In study, no Drake choice stands out yet 

Smoke stacked

Pay now or pay later. That's essentially the preliminary finding of a $500,000 study investigating the possibility of shuttering Colorado Springs' downtown, coal-fired Martin Drake Power Plant. The study was launched last year, after Mayor Steve Bach talked about wanting that space for economic development, and the Sierra Club raised a fuss over emissions pollution.

Done by HDR, Inc. of Omaha, Neb., the study looked at 12 scenarios of varying lifespans for Drake. But it found that Colorado Springs Utilities' electric rates will escalate in the next 30 years regardless of which option is chosen. And each scenario carries an upside and downside.

For example, if the Utilities Board, comprised of City Council, decides to retire Drake within three years — the shortest timeframe studied — the city would face costs of buying electricity from other producers and building a new generation facility to replace Drake's 254-megawatt capacity, nearly one-third of the city's supply.

That option would wind up costing the city $224 million more than the "base case," which is similar to the outlook assumed in the city's 2012 Electric Integrated Resource Plan, with which all options are compared. The base case — retiring Drake in 20 years and adding pollution control equipment as required — would cost $5.209 billion through 2050. That cost figure is for power production costs for CSU's entire generating portfolio, but not distribution or other electric utility related costs, in today's dollars.

Councilor Val Snider, who with Councilor Andy Pico heads the Drake Task Force overseeing the study, calls the early shutdown option "risky," because it would subject the city to "fluctuations of the marketplace" in buying fuel. Pico agrees, saying, "Most of the time, we would be buying power when power is most expensive and least available" — namely, during peak periods. "Right now, we sell [excess] power."

The "cheapest" option — the only one that carries a price tag lower than the base case, by $216 million — would be to keep Drake cranking for 30 years, the study found. It would allow Utilities more time before having to secure more renewables, purchase additional power, reduce usage using "demand-side management" techniques (such as time-of-day billing), and/or build a new natural-gas-powered plant, choices outlined by chief power officer Bruce McCormick.

So the real question will be whether the Utilities Board wants to scrap Drake early and see rates soar in the next three to five years, or hang on to Drake and see rates soar decades from now.

Two big unknowns: How much impact would the removal of Drake have on economic development in the lower downtown area — the vicinity Bach and others are eying for City for Champions tourist attractions and spinoff businesses? And what's the true cost of cleaning up the site?

Preliminary study findings show only a $5 million difference between no site remediation and a thorough cleanup if Drake is shut down in 15 years. But Snider adds that costs might vary widely depending on whether the site becomes a park or an events center.

Pico says he favors keeping Drake online as long as possible, while Snider says he has no preference. A final version of the study is due in December, and the nine-member board will begin hashing out the study's findings next year. A public meeting to outline the preliminary results is scheduled for 6 to 8 p.m., Tuesday, Dec. 3, at the City Administration Building, 30 S. Nevada Ave.



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