From The Craig Daily Press (Joshua Carney):
Tri-State Generation continues to make changes that are hitting the Yampa Valley hard.
On Thursday, Tri-State Generation and Transmission Association announced it will close all of its coal-fired power plants and mines in New Mexico and Colorado by 2030. The power provider serves nearly 20 rural electric cooperatives.
Tri-State announced the closure of its Escalante Power Plant in Prewitt, New Mexico, by the end of 2020. It plans to close Craig Station Units 2 and 3, and the Colowyo Mine in Northwest Colorado by 2030.
The announcement from the Westminster-based power provider comes on the heels of pressure by two of its rural electric co-op members, including Brighton-based United Power and Durango-based La Plata Electric Association, in hopes of making a faster transition to renewable energy in recent years. The pair have sought to break up with Tri-State as a result of the power wholesaler’s reluctance to use more renewables and in seeking more say over their power sources, according to previous Craig Press reporting.
The power provider officially announced the following information on the closures during a teleconference Thursday:
Closures will result in 100% reduction of coal emissions in Colorado and New Mexico while increasing Tri-State’s competitiveness with cleaner portfolio and stable rates. Major changes in generation portfolio include closure of Escalante Station near Prewitt, N.M., by end of 2020, and closure of Craig Station and Colowyo Mine in Northwest Colorado by 2030. Tri-State is working with state and local leaders to support affected employees and communities, and will seek legislation in Colorado to provide certainty on state greenhouse gas reduction rules.
In total, the closure of the power plants and mine impacts roughly 600 power plant and mine employees, who have been key to Tri-State’s and its predecessor generation and transmission cooperatives’ ability to supply reliable and affordable power to cooperatives for decades…
Tri-State will work with state and local officials to support affected employees and their communities during the transition…
Craig Station and Colowyo Mine in Colorado retiring by 2030
Craig Station, a 1,285-megawatt, three-unit power plant in Moffat County, will close by 2030, based on Thursday’s Tri-State announcement. The power plant’s units were constructed by Colorado Ute Electric Association and began operations between 1979 and 1984.
Tri-State acquired Craig Station and other assets from Colorado Ute in 1992. The power plant currently employs 253 people.
Tri-State previously announced that the 427-megawatt Unit 1 will close by the end of 2025. Despite Thursday’s announcement for Units 2 and 3, the closing date for Unit 1 remains unchanged.
The 410-megawatt Unit 2 and the 448-megawatt Unit 3 will close by 2030, according to Highley. Tri-State operates Craig Station and owns 24% of Units 1 and 2. Tri-State owns 100% of Unit 3. Tri-State is working with the other plant owners to determine the specific details for the retirement of Unit 2.
Colowyo Mine, located in Moffat and Rio Blanco counties, produces coal used at Craig Station and will cease production by 2030, at which time operations will turn entirely to reclamation. Tri-State purchased Colowyo Mine from Rio Tinto in 2011. The mine currently employs 219 people.
Tri-State is working with the Governor and legislative leaders on proactive legislation that ensures the closures meet greenhouse gas compliance obligations in Colorado, while also maintaining stable rates and reliable power for Tri-State members. This legislation would give Tri-State the ability to transition resources in a timely and financially responsible manner while providing certainty.
Tri-State previously retired its coal capacity at Nucla Station in Western Colorado in 2019.
Escalante Station in New Mexico retiring by the end of 2020
Escalante Station, a 253-megawatt coal power plant near Prewitt, N.M., will close by the end of 2020. The power plant was constructed by Plains Electric Generation and Transmission Cooperative and began operations in 1984. Plains Electric merged with Tri-State in 2000. The closure of the power plant will impact 107 employees.
“The timeline to retire Escalante Station by the end of 2020 is driven by the economics of operating the power plant in a competitive power market, and by Tri-State’s addition of low-cost renewable resources,” said Highley. “Our Escalante Station employees work safely and tirelessly to serve our cooperative’s members, and we’re committed to support them through this difficult transition.”
Escalante Station employees will receive a generous severance package, the opportunity to apply for vacancies at other Tri-State facilities, assistance with education and financial planning, and supplemental funding for health benefits.
Tri-State will also provide $5 million in local community support, and is working with the New Mexico Governor’s Office, legislative leaders and local communities in Cibola and McKinley counties to address the impacts of the transition, including workforce retraining and other economic development efforts. Tri-State will also address issues related to the McKinley Paper Company, which purchases steam and water from Escalante Station.
Tri-State previously retired its coal ownership capacity in Unit 3 of San Juan Generation Station in New Mexico in 2017.
On Thursday, following the State of the State address in Denver, Speaker KC Becker (D-Boulder) reacted to an announcement from the Tri-State Generation and Transmission Association outlining the retirement of all coal generation in Colorado and New Mexico.
