The Colorado Public Utilities Commission (PUC) Wednesday gave Xcel Energy the green light to develop a plan to close two coal-fired power plants and replace them with renewable or low-cost alternatives.

Under the proposal, which Xcel calls its Clean Energy Plan or CEP, the utility would get 55 percent of its electricity from renewable sources by 2025. Xcel said it would not go ahead with the plan if it increases customer bills.

The PUC gave the go ahead on a series of 3-0 votes from commissioners Wendy Moser, Frances Koncilja and Jeff Ackermann, the commission chairman. Final approval will depend upon the plan Xcel submits.

Among the elements in the CEP are:· Retiring of 660 megawatts (MW) of coal-fired generation at its Comanche Generating Station in Pueblo about 10 years early, and seeking accelerated depreciation on the units.

· Issuing bids for 1,000 MW of wind, up to 700 MW of solar and 700 MW of natural gas or storage.

· Reducing a rider used to finance renewable energy projects to 1 percent from 2 percent on a customer’s monthly bill.

· Construction of a new switching station for a southern Colorado transmission “energy resource zone” to help foster the further development of renewable generating resources in rural Colorado.

The PUC did place some requirements on Xcel, the state’s largest electricity provider, with 3.1 million customers.Those changes left Xcel sounding a note of caution.

“The Colorado Energy Plan was developed with an incredibly diverse group of customers, independent power producers, state agencies, environmental organizations, labor, renewable energy organizations, and other stakeholders,” said David Eves, Xcel executive vice president and group president for utilities, said in a statement.

“The modifications discussed today by the Commissioners could impact the plan and will have to be considered by the many parties to the agreement once we see a written decision,” Eves said.

As an alternative to a renewable portfolio, the company proposed offering a “least-cost” portfolio if it exceeded $50 million in savings, but the utility commissioners said they wanted to see a least-cost portfolio regardless of the savings.

The Coalition of Ratepayers, a group of businesses and citizens lead by the libertarian Independence Institute, opposed the Xcel plan, and some of their critique found its way into the PUC ruling.

The coalition argued that some of Xcel’s accounting techniques – such as accelerated depreciation and the annuity method of depreciation – overstated the value of the renewable energy plan. The PUC order Xcel to provide figures with and without the accelerated depreciation.

The PUC staff said that the annuity method could “skew” the numbers and should be “given little weight.” The commission agreed.

The coalition also called for an annual cost impact report, which the commission also adopted.

“I think the coalition raised a good point,” Moser said.

“We are happy to hear that the commission did consider our arguments, especially on the annuity method and accelerated depreciation,” said Amy Cooke, executive vice president of the Independence Institute. “Those have potential to tip the financial scales against ratepayers, who will be burdened with the costs.”

Cooke said the collation would make an official comment after reviewing the commission’s written decision.The commissioners also required an economic impact study on closing the two power plants in Pueblo. This had been requested by Pueblo’s Energy Future, a local energy advocacy group.

Xcel has already issued a call for projects and received 430 proposals with some of the lowest quotes for renewable power in the country.

More than 350 proposals were submitted for renewable energy projects with an average price for 96 wind projects at 1.8 cents a kilowatt-hour (kWh) and the 152 solar photovoltaic projects at 2.95 cents per kWh.