Comanche Generating Station

The 1.4-GW, coal-fired Comanche Generating Station in Pueblo, Colorado.

CORE Electric Cooperative on Sept. 7 filed suit against Public Service Company of Colorado, an Xcel Energy subsidiary, in Colorado District Court, for breach of contract based on its operation and maintenance of the Comanche 3 coal-fired generating plant in Pueblo.

The cooperative seeks a jury trial and monetary damages.

CORE claims it has not gotten its share of power from the plant, which should have a 60-year operational life span. The plant came on line in 2010 and has been off line for lengthy periods.

The $1.3-billion, 750-MW Comanche 3 facility is owned by PSCo, CORE and Holy Cross Electrical Association and operated by PSCo. Details of ownership and other information were redacted from the legal filing. CORE seeks compensation for energy it alleges it was forced to purchase from PSCo when Comanche 3 generation was not available, as well as for expenses associated with repairs and maintenance that it claims resulted from PSCo's neglect and misoperation.

"We enter into contracts to protect our members and we take action when necessary to recover unjustified costs imposed upon them or for damage to CORE's assets," CORE CEO Jeff Baudier said in a news release. In an accompanying video, he said, "We would not have done what we did today unless we thought it was absolutely necessary to protect our members' interests."

CORE alleges the facility has "the worst reliability record of any of PSCo's generation facilities."

"Most recently, Comanche 3 was out of service from January 2020 to January 2021 largely due to a failure of its steam turbine, which suffered damage because of years of neglect and the subsequent destruction of its bearings when a PSCo employee shut off the lubrication oil feed when the turbine was spinning at high speed," the co-op said in the legal filing.

The incident resulted in $30 million in damages and, during that 2020-2021 outage, CORE said it was forced to purchase more than $38.5 million in replacement power with a net additional cost of more than $20 million.

Based on permanent damage to the plant, excessive repair and maintenance issues, and expected unplanned outages for additional repairs, CORE anticipates Comanche 3 will be "retired from service prematurely."

CORE is seeking to recover the damages it says "are a direct result of PSCo's failure to operate Comanche 3 in accordance with its contractual obligations and Prudent Utility Practices."

The companies entered into a power-purchase agreement in 2004 that gave CORE the option to own any PSCo power generation facilities that could be used to supply it with wholesale power. The precise terms are redacted, but CORE contends PSCo knew "and could reasonably foresee" that if power was not delivered from Comanche 3, the co-op would be forced to purchase power from PSCo.

Two major incidents in 2020 took Comanche off line for a total of 372 days. Ongoing problems prompted the Colorado Public Utilities Commission to open an investigation on Oct. 30 of that year. In a March report, the PUC found the plant had averaged 95 days of outages per year since 2010. The highest outage rates were in 2011, at 133 days; 2014, 89 days; 2015, 78 days; and 2020, 354 days (see CEM No. 1631).

The report found the levelized cost of energy for Comanche 3 averaged $66.25/MWh between 2010 and 2020—45 percent higher than forecast by Xcel. Average O&M costs over the plant's 10-year operational period were around $12/MWh, compared with a national average for fossil fuel-fired steam plants of $9.77/MWh.

The unit is scheduled for decommissioning in 2070.

Findings from the PUC report are cited throughout the filing by CORE, as is a quote from the report: "Why is Comanche 3, a unit still in its first decade of its 60-year useful service life, plagued with such poor unit reliability?"

A host of issues ranging from "water intrusion" in 2018 to "water chemistry" problems and the structural failure of two turbine blades are problems that CORE said have caused the plant's value to diminish. The co-op claims "the expected total useful life of Comanche 3 is now less than half of the original projection of 60 years."

CORE said it attempted to "remedy its claims" with PSCo as outlined in its joint-operating and O&M agreements. When it was unable to reach an agreement with Xcel, it filed the lawsuit.

The five counts delineated in the lawsuit include breach of contract and declaratory relief for the O&M cost recovery. Another alleges PSCo "enjoyed an unjust benefit, at CORE's detriment" from the "much higher payments for replacement power from CORE as a result of PSCo's failure to properly operate Comanche 3."

In addition to the 25-page complaint [2021CV32787], CORE simultaneously filed in district court to have all of the information in the filing made available to the public. Xcel contends the redacted information is confidential; however, CORE said the blacked-out text does not consist of valuable trade secrets.

"The only apparent reason PSCo would seek to keep the unredacted Complaint and its exhibits from the public is to avoid embarrassment and reputational harm. To be sure, they paint an unflattering picture of PSCo's operation of Comanche 3. However, embarrassment by one's own operational problems does not justify the denial of public access to this case," the filing says. "Instead, it actually strongly favors public access."

Xcel Energy is reviewing the filed documents and generally does not comment on pending lawsuits, spokesperson Michelle Aguayo said in an email to California Energy Markets. "Xcel Energy remains committed to ensuring the safe, reliable operation of the plant through its proposed early retirement in 2040," she said. "Comanche 3 is one of the lowest cost generating plants on our system and has proven valuable to the system over its life."

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