Tuesday, December 19, 2017

Drake deadline doesn't move, but Utilities board takes steps toward early closure

Posted By on Tue, Dec 19, 2017 at 10:54 AM

click to enlarge FILE PHOTO
  • file photo
On Monday, the Colorado Springs Utilities Board, whom you may recognize as City Council, made a move on the Martin Drake Power Plant that's sure to bring mixed reactions. They didn't move the plant's current closure date — no later than 2035 — any earlier, but they did direct Utilities staff to continue, and in some cases hasten, the groundwork for early closure possible.

Pick up a copy of the Indy tomorrow for a more complete look at the history, context and impact of the Drake debate, but for now, here's the short version.

The board set the 2035 date in 2015, the same year new technology, costing $178 million dollars, began removing sulfur dioxide from the plant's emissions. Utilities says those scrubbers work really well, but environmentalists and other concerned citizens believe the byproducts of coal burning, including emissions and waste, are harmful to public health.

Then, in April 2017, municipal elections brought in new city councilors/board directors, including Richard Skorman of District 3 and Yolanda Avila of District 4, who are interested in an earlier retirement. As soon as possible is their preference. (David Geislinger, of District 2, is also interested but less avid about that earlier date.)

In addition to shifting electoral sands, the pace of downtown development — particularly the urban renewal in the southwest — puts pressure on the board to clear the way for redevelopment of the Drake site, which sits at the desirable confluence of Interstate 25, Highway 24 and Fountain Creek.

In May, Utilities staff presented the board with potential timelines for decommissioning Drake and scenarios for how to replace its generation. Both 2030 and 2025 emerged as candidates for the deadline, though anytime between 2025 and 2035 is feasible. As for life after Drake, the possibilities boiled down to: Power from inside the city; power from outside the city; or some combination of the two.

Debate about what to do brought immense public participation. (Yes, 200 town hall attendees and about 300 emails counts as immense in Colorado Springs.) Various perspectives were aired, but to summarize: Those who want Drake closed cited health, environment, downtown aesthetics, economic development and image/reputation, while those who want Drake open cited low rates, minimal pollution and consistency.

"We are a split city," Geislinger commented at Monday's marathon meeting.

Utilities staff recommended the board go a route that includes distributed generation (small, high-efficiency natural gas generators and/or on-site solar panels throughout the city) and imported electricity from a regional transmission group (RTO), which is a multi-state power grid that provides transmission to member utilities. That means no new generation at Drake and the closing of Birdsall Power Plant, an inefficient gas-fired plant off North Nevada Avenue that's only used during peak demand. Staff didn't recommend a date, saying anytime 2025 or later is doable.

The board didn't need much convincing to take that route.

"We can always adjust with [this scenario]," director Don Knight noted. "It keeps all the options open."

There was no motion to set a deadline, as all the directors were more or less on the same page that they needed more information before making a final decision. Although some directors, like Knight, Andy Pico and Merv Bennett, would be content sticking with 2035, they're open to expediting if it makes good fiscal sense. Others, like Skorman, Avila and Geislinger, want their colleagues to look at costs other than just fuel, capital and operations.

"We should be careful not to be too pennywise and pound foolish on this," Skorman advised.

Variables the board would like to better understand:
• What exactly would be available through the RTO;
• how will technology and market demand change the math on renewables;
• how polluted is the Drake site;
• what's the value of the land Drake sits on;
• what's the potential for economic development;
• and how could the 2020 election affect emissions regulations and energy subsidies?

To move the ball down the court, the board directed staff to accelerate the construction of a transmission line needed to keep downtown lights on when Drake turns off. With the help of a hired consultant, that should be done in 2023. It's estimated to cost $26 million, with an estimated .25 percent incremental rate impact spread over three years.

The board also gave a tentative thumbs up on the RTO, directing Utilities leadership to keep talking with the Mountain West Transmission Group about potentially joining in 2019. That membership isn't final, though.

Next, the board told staff to move ahead on an environmental assessment and appraisal to find the land's salvage value.

Lastly, the board directed staff to hasten the next Electric Integrated Resource Plan (EIRP) — a study of Utilities' future needs done every five years, as mandated by federal law. The EIRP is due in February 2022, but Utilities will aim to have it done by the end of 2020.

Approval of those motions was unanimous, though director Bill Murray was absent.

The board was also unanimous in their concern for rising rates. The exact cost of decommissioning Drake isn't known yet, but given coal is the cheapest fuel commodity out there and replacement generation is sure to necessitate some new infrastructure, it's going to hit ratepayers in the pocketbook. So, the board discussed increasing investment in demand side management — programs designed to shave demand for electricity — and instituting a tiered pricing scheme like Utilities already does for water, meaning some users would pay higher rates.

Pico noted a committee is already studying tiered pricing for electric. "I think it has some merit," he said.

Though the board took some appreciable steps toward decommissioning the downtown coal plant, many attendees left disappointed there was no new deadline.

"In 18 years [in 2035], I'll be almost 40," said Colorado College student, Rebecca Glaser. Originally from the Bay Area, she's grown to love Colorado Springs and wants to stay after graduation. "But I don't want to raise my future children in the shadow of that plant. ... Many [graduating students] like me will leave. We want to live in a city that looks to the future and strives to innovate."

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