The Colorado Public Utilities Commission told Minneapolis-based Xcel Energy that it could proceed with plans to close the two plants -- the 156-megawatt Arapahoe Station in Denver and the 73-megawatt Cameo Station in Grand Junction -- and replace the lost generation with a 200-megawatt advanced solar plant.

The move will help Xcel meet Colorado's renewable portfolio standard calling for 20 percent of the state's electricity to come from renewable resources by 2020. It will also help Xcel comply with Gov. Bill Ritter's (D) 2007 mandate to cut utility-sector carbon dioxide emissions by 20 percent below 2005 levels by 2020.

By volunteering to shut down the two coal plants, Xcel becomes the first utility in the country to meet greenhouse gas reduction goals through power plant closures.

The planned plant closures, combined with a promise to significantly expand wind power generation in the state by 2015, were part of Xcel's formal electric resource plan, which must be submitted and approved by state regulators every four years.

A written decision on Xcel's resource plan is expected from the PUC in mid-September, but the panel's chairman wasted no time in praising the plan for its groundbreaking provisions.

"We are talking about nothing less than the economic and environmental future of the state," Chairman Ron Binz said in a statement. "Xcel Energy brought forth a laudable plan for meeting the governor's goals. We're happy to do our part in moving this sector closer to those goals."

Joe Fuentes, an Xcel Energy spokesman in Denver, said the utility was pleased with the commission's approval of its renewable energy strategies, which he said were key steps toward reducing Colorado's CO2 emissions while also meeting the state's need for new, reliable electricity generation capacity.

The company is expected to begin soliciting bids on design and construction of the new solar plant later this year. The plant site has not been determined. Xcel officials also said the utility will begin working on plans to build as much as 850 megawatts of wind energy within its service territory by 2015.

All of those plans will be subject to further review by the PUC and an independent evaluator, officials said.