A $253 million lawsuit against Xcel Energy over allegations of mismanagement of a power plant in Pueblo kicked off Oct. 3.

The lawsuit, filed by CORE Electric Cooperative, is expected to last about four weeks.

At issue is Comanche 3, the largest coal-fired plant in Colorado at 750 megawatts that was planned to operate for 60 years. CORE has a 25% share of ownership in the plant but is not involved in its operation. The $1.3 billion plant has been offline for more than 700 days since 2010, according to CORE.

CORE, the largest not-for-profit electric distribution cooperative in the state, serves more than 173,000 customers along the Front Range. Xcel Energy, Colorado’s largest investor-owned utility, serves 1.6 million electric and 1.5 million natural gas customers.

The cooperative says it incurred more than $35 million in damages from having to purchase power from alternative sources during the outages, as well as to pay for CORE’s portion of repairs and maintenance at the plant.

Xcel said it’s confidence of it will prevail in court. 

“We disagree with CORE’s claims,” Michelle Aguayo, a spokesperson for Xcel, told The Denver Gazette. “We are confident that those claims will be rebutted through the trial.” 

CORE sent a letter to Xcel in August 2022 invoking a contract provision allowing it to withdraw from its agreement. Xcel denied that CORE had the right to withdraw. CORE is asking the court to rule on its withdrawal action, as well.

“We have an obligation to our members to protect their interests. As the mismanagement of Comanche Unit 3 continues, it is clear that we must take this step to withdraw non-operational ownership,” CORE CEO Jeff Baudier said in a prior statement to The Denver Gazette.

The CORE lawsuit alleged a history of poor operating practices, leading to shutdowns for more than 700 days since 2010, that included:

• Damage to the turbine that turns the generator caused by improperly purified water prior to 2020

• Failure to perform scheduled maintenance recommended by the manufacturer from 2010 to 2020

• Damage to turbine blades, shaft and generator caused by an employee shutting off the flow of lubricating oil to the turbine in 2020

• Damage to the generator caused by an employee error in closing a circuit breaker in 2022

• Deaths of two workers buried by a slide on a coal pile in 2022

The now-planned early closing of the plant by January 1, 2031 — barely 20 years into the plant’s operational life, which Xcel and the Public Utilities Commission said would help Xcel meet its Greenhouse Gas Reduction Roadmap obligations — is an excuse to shut down a troubled asset and avoid further potential maintenance costs, CORE alleged.

“CORE objected to PSCOs pursuit of early closure and imminent down-rating of plant operation without considering the impact to CORE or its rights as a plant co-owner, in breach of the Project Agreements,” Amber King, the co-op’s communications manager, said in a statement. “CORE was not part of the decision to select a date as early as 2030 and opposed that date. Also, CORE asserts that the prior mismanagement and resulting unreliability of Comanche 3 was a component of the decision to approve the early plant closure.”

The co-op claimed that Xcel’s 2021 Electric Resource Plan and Clean Energy Plan confirms that the retirement of Comanche 3 is not necessary to meet its statutory emissions reduction target by 2030.

The Comanche 3 generating unit went into service in 2010 after five years of construction. At the time, it was the first new coal-fired electric generating station built in Colorado in nearly 30 years and was projected to be operating until 2070.

The design included advanced emission controls that reduced sulphur dioxide by 65% and nitrogen oxide by 30%, while doubling overall generating capacity. The advanced system also uses about half the amount of water normally required.

The Comanche Station units 1 and 2 were commissioned in 1973 and 1975 and are scheduled to shut down in 2022 and 2025, after some 55 years of operation.