Tuesday, November 13, 2012

UPDATE: Sierra Club cites study in bid to close Drake

Posted By on Tue, Nov 13, 2012 at 12:44 PM

Here's the response to our question from Sierra Club: "This is the only press release that we issued in Colorado."

The Sierra Club once again is trying to persuade the community to abandon the city-owned, coal-burning Martin Drake Power Plant, citing a study by the Union of Concerned Scientists.

The study, found here, also mentions two other power plants in Colorado.

Drake Power Plant
  • Bach: Embracing Sierra Club.

We've asked the Sierra Club for the press releases they sent out on those two, one owned by Xcel Energy and the other by Tri-State Generation & Transmission Association, Inc., but haven't heard back. We'll add to this post if and when we hear something.

Sierra Club has teamed up with Mayor Steve Bach to push for Drake's removal. Whoever said Bach isn't liberal?

Bach's interest, though, is more economic than environmental, one might argue, because he wants the downtown plant to be replaced with a sports stadium or some other public venue. Fact is, developer Chris Jenkins, whose family almost single-handedly financed the $1 million campaign to start a strong-mayor form of government 2010, owns a bunch of property in Drake's vicinity. Bets on who's in line to benefit from a sports stadium?

City Council, which comprises the Utilities Board (on which Bach does not serve), has ordered a study of retiring Drake and selling the electric utility, both of which are due in mid-2013. One of the chief factors at play is whether Neumann Systems Group will get to attach its pollution control equipment on Drake. Council has approved it, but the minority on Council who oppose it insist the question be kept alive.

Here's the Sierra Club's release, followed by what Colorado Springs Utilities had to say about it:

COLORADO SPRINGS - According to a new independent study released today by the Union of Concerned Scientists, the Martin Drake coal-fired power plant - located in Colorado Springs, Colorado - is one of the nation’s coal-fired power plants that may no longer be an economically viable option for electric generation, and should be considered for retirement. The report, Ripe for Retirement: The Case of Closing America’s Costliest Coal Plants, examined whether coal-fired power plants after being upgraded with modern pollution controls would be able to compete with cleaner and more affordable sources of energy like wind. The report cites at least two out of three boilers at the Martin Drake plant as prime candidates for retirement.

“Today’s report offers even more evidence of the economic drag the Martin Drake coal-fired power plant has on Colorado Springs and raises again the question of why Utilities is sinking more money into the plant,” said Bryce Carter, Organizer with the Sierra Club. “With this independent analysis, it is clear that the Martin Drake coal-fired power plant does not make economic sense for our community. Investing millions of ratepayer dollars in an aging coal plant is unwise.”

The Colorado Springs Utilities Board has taken steps forward regarding a decommissioning study on Martin Drake. The prudent path is a transition away from coal by creating local jobs through energy efficiency and increased use of cleaner energy like wind power, which already provides abundant, reliable and cheap power elsewhere in Colorado. While Colorado Springs Utilities is spending millions on an experimental technology that is unlikely to meet future pollution control requirements for the Martin Drake plant, utilities around the country are realizing the higher future costs of coal and investing their dollar elsewhere.

“Evidence continues to mount that Martin Drake is too expensive to keep,” said Carter. “Our neighbors in surrounding states are heeding the warning and ramping up investments in solar and wind power. Colorado Springs ratepayers should ask why their utility is betting against the national trend and sinking tens of millions of dollars into an aging coal plant. The community deserves an investment in clean, reliable energy that benefits our health and our wallets.”

Here's Springs Utilities' response:

Colorado Springs Utilities' goal is to provide the lowest cost, most reliable utility service while meeting all environmental regulations. The future cost to generate electricity using coal versus natural gas was thoroughly studied in the 2012 Electric Integrated Resource Plan. The cost of natural gas generation is forecast to be nearly three times higher than coal (based on the medium forecast for both) in 2030. Even with the cost of current and expected forecasted emissions control requirements for coal included, electric generation from coal is expected to be less expensive than from natural gas.

Other utilities in Colorado also see the value in retaining coal as part of their energy mix. For example, Xcel expects their fuel mix to be 47% coal, 29% natural gas, and 24% renewable after their "Clean Air-Clean Jobs" initiative is complete in 2018.

Colorado Springs Utilities' fuel capacity mix by comparison is 43% coal, 54% natural gas, and 3% hydro. Springs Utilities continues to pursue our Energy Vision which contains a goal of 20% renewables by 2020.

Below are the figures on gas and coal prices provided by Utilities:

Natural gas prices were obtained from three independent sources and averaged to develop the forecast. Two sources of futures data were used, one from BP and one from Goldman Sachs. The third source was the natural gas price forecast from PIRA Energy Group, an international energy consulting firm specializing in global energy market analysis and intelligence.

Natural Gas Price Forecast with High and Low Range:


Coal prices were developed by the Colorado Springs Utilities’ Fuels and Material Management section and include the cost of coal at the mine as well as rail delivery charges.

Coal Price Forecast with High and Low Range:


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