Delays in getting Xcel Energy’s damaged Comanche 3 coal-fired power plant back online may create a shortfall in electricity this summer, requiring customers to cut back on use during heat waves and other peak periods.
Concerned about the potential gap between electricity generation and demand, the Colorado Public Utilities Commission this week ordered Xcel Energy to file a plan by April 15 to deal with the looming deficit.
Xcel Energy had projected a manageable 77-megawatt deficit in capacity for this summer, but when Comanche 3’s return to operation was pushed from June to August, it widened the gap to 492 MW, according to the PUC.
The company’s next update on Comanche 3 and capacity issues is slated for June, but the PUC commissioners, at their meeting Wednesday, said addressing summer shortages can’t wait until then.
Commissioner Megan Gilman said she was “really shocked and disappointed with the posture of like, well, we’ll figure this out in some June filing. This is something to be figured out right now.”
In a statement, Xcel Energy said, “We have identified resource adequacy as a growing risk for several years now and proposed solutions.”
The commission’s main concern is the peak demands on the system that can be driven by high summer temperatures.
“I’m not convinced they’re going to be able to meet summer peak, particularly when we’ve got 85-degree temperatures in March,” Commissioner Tom Plant said.
On Aug. 7, as temperatures climbed to 99 degrees, Xcel Energy issued an “orange alert” to its 1.6 million customers to conserve electricity. Comanche 3 was also out of service then.
Customers were asked to set thermostats to 78 degrees or higher, turn off unneeded lights and delay using major appliances until after 10 p.m.
“Under normal summer conditions, even with the shortfall arising from the extended outage of Comanche 3, the company may be fine but given that Denver metro temperatures were 30 to 40 degrees above normal highs in March, I think there may need to be more urgency in the company’s contingency planning,” PUC Chairman Eric Blank said.
In its January report on the status for Comanche 3 repairs and available resources, the company estimated it had 7,457 MW of generating capacity and projected a summer peak of 7,534 with a 77 MW shortage. That, however, assumed 415 MW of Comanche 3 generation.
“As the company has repeatedly stated, the persistent nature of the near-term capacity deficit in 2026 and 2027 reinforces that resource adequacy is a clear and present concern to the safe and reliable operations of the electric grid,” Xcel Energy said in the January report.
To address peak demand, a utility can add generating capacity, or it can reduce the peak by reducing demand.
New generation can’t be brought on in a matter of months. Xcel Energy said it has contracted for wholesale electricity purchases for 2026, although the exact amount is redacted in the report.
The company said it is also looking to extend purchases of hydropower through existing contracts.
More efficient grid management of voltage and “reactive power,” which is the power reflected back onto the grid and not consumed, through Integrated Volt Var Optimization, could add about 20 MW of capacity in 2026, Xcel Energy said.
Exploring larger credits for giving Xcel control of the thermostat
The PUC commissioners, however, said the biggest way of coping with electric peaks this summer will be through managing customer demands.
Blank said he wants the company to make sure that customers who are part of the demand response programs — such as the AC Saver Rewards for residential customers and Peak Day Partners for business — really can interrupt or reduce demand.
Blank also said the commission and company could look at increasing the bill credits, by as much as 50% for the summer, in the Interruptible Service Option Credit, or ISOC, program, in which large business customers agree to cutbacks on 10-minutes notice.
Another option was using an Amber Alert-like system, as done in California and Alberta, Canada, which has reduced demand in a matter of minutes, Blank said.
“The commission identified several solutions for additional analysis which we have studied in the past and continue to evaluate as we head into the summer,” Xcel Energy said. ”This includes evaluating all opportunities to recover the Comanche 3 repair schedule to bring the unit back online before August.”
Xcel Energy generates revenue through recovering the cost of new infrastructure plus a fixed return and by selling electricity. The conservation programs do not generally generate income.
“We need to make a choice here, and we need to deploy what can be deployed now, whether or not that’s the best for the company’s profits,” Gilman said. “We need to make a decision that the most paramount issue here is the system reliability.”
Handling stress on the system will likely fall on customers as it did last summer, Gilman said.
“If we look at the orange alert of last summer, demand response came through huge for the company, and very much kind of saved the day on ensuring that the system could meet that peak by contributing 351 MW,” Gilman said.
That left the commission pondering what to do about Comanche 3. “Not to state the obvious, but we have a real problem with Comanche 3,” Plant said.
A 2021 PUC staff report found that the unit had 700 days of shutdowns since it was opened. Since that report, Comanche 3 has been down at least another 293 days, according to data from the Colorado Office of the Utility Consumer Advocate.
“I’ve been on this commission for six years,” Gilman said. “This is the second entire year that Comanche 3 has not run. That’s a third of the time I’ve been here, and that’s only with these two major outages.
“There have been a lot of other outages,” she added. “It could be close to half the time that I’ve been here that this unit has not been available to run.”
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