Xcel’s Coal Pricing Projections Off By a Quarter Century

Coal costs at Xcel’s newest and largest Colorado coal plant, Comanche 3, are currently increasing by more than 10%/year; however, Xcel Energy is modeling their coal costs as going up by less than 2% per year when making their consumer rate projections.

2011 coal costs for Comanche 3 were in the neighborhood of $1.50/MMBTU, but Xcel predicted they would not be paying this price ($1.50/MMBTU) for coal until the 2030′s (see the LWG 1-4 attachment below).  Xcel’s price modeling was off by a quarter century.

Coal prices for the Comanche 3 plant have been rising steadily:  Comanche coal was  approximately $1.05/MMBTU in 2007 and only $0.70 in 2004 when the coal plant was being planned. (See LWG 3-7 attachment below)

The Comanche 3 plant is scheduled to operate until 2069. Comanche 1 and 2 are scheduled to operate until 2033 and 2035, respectively.  The scenario begs the question:  How high will coal prices get by 2020; let alone 2o69 ? 

As the prices for fossil fuels continue to rise, the economic case for renewable energy and efficiency alternatives is becoming increasingly clear.

07A-447E LWG Ans Attach 31 Disc Resp LWG 1-4 Fuel Prices-Best
07A-447E LWG Ans Attach 42 Disc Resp LWG 3-7 Part 2 Coal Costs
Comanche Coal Costs 2011 Prelim 2011-07(1)