing natural gas capacity. The Colorado Public Utilities Commission (PUC) is considering the proposal, and several labor, environmental, business, and community groups in Colorado are engaged in that process.

In January, we saw the bid prices for new renewable energy projects that Xcel Energy received, which showed that new wind and solar power in Colorado is now cheaper than existing coal plants. Those renewable energy project bid prices were so low, they attracted interest from a wide array of energy industry analysts and publications. But that earlier report only showed median prices of the bids that Xcel had received: $18/MWh for new wind energy, $30/MWh for new solar projects, and $36/MWh for solar with battery storage projects.

This month, Xcel Energy filed a more in-depth report with the Colorado PUC, which provides additional details about the renewable energy project bids it received. And while the new report doesn't include pricing details for specific projects, it does show the price range of bids that came in below those median prices:

The Preferred CEPP includes unprecedented low pricing across a range of generation technologies including wind at levelized pricing between $11-18/MWh, solar between $23-$27/MWh, solar with storage between $30-$32/MWh and gas between $1.50 - $2.50/kW-mo.

The lower end of those ranges rival some of the record-breaking low solar energy prices we've seen in recent months around the sunny Southwest.

In addition to cheap solar power, Xcel Energy aims to take advantage of eastern Colorado's wind energy resources. As the map below shows, the new report also provides some details about the locations of the new renewable energy projects that Xcel Energy hopes to pursue.

In particular, Xcel Energy plans to add a new 169 megawatt wind energy project in Weld County, repower an existing 162 megawatt project in Baca County, and add 800 megawatts of new wind energy in Kit Carson and Cheyenne Counties. That largest wind energy project would amount to a $1.1 billion investment in those two eastern Colorado counties.

Xcel Energy also plans to add a 72 megawatt solar project in Park County, a 100 megawatt solar with storage project in Adams County, and 525 megawatts of solar with storage projects in Pueblo County. The location of that project is aimed in part at mitigating the impacts of reduced tax revenue in the Pueblo area from closing the two units at the Comanche coal plant.

Colorado Energy Plan would result in net economic benefits
That brings us to the other new report, which focuses on the economic impacts of the Colorado Energy Plan. The analysis was prepared by the Leeds School of Business at the University of Colorado Boulder, and was filed this week with the Colorado PUC.

Overall, the analysis found that the Colorado Energy Plan would result in net economic benefits in Colorado, including a net increase of 549 jobs, of which 133 would be in Pueblo County. 

​Pueblo County would also see a net increase in property taxes, and so would Colorado as a whole.

Pueblo's Energy Future plans to host a community discussion about the economic impact report in the next few weeks.

Beyond Pueblo, other regions of ​Colorado can expect a more straightforward economic benefit, according to the study: "Other Colorado counties—in mountain communities, the Front Range, and the Eastern Plains—benefit from the installation of additional wind and solar resources, transmission lines, and other facilities."

While the economic impacts of these major new renewable energy projects could be significant for some nearby communities, the analysis also notes that the job and tax revenue increases "are a relatively small percentage of the overall Colorado economy."

The study also highlights the main way that the Colorado Energy Plan will help lower costs - by avoiding nearly $1 billion in coal purchases over the next 23 years, all from coal mines in the Powder River Basin of Wyoming. It's also worth noting that natural gas purchases are expected to decrease slightly.

Finally, Xcel Energy also published a map of all the bids that it received in response to its request for proposals. The utility received an unprecedented number of bids, and only plans to pursue a few of them - the projects shown in the map above. But the map below shows the geographic distribution of proposed projects, highlighting Colorado's optimal wind energy resources in the eastern plains, and more widespread potential for new solar projects. Other utilities in Colorado are also planning to add new renewable energy, attracted by these low prices, along with growing demands for clean power from major customers like towns and cities as well as major companies in the skiing, brewing, and technology industries.