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GUEST COLUMN: Skorman presents case for closing Drake sooner

Dec. 12, 2017
       Background: At the direction of the City Council/Utilities Board, Colorado Springs Utilities (CSU) is studying plans that could close (decommission) the coal-fired Drake Power Plant downtown sooner than 2035 - the date set by the previous council two years ago. To learn more about the current council/board's thinking on this, the Westside Pioneer contacted Richard Skorman, who was elected last April to a four-year term as councilmember for District 3 (which includes much of the Westside) and who has since been voted council president by the other members.
       The Pioneer asked these questions:
       - By what year do you think earlier decommissioning could reasonably happen?
       - With coal being the cheapest and most reliable energy source, how do rate payers come out ahead on a plan to replace a facility providing a quarter of the
Colorado Springs City Council President Richard Skorman.
Courtesy photo
community's electric power? Or are other factors involved in your thinking on this?

By Richard Skorman

       My hope is that we move the retirement date for Drake up to 2025 for the remaining Unit 7 and that we look at retiring Unit 6 by 2023 (as we won't need that power then), but leave it in place in case there is an emergency. Unit 5 is already retired.
       What needs to be replaced at Drake is 128 megawatts from our close-to-1000-megawatt portfolio. We could shut it down tomorrow, but we lack transmission lines to other sources for downtown and the Westside. That's what is going to cost the most in the replacement scenario.
       Drake would need major capital improvements after 2035, so that's why that "no longer date" was settled on by the last council. Rates would have to go up significantly about five years before that date anyhow, so the question is when do you want the rates to go up and what are the benefits of closing it sooner?
       The biggest benefit for ratepayers is that the sooner we build new transmission to our city-wide grid, the sooner we can take advantage of renewable energy from other utilities or renewable energy we build ourselves. What's not in the estimates right now is the fact that we will almost certainly form a regional transmission organization for the Rocky Mountain West. We are the only region in the country without such an organization. We are currently negotiating this. That will allow us to partner with Xcel, Black Hills, Tri-State and Platte River Utilities to both sell our excess power (to lower our rates) and to get power from the grid at affordable and dependable prices.
       The western grid is capacity-rich and demand-poor right now - and for the foreseeable future - because of Amendment 37, our state's renewable energy standards. Under those standards, all of the investor-owned utilities have had to invest in significant renewable energy generation, so they are always looking for new customers. Some have even built close by. The problem we have is integrating that new power into our system.
       And yes, we do need backup, on-demand, gas generation for when the wind stops blowing or sun doesn't shine. At least until battery storage becomes economical.
       If we build our own renewable energy, there is a short-term, one-time cost up front for construction, but the fuel savings costs are much better for ratepayers in the long run. You don't have to pay for sun and wind. That's quite a bit cheaper than even the Powder River Basin coal we use now for Drake. And we all know that coal prices will increase and, depending on the administration in D.C., there may be a CO2 cap that would make coal even more expensive. So the question isn't raising rates, it's when. To put it off now for short-term gain will make prices significantly higher in the long run.
       The other cost savings to ratepayers will come with new urban development in the southwest part of downtown around Drake and the Olympic Museum. There is still a possibility of the construction of an Olympic stadium and indoor exhibition facility that could be funded with the state CFC [City for Champions] dollars and private investors, if Drake is retired sooner. Having Drake there until 2035 is a show-stopper.
       More urban development downtown means more customers for CSU and better pricing for ratepayers as a whole. Development in that area will most likely be smart-grid development, allowing us to take advantage of technology that will significantly save ratepayers (another book to write) It will also be great to remove the one big freight customer for trains from downtown so that rail and switching yards could be moved to the east and we can use those lines for Front Range passenger rail. Waiting until 2035 will likely mean waiting for passenger rail for decades.

(Opinion: Guest Columns)

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