Xcel Energy 2010 Annual Report Download - page 29

19
Gas-fired Resources
In October 2010, the CPUC approved the acquisition of approximately 900 MW of gas-fired generation from subsidiaries of
Calpine Corporation and the cost recovery settlement. In its approval, the CPUC required PSCo to file a rate case by April 30,
2012 to move the investment into rate base. The revenue requirements associated with the asset acquisition will continue to be
recovered through the PCCA until final rates are implemented. The PCCA went into effect on Jan. 1, 2011. Fuel costs will
continue to flow through the ECA. The acquisition closed on Dec. 6, 2010, and the related PPAs for the Blue Spruce Energy
Center and Rocky Mountain Energy Center were terminated effective that date. See Note 19 to the consolidated financial
statements for further discussion.
Solar and Wind Resources
In 2010, PSCo filed an amendment to the approved resource plan to reduce the amount of solar resources (combination of PV
solar and new technology renewable energy resources) to 60 MW and to seek new bids for 200 MW of wind power due to the
combination of a transmission line delay and changed market circumstances. The matter has been referred to an ALJ with
direction to resolve the matter by May 2011.
RES — In March 2010, Colorado enacted a law that increases the RES and now mandates that at least 30 percent of energy sales
be supplied by renewable energy for PSCo and removes the solar standard and replaces it with a distributed generation standard.
Within the distributed generation standard, at least one-half of the distributed generation must be retail distributed generation, i.e.,
generation that is on customer premises behind the customer meter. The law requires that PSCo generate or cause to be generated
electricity from renewable resources equaling:
● At least 12 percent of its retail sales for the years 2011 through 2014;
● At least 20 percent of its retail sales for the years 2015 through 2019; and
● At least 30 percent of its retail sales for the years 2020 and thereafter.
In addition, distributed generation must equal:
● At least 1 percent of retail sales in the years 2011 and 2012 and 1.25 percent of retail sales in the years 2013 and 2014;
● At least 1.75 percent of retail sales in the years 2015 and 2016 and 2 percent of retail sales in the years 2017, 2018 and
2019; and
● At least 3 percent of retail sales in the years 2020 and thereafter.
The CPUC has discretion to review the reasonableness of the increase in the distributed generation percentage in 2014. PSCo
believes that its forecasted plan acquisitions of renewable resources only need minor modification to comply with the new
standard.
CACJA — The CACJA was signed into law in April 2010. The CACJA required PSCo to file a comprehensive plan to reduce
annual emissions of NOx by at least 70 to 80 percent or greater from 2008 levels by 2017 from the coal-fired generation identified
in the plan. The plan was required to consider both current and reasonably foreseeable CAA requirements and allows PSCo to
propose emission controls, plant refueling, or plant retirement of at least 900 MW of coal-fired generating units in Colorado by
Dec. 31, 2017. The legislation further encourages PSCo to submit long-term gas contracts to the CPUC for approval. The CACJA
permits the CPUC to consider interim rate increases after Jan. 1, 2012, while the rate filing is pending and allows for multi-year
rate plans.
In December 2010, the CPUC approved the following:
● Shutdown Cherokee Units 1 and 2 in 2011 and Cherokee Unit 3 (365 MW in total) by the end of 2015, after a new
natural gas combined-cycle unit is built at Cherokee Station (569 MW);
● Fuel-switch Cherokee Unit 4 (352 MW) to natural gas by 2017;
● Shutdown Arapahoe Unit 3 (45 MW) and fuel-switch Unit 4 (352 MW) in 2013 to natural gas;
● Shutdown Valmont Unit 5 (186 MW) in 2017;
● Install SCR for controlling NOx and a scrubber for controlling SO2 on Pawnee Station in 2014;
● Install SCR on Hayden Unit 1 in 2015 and Hayden Unit 2 in 2016; and
● Convert Cherokee Unit 2 and Arapahoe Unit 3 to synchronous condensers to support the transmission system.