Xcel seeks competition

Seneca Coal supply in question; Xcel looking for alternatives

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Xcel Energy, the company that owns the Hayden Station power plant, is making changes that could affect the people that it serves, including Yampa Valley Electric Association customers.

Hayden Station uses about 5,000 tons of coal per day and about 1.7 million tons per year to provide electricity to the Yampa Valley and beyond. Since the plant was constructed in the mid-1960s, 100 percent of the plant's coal has come from Seneca Coal mines, located a convenient 10 miles from the plant.

Xcel Energy, the company that owns the Hayden Station power plant, is making changes that could affect the people that it serves, including Yampa Valley Electric Association customers.

But Xcel officials said Seneca's coal prices have increased recently and they are uncertain how much coal is left in the Seneca mines. For those reasons, they are evaluating alternative coal sources.

Seneca's Operations Manager Greg Kitchen said company policy prevents him from commenting on the issues surrounding the company, and information must come from the public relations department in Flagstaff, Ariz., which could not be reached for comment.

Under a contract between the power plant and Seneca, Seneca must confirm in April whether it will continue to provide 100 percent of Hayden's coal needs, beginning in 2006. Seneca could opt to provide a lower percentage of the plant's needs.

"The real issue is, we want some competition," Hayden Station Director Frank Roitsch said.

There are many costs associated with operating a power plant, Xcel representatives said. Fuel comprises more than 75 percent of those costs. To help minimize the cost and ensure a reliable coal supply, Xcel is looking to diversify its Hayden Station coal providers.

"We think we can save up to 20 percent on fuel costs by evaluating alternatives," said Mark Stutz, a media relations consultant with Xcel. "Savings from fuel costs can be passed down to the customers."

Xcel representatives say one of the most feasible alternatives would be to get coal from Twentymile Coal Company, about eight miles farther down Twentymile Road than Seneca.

"We would be very receptive to doing that, should we have the opportunity," said Ron Spangler, an administrative associate at Twentymile Coal Company.

If Xcel Energy decides to contract with a company other than Seneca for its coal needs, two coal-transport options have been discussed. One would be to continue trucking coal from mine to plant, and the other would be to transport the coal by train.

If a contract were to be reached with Twentymile, it could mean coal trucks running on a longer stretch of Twentymile Road, and running past the homes of families with school-age children during bus-route times.

If the coal were provided by train, Xcel is proposing to install an unloading facility along Union Pacific's mainline, about a half mile north of Hayden Station, across U.S. Highway 40. Coal would travel from regional mines by rail to the unloading facility. From there, a conveyor would be built to move the coal over the historic Carpenter Ranch and U.S. 40 to the plant.

Xcel Energy already has begun talking with the Routt County Board of Commissioners and landowners along Twentymile Road and the Routt County Commissioners about its new plans about the possibility of needing new transportation methods for bringing coal to the plant, said Michael Diehl, a siting and land rights agent for Xcel.

Also, Xcel representative discussed the possibility of coal trucks operating during the Hayden School District's bus route times. In the past, trucks have stopped during the times students are being picked up and dropped off, but doing so costs the plants time and money, they said.

New technology is available that can allow school buses and coal trucks to co-exist safely, Roitsch said. Xcel and the coal companies are discussing installing electronic signs, similar to the ones used by the Colorado Department of Transportation, along Twentymile Road to warn truck drivers when buses are operating.

"The goal is to coordinate the agriculture and school communities with the trucks, so that maybe there may be an even safer situation than what we have now," Diehl said.

With the coal trucks having to slow down, overall traffic also could slow down, Diehl said. Coal truck drivers also could communicate with bus drivers via radio when and where the trucks or buses are operating.

If the new transportation methods and measures were implemented, the earliest they would happen would be 2006, Diehl said.

-- To reach Nick Foster call 871-4204

or e-mail nfoster@steamboatpilot.com

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