(1) (a) The general assembly finds that, in designing a coordinated emission reduction plan as described in section 40-3.2-204 and to expeditiously accelerate coal plant retirements, it is in the public interest for utilities to give primary consideration to replacing or repowering their coal generation with natural gas generation and that utilities shall also consider other low-emitting resources, including energy efficiency, if this replacement or repowering can be accomplished prudently and for reasonable rate impacts compared with placing additional emission controls on coal-fired generating units, and if electric system reliability can be preserved. To that end, in the plan required under section 40-3.2-204, each utility shall include an evaluation of the following proposals:
The cost and system reliability impacts of retiring a minimum of nine hundred megawatts of coal-fired electric generating capacity, or fifty percent of the utility's coal-fired generating units in Colorado, whichever is less, by January 1, 2015, and repowering the affected coal-fired facilities with natural gas or replacing them with natural gas-fired generation or other low-emitting resources, including energy efficiency. The coal-fired capacity evaluated under this subparagraph (I) shall not include any coal-fired capacity that the utility has already announced that it plans to retire prior to January 1, 2015. The utility may also prepare evaluations of additional scenarios, including scenarios that result in the retirement of less than nine hundred megawatts of coal-fired electric generating capacity or the retirement of some portion of the nine hundred megawatts of capacity after January 1, 2015, but before January 1, 2018.
Retirements of a portion of its coal-fired generating capacity in the period after April19, 2010, but prior to January 1, 2015. At a minimum, the utility shall evaluate whether to retire a portion of its coal-fired capacity on or before January 1, 2013, or whether the retirements of coal-fired generating facilities that have already been announced could be advanced to an earlier retirement date.
(b) (I) For all evaluations required by this subsection (1), the utility shall report:
The estimated overall impacts on the utility's emissions of oxides of nitrogen andother pollutants;
The feasibility of the retirement, repowering, or replacement on the schedule proposed in the evaluation;
The costs and impact on electric rates from these proposals; and
The impact of the retirements on the reliability of the utility's electric service.
(II) All evaluations required by this subsection (1) shall contrast the costs of replacing coal generation with natural gas generation and other low-emitting resources, including energy efficiency, with the costs of installing additional emission controls on the coal plants.
The utility shall set forth in its plan the utility's proposal for the best way of timelymeeting the emission reduction requirements required by federal and state law, given the need to preserve electric system reliability, to avoid unreasonable rate increases, and the economic and environmental benefits of coordinated emission reductions.
In reviewing the reasonableness of the utility's proposed plan, the commission shall:
Compare the relative costs of repowering or replacing coal facilities with natural gasgeneration or other low-emitting resources, including energy efficiency, to an alternative that incorporates emission controls on the existing coal-fired units;
Use reasonable projections of future coal and natural gas costs;
Incorporate a reasonable estimate for the cost of reasonably foreseeable emissionregulation consistent with the commission's existing practice;
Consider the degree to which the plan will increase utilization of existing natural gasfired generating resources available to the utility, together with increased utilization of other low-emitting resources including energy efficiency; and
Consider the economic and environmental benefits of a coordinated emissions reduction strategy.
(4) The utility may enter into long-term gas supply agreements to implement the requirements of this part 2. A long-term gas supply agreement is an agreement with a term of not less than three years or more than twenty years. All long-term gas supply agreements may be filed with the commission for review and approval. The commission shall determine whether the utility acted prudently by entering into the specific agreement, whether the proposed agreement appears to be beneficial to consumers, and whether the agreement is in the public interest. If an agreement is approved, the utility is entitled to recover through rates the costs it incurs under the approved agreement, and any approved amendments to the agreement, notwithstanding any change in the market price of natural gas during the term of the agreement. The commission shall not reverse its approval of the long-term gas agreement even if the agreement price is higher than a future market price of natural gas.
Source: L. 2010: Entire part added, (HB 10-1365), ch. 140, p. 470, § 1, effective April 19.