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Xcel hit with $26.45 million judgment for Comanche 3 power plant negligence

By 10/31/2023 | updated 2 years ago
FILE PHOTO: Xcel Energy's Comanche Unit 3 coal-fired power plant, just southeast of Pueblo.

A Denver District Court jury on Wednesday awarded CORE Electrical Cooperative $26.45 million in damages from Xcel Energy after jurors determined the company mismanaged the Comanche 3 generating plant near Pueblo.

CORE filed the $235 million lawsuit in September 2021, alleging that Xcel breached its contractual obligations related to the operation and maintenance of Comanche 3, of which CORE owns a 25.33% interest.

CORE said the plant “significantly under-performed peer facilities in net output, availability and outage rate, and will be retired nearly 40 years short of its planned production life.”

The $1.3 billion plant has been offline for more than 700 days since it went online in 2010. The cooperative said it incurred more than $35 million in damages from having to purchase power from alternative sources during the outages, as well as having to pay for CORE’s portion of repairs and maintenance at the plant.

“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,” CORE CEO Jeff Baudier said in a statement. “We look forward to moving on from this lawsuit as the next step in our independent power future.”

CORE was also asking for its investment in the plant’s construction to be refunded, in part because of the failures, and in part because of Xcel’s plan to shut down the plant by 2031 as part of its decarbonization plan to meet Gov. Jared Polis’ Greenhouse Gas Reduction Roadmap goals.

CORE told The Denver Gazette in an earlier statement that shutting down the facility is unnecessary for Xcel to meet its decarbonization goals and that doing so wastes CORE’s investment in the plant.

The jury ruled for CORE on two of the claims in the lawsuit, one involving an employee who inadvertently shut-down the lubricating oil system to the plant’s turbine, which destroyed it. The other incident involved operator negligence during operation of a high-voltage circuit breaker that back-fed electricity to the generator, causing major damage.

The jury denied seven other claims, including the question of whether the problems at the plant justified CORE’s demand it be allowed to withdraw from the original project agreements.

“We thank the jury for listening to the evidence over the past few weeks,” said Michelle Aguayo, spokesperson for Xcel Colorado in a statement to The Denver Gazette. “Although CORE asked for more than $250M, the jury largely rejected its claims.

“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,” Aguayo said. “We tried to work with CORE to navigate these policy changes, but they decided to pursue this lawsuit instead.”

In a statement to the Denver Gazette, Amber King, communications manager for CORE, said the cooperative is severing its relationship with Xcel and is pursuing other power providers.

“CORE will be exiting its power purchase agreement with Xcel on December 31, 2025,” King said. “CORE has secured agreements with other parties to develop and secure new resources to replace the Xcel PPA.”

FILE PHOTO: Xcel Energy’s Comanche Unit 3 coal-fired power plant, just southeast of Pueblo.
Courtesy the Pueblo Chieftain
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Scott Weiser

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