Xcel seeks nearly $180 million rate hike to cover coal-fired Comanche 3

Xcel Energy’s rate-case hearing before the Colorado Public Utilities Commission runs through the end of the week, with some wags saying the state’s largest utility intentionally asks for too much ($177.4 million) so the PUC can lop off $30 million or $40 million and rubberstamp the rate hike.

coal fired power

Xcel just got a $112 million increase in July, a settlement of its 2008 rate case in which the utility originally sought $159.3 million. Negotiations with PUC and staff and parties such at the Office of Consumer Counsel resulted in a $47 million reduction, but the average residential bill still went up $2.94 a month.

According to the Denver Post, the latest increase, scheduled to go into effect at the beginning of next year if it’s approved, would jack up rates another $4.92 a month, or about a 7.6 percent increase.

The biggest ticket item Xcel’s hoping to recoup costs on in its latest rate case? The utility wants another $110 million to offset its investment in the new Comanche 3 coal-fired power plant near Pueblo – scheduled to go online later this year.

Part of the last rate increase went toward Comanche 3 – the state-of-the-art third phase of the power plant, which is already being challenged in court by environmental groups for its mercury emissions plan. And rural electric co-ops such as the Intermountain Rural Electric Association (IREA), which is the state’s largest, and Holy Cross Energy have chipped in on Comanche 3 to the tune of $366 million and $100 million respectively.

But environmentalists and renewable energy advocates say the cost of coal will undoubtedly skyrocket in coming years because of looming shortages and the likelihood of climate-change legislation that would hit coal the hardest since it emits the most carbon dioxide. The Denver Post cites Leslie Glustrom, a private citizen challenging the latest rate case.

Glustrom is a former biochemist with Boulder-based Clean Energy Action who says supplies of coal in Wyoming’s Powder River Basin will likely start to run out in the next 20 years, making coal-fired power plants a poor long-term gamble.

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