Partial owner of Xcel's newest and last coal plant awarded judgement over year-long power outage
A Denver District Court jury recently awarded an electricity distributor $26.45 million after the distributor sued Xcel Energy over what it called mismanagement of a power plant.
CORE Electric Cooperative sued Xcel in September 2021 after its members suffered a lengthy power outage in 2020. The cause, CORE claimed, was Xcel's mismanagement of the Comanche Unit 3 coal-fired power plant in Pueblo.
CORE owns a 25.33% interest in the Comanche 3 plant. The lawsuit was filed eight days after CORE, formerly known as Intermountain Rural Electric Association (IREA), announced its rebranding as CORE Electric. The company claims to be one of the largest member-owned electric distribution cooperatives in the U.S.
The company stated in court documents Comanche 3 suffered a year-long shutdown (Jan. 2020-Jan. 2021) due to a damaged steam turbine. The complaint blamed an employee for causing the damage and management for what it referred to as "years of neglect."
CORE Electric incurred millions of dollars in expenses due to Comanche's lack of output, including the purchase of replacement power during those outages, the suit claims.
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CORE also desired compensation for anticipated expenses resulting from Xcel's plan to retire the Comanche plant early. Comanche 3, Xcel's most recently built coal-fired power plant, came online in 2010. It cost an estimated $1.3 billion.
In April 2022, Xcel announced plans to retire the plant in 2040. Six months later, that date was advanced to 2030.
Xcel, in fact, then announced plans to shut down all of its remaining coal-fired plants by the end of that year; Comanche 2, Craig 1 and Pawnee facilities are slated for retirement in 2025, Hayden 2 in 2027, and Hayden 1 and Craig 2 in 2028.
Comanche 3, the last one built, will be the last to shut down. When first opened, Xcel had planned to operate the plant until 2070.
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"This verdict will at least partly compensate CORE for damages caused by the systemic failures of Xcel to prudently operate Comanche 3, which negatively impacted our member-owners. We look forward to moving on from this lawsuit as the next step in our independent power future," stated CORE CEO Jeff Baudier in a press release.
The jury's award falls short of the $250 million that CORE was seeking in its breach-of-contract lawsuit.
"The evidence showed CORE began looking for a way to recoup its investment in the Comanche 3 power plant once it became clear Colorado was moving towards stronger environmental goals," an Xcel spokesperson wrote in a statement to CBS News Colorado. "We tried to work with CORE to navigate these policy changes, but they decided to pursue this lawsuit instead."
The Environmental Protection Agency fined Xcel $925,000 in May of last year for issues related to its storage of coal ash, a waste product of coal-fired power plants. Two months later, a pair of workers at the plant were buried and killed in a pile of coal. The company was fined $300,000 by the U.S. Department of Labor for safety violations from the incident.
Xcel has set goals to reach 80% carbon-free energy production by 2030 and 100% by 2050.
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Xcel's spokesperson added that the company intends to file post-trial briefs with the court "asking it to correct some significant errors of law that impacted the trial and, if necessary, appeal" the jury's decision.
