By Sarah Montalbano

In 2018, Xcel Energy, an investor-owned utility serving millions of customers across eight states, was the first U.S. utility to pledge to deliver 100% carbon-free electricity by 2050.  

Eight years later, Xcel is pleading with Colorado regulators to let it continue running its coal plants until 2030. What happened to “steel for fuel,” the company’s slogan for replacing reliable power plants with wind and solar and saving everyone money in the process?

“Steel for fuel” hasn’t worked out for grid reliability. Xcel Energy filed a report on March 2 updating the Colorado Public Utilities Commission (PUC) of its progress in bringing Comanche Unit 3, a coal-fired generator near Pueblo, back online.

The company speaks frankly about its near-term reliability issues. The next two years are likely to see shortfalls and even 2028, in the company’s words, “is challenged.” That’s after accounting for the continued operation of Comanche Unit 2 through the end of 2026, which the PUC begrudgingly allowed. Comanche 2 was originally supposed to retire at the end of 2025.

Xcel’s proposal is to repair Comanche 3 and extend the life of all four of its remaining coal units in Colorado through 2030. Xcel Energy does not mince words declining to repair Comanche 3 is not an option, though its necessity has “recently been questioned,” including by Western Resource Advocates. A spokesperson for the group has said “the renewables on the system have shown that we can meet the system needs without that coal unit.”

That’s not what Xcel thinks about it. The company says developing new generation to replace the unit’s 415 megawatts of capacity would “cost billions of dollars” and could be online “at best,” in 2029, far too late to avert blackouts. There are “no viable alternatives” to the continued operation of Comanche 3. Even past 2028, when there is a slight positive reserve margin, Xcel says the “margin for success is razor thin.”  

You know the situation is bad when a company states “all things will need to go to plan” to avoid blackouts.

This is a huge departure from the same company that leapt to promise full retirement of coal in Colorado by the end of 2030. And if you were to only read Xcel’s investor materials, you wouldn’t think the company is worried about keeping the lights on.

Take Xcel’s March 2026 investor presentation. The “steel for fuel” brand remains alive and well, enjoying seven slides in the deck — and for good reason. Utilities earn no regulated rate of return on fuel expenses. But the steel part of “steel for fuel,” or capital investment, earns them a guaranteed 9% to 11% return. The more it builds, the more it earns.

Unfortunately, what “steel for fuel” means for ratepayers is more like “steel for fuel, and still fuel,” because that swap isn’t happening. Instead, Xcel has to maintain reliable coal and natural gas plants while massively overbuilding wind and solar. Reliable, baseload thermal plants still supply 54.4% of Colorado’s electricity annually. And they’re indispensable when temperatures drop, as they did during Winter Storm Fern, when coal and natural gas together supplied 85% of Xcel Energy’s electricity.

Overbuilding wind and solar also has consequences for ratepayers’ wallets. Former chief executive of Xcel Energy, Ben Fowke, said in 2019, “In fact, we are saving customers money,” through transitioning to wind and solar. That’s hard to believe when Xcel Energy believes residential electricity prices could increase by as much as 55% by 2029, compared with 2024 levels, thanks to new infrastructure buildout.

Across the eight states it serves, Xcel is planning to spend $60 billion in new capital through 2030, with Colorado alone seeing $2.2 billion of new spending on renewables. The only category costing Xcel’s ratepayers more than renewables is electric transmission — which is needed to bring wind and solar energy from far-flung areas to population centers.

Xcel didn’t stumble into a reliability crisis, as much as it would like to be viewed as an innocent bystander. Colorado lobbying records show the company was actively involved in supporting the state’s economy-wide greenhouse gas reduction laws, including SB19-236, which requires Xcel to cut emissions 80% by 2030. A favorable provision in that law allowed Xcel to own 50% of its future renewable assets, meaning customers would pay for them, plus the company’s guaranteed return on every dollar spent. When Xcel filed its Clean Energy Plan with the PUC in 2023, it proposed owning two-thirds of new generation, well above the 50% target in the law it helped write. The PUC trimmed it back, but the instinct was telling.

Keeping reliable, baseload generation running is what’s best for consumers and the grid. The problem is Xcel used coal retirement pledges to justify a massive buildout of wind and solar, on which it makes guaranteed returns, while the coal plants it promised to shut down turned out to be indispensable. The company helped write the laws that created this predicament, lobbied for the greenhouse gas targets, and secured the right to own and charge customers for its wind and solar assets. Now it’s seeking rate increases to pay for all of it.

“Steel for fuel” was never about saving customers money. It was about building its rate base. And on that score, it’s working exactly as designed.

Sarah Montalbano is an energy policy analyst at the Independence Institute and Always On Energy Research.