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Water woes to prompt early closing of 1,067MW Tolk coal plant in Texas

January 15, 2020

Utility Dive:

Xcel Energy intends to shutter the 1,067 MW Tolk coal-fired generating station, which provides power to Texas and New Mexico, by Dec. 31, 2032, according to a stipulation endorsed by subsidiary Southwestern Public Service (SPS), environmental advocates and the utility division staff of the New Mexico Public Regulation Commission (NMPRC).

Per the stipulation, SPS will recruit an independent evaluator to assess possible ways to replace the coal facility, and submit a report to the NMPRC by June 2021. The utility has also agreed to study earlier retirement scenarios for the plant, given its dependence on a rapidly-depleting source of groundwater.

Both units of the Tolk coal-powered plant began commercial operation in the 1980s. But the facility requires water to cool its boilers and relies on only one source — the Ogallala aquifer, in the Texas Panhandle, which is drying out due to excess agricultural, industrial and urban usage. The utility reduced operations at the plant to minimum load during off-peak months in 2019, and intends to keep the plant idle during off-peak months starting in 2021, if regulators in Texas and New Mexico allow it.

Even with new well infrastructure, the aquifer will not be able to support the Tolk facility until 2042, when the first of its units is currently scheduled to retire, according to SPS. The utility requested commission permission to abandon Tolk’s Units 1 and 2 in 2032 as part of its July 2019 general rate case application, which also sought a $50.8 million — or 18.7% — increase to its case rate revenue.

“Under the company’s projections, if it continues to operate the plant normally, they’ll run out of their groundwater rights about the mid-2020s. If they switch to seasonal operations — which is basically June through September — they can extend that, they think, until 2032,” Joshua Smith, senior staff attorney at the Sierra Club Environmental Law Program, told Utility Dive.

“All of the parties that were involved in the New Mexico case have now agreed that the plant will be retired and abandoned by 2032,” Smith said. While he acknowledged concerns over replacing the plant’s capacity and possible increases in customer rates, “in our view, there’s still a sufficient amount of lead time to mitigate those rate impacts, whatever they might be, and more than sufficient time — 12 years at this point — for the company to procure replacement capacity,” he said.

[Kavya Balaraman]

More: Water scarcity accelerates plans to close Xcel’s Tolk coal plant by a decade

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