Xcel Energy wants to replace the state's largest power plant with a series of new energy projects designed to reduce its climate-changing emissions and generate enough electricity to meet the growing needs of data centers, electric vehicles and buildings.

The proposal, filed Oct. 15 with state regulators, is part of the utility's “just transition plan,” which outlines ways to replace both the electricity and economic activity generated by the Comanche 3 coal-fired power plant in Pueblo – one of the largest sources of electricity in the state – producing greenhouse gases.

“We are committed to helping our employees and the communities where these power plants are located as we continue to responsibly transition away from coal,” Xcel Energy President Robert Kenney wrote in a statement.

The comprehensive plan from Colorado's largest utility outlines five broad possible scenarios that include adding a mix of renewables, fossil fuels and “advanced technology” energy projects such as geothermal and nuclear.

Xcel Energy's original proposal does not specify the exact location and details of each project. More information will be provided through a months-long hearing process in which Colorado's Public Utilities Commission will review feedback from the public and other groups before voting on a final proposal.

Xcel Energy has not detailed the cost of the proposal, but the plan could increase the average customer's bill by nearly 2.5 percent in the first five years. According to an Xcel Energy spokesperson, the final price will be determined after clean energy developers bid on the projects in the second phase of the proposal.

New energy projects Xcel Energy is considering include:

• A mix of new wind, solar, long-term energy storage and natural gas systems is to be built by 2031
• Eliminate new gas power plants and invest in huge battery storage projects for wind and solar energy
• Commissioning of new geothermal energy projects in 2031 and commissioning of a new nuclear reactor in 2037

The natural gas facilities outlined in Xcel Energy's proposal would be designed to capture and store greenhouse gas emissions before they enter the atmosphere, according to the filing.

According to Xcel Energy, the gas-fired power plants may be necessary because building huge battery storage plants is difficult. But some environmental groups are skeptical.

“A new gas plant would be bad for Pueblo, bad for every single Xcel Energy customer, bad for our climate and bad for our air quality,” Eric Frankowski, executive director of the Western Clean Energy Campaign, wrote in a statement.

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The proposal comes just nine months after regulators signed off on a separate $13 billion Clean Energy Plan for clean energy projects to meet federally mandated climate goals and generate electricity by 2028.

The new plan is a blueprint for cleaner energy through 2031, when the company expects electricity demand to increase dramatically with new data centers, the introduction of electric vehicles and more buildings using electricity for heating and cooling.

In its filing, Xcel Energy says its plan would also encourage developers to build renewable projects in Routt, Pueblo and Morgan counties, which are expected to lose millions of dollars in tax revenue once their coal-fired power plants close.

Transitions in particular are simply not easy

A “just transition” describes the process of moving away from fossil fuels without weakening an economy, for example through significant job cuts. But closing a facility as large as Comanche 3, which is scheduled to cease operations by 2030, is not easy.

Comanche 3 opened in 2010 and is part of Comanche Station, a sprawling facility that once housed three coal-fired power plants in Pueblo. While no portion of the station's power remains in Pueblo and is instead sent to Denver and the Front Range, Xcel pays the county $25 million in taxes each year to fund services such as road repairs and schools.

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Comanche 3 was at one point the largest single source of carbon dioxide pollution in the state. Federal data shows the three Comanche factories released at least two million tons of toxic pollutants into Pueblo's air in 2019.

That same year, state lawmakers passed a law requiring utilities to phase out electricity generation from fossil fuels. To achieve these goals, the law requires utilities to submit detailed clean energy plans to regulators.

As part of its plan, Xcel agreed to pay millions of dollars to Pueblo, Morgan and Routt counties, either as direct payments or as indirect investments, such as building a non-fossil fuel energy project.

In December 2023, Xcel released a study on Comanche 3 replacement, tentatively ruling out options such as a small nuclear reactor or gas turbines due to their cost and the time it would take to bring it into service.

But an advisory committee appointed by Xcel and made up of Pueblo residents came to a very different conclusion. In its 2024 report, the committee wrote that “only advanced nuclear energy production will make Pueblo whole and also pave the path to prosperity.”

Pueblo debates nuclear power

Pueblo County commissioners held three town hall discussions in 2024 about the possibility of building a nuclear power plant to replace Comanche 3 power generation. In February, Corinne Koehler, co-chair of the advisory committee, told attendees gathered for the first town hall how the community is The further steps after the closure of the coal-fired power plant would ultimately have far-reaching effects.

“We heard from the Pueblo Library that they would have to close some libraries because of the Comanche tax loss,” Koehler said. “It’s just amazing how this will impact every aspect of our community.”

Members of the advisory committee said advanced nuclear technology was “the clear path” among options they were considering to replace coal-fired tax revenues and jobs while meeting carbon reduction goals.

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Some residents complained about the town hall in February, and at a second meeting in March, speakers were too committed to the nuclear option, arguing that the discussion did not fully consider the potential economic and environmental downsides.

In response, commissioners invited David Schlissel — a Massachusetts-based analyst with the Institute for Energy Economics and Financial Analysis — to speak at a town hall meeting in September, where he offered a more pessimistic view of the practicality of a nuclear power plant in Pueblo.

“The nuclear industry has a long history of enormous cost overruns and years of time overruns, and by enormous I mean billions of dollars,” Schlissel said, referring to the country’s newest source of nuclear energy, Georgia’s $20 billion-over-budget Vogtle plant.

Xcel Energy's new plan includes nuclear power as a possible option, although it wouldn't come online until long after the Comanche 3 shutdown. In its filing, Xcel Energy says it will ultimately need advanced technologies like nuclear and geothermal to fully reduce its carbon emissions by 2050.