“I applaud Tri-State’s commitment to Colorado’s clean energy future and am impressed by the bold carbon emissions reduction target they set. Meeting our state’s targets requires immediate collective action, and I’m happy to see Tri-State take their role seriously,” Speaker Becker said. “As our state transitions toward a clean, renewable energy future, we must always keep in mind that this change will bring difficult transitions for Colorado’s energy workers, their families and communities.
A commitment to a clean energy future also requires a commitment to a fair and just transition for Colorado’s workers. Protecting and supporting workers and communities through these shifting economic tides remains a top priority for the legislature. I look forward to continuing to work with a broad array of stakeholders to find ways to support and protect working families affected by a changing energy economy. The Just Transition Office created by the legislature last year will continue to work with impacted communities and worker representatives across the state on a plan to support those impacted by the transition away from coal.”
From The Colorado Sun (Jesse Paul):
Tri-State has been pressured by its rural electric co-op members — including Brighton-based United Power and Durango-based La Plata Electric Association — to make a faster transition to renewable energy in recent years. The pair have sought to break up with Tri-State as a result of the power wholesaler’s reluctance to use more renewables and in seeking more say over their power sources.
Two co-ops have already negotiated exits from Tri-State. They are the Delta-Montrose Electric Association and the Kit Carson Electric Cooperative in Taos, N.M.
Tri-State, a Westminster-based, nonprofit power provider, retired its Nucla Station coal-fired power plant in September. The utility says the closures won’t cause electric rates to rapidly rise.
“Serving our members’ clean energy and affordability needs, supporting state requirements and goals, and leading the fundamental changes in our industry require the retirement of our coal facilities in Colorado and New Mexico,” Rick Gordon, chairman of the board of Tri-State and a director of Mountain View Electric Association in eastern Colorado, said in a written statement. “As we make this difficult decision, we do so with a deep appreciation for the contributions of our employees who have dedicated their talents and energy to help us deliver on our mission to our members.”
From Colorado Public Radio (Grace Hood):
“That Tri-State announcement is a good business decision,” reflected Republican State Sen. Bob Rankin who represents the region. “But believe me, there are going to be people crying in Craig, Colorado.”
According to one estimate by the Rocky Mountain Institute, an environmental think tank, Tri-State stands to gain $600 million by replacing existing coal resources with new wind and solar.
While Tri-State hasn’t committed to an economic lump sum payment for Craig yet, early indications suggest that the money could be substantial. A company-owned coal-fired power plant closure announced in Escalante, New Mexico resulted in $5 million of support. Tri-State is encouraging officials to match dollars from public and private sources…
Along with financial support from Tri-State, Barela said Craig can expect help from Colorado’s newly formed Just Transition Office. It’s in the middle of a fact-finding mission guided by Keystone Research Center to discover what job transition programs in coal communities have been successful.
Barela, the state of Colorado and Tri-State will continue to work with Craig officials in the coming months. If there’s one silver lining to the Tri-State announcement, it ’s that it comes at a time of tremendous state economic prosperity. Colorado’s unemployment hovers around 2.5 percent.
From The Albuquerque Journal (Kevin Robinson-Avila):
Tri-State Generation and Transmission Association will shut down its 253 megawatt coal-fired generating station near Grants by the end of 2020 as part of the wholesale electric supplier’s efforts to transition to a clean energy grid over the next decade, according to a Thursday announcement.
The closure will eliminate 107 jobs at the plant, and potentially scores more at a nearby coal mine that supplies fuel for the generating station.
The association has run the Escalante plant in Prewitt since 2000, after it merged with Plains Electric Generation and Transmission Cooperative, which constructed and opened the plant in 1984. Escalante was built to operate through 2045, but Tri-State is closing it 25 years early as part of a broad plan to eliminate all the association’s coal-fired generation in New Mexico and Colorado to meet new regulations in both states that mandate a transition to a carbon-free grid…
“We understand it’s a shock for our employees,” said Tri-State CEO Duane Highley in a conference call with reporters Thursday afternoon. “We will work with them and the local communities where they work to help minimize the negative impacts.”
Tri-State said employees will receive “generous” severance packages, opportunities to apply for vacancies at other Tri-State facilities, supplemental funding for health benefits, and educational and financial planning assistance.
The association will also provide $5 million in local community support in New Mexico, Highley told reporters. The association has been working with Gov. Michelle Lujan Grisham’s office and with state legislators to collaborate on assistance programs and retraining for workers, he said…
Workforce Solutions Cabinet Secretary Bill McCamley said his office will meet with local officials and workers next week to assess needs and ways the state can help…
Energy, Minerals and Natural Resources Department Secretary Sarah Cottrell Propst said the government will work with Tri-State to help locate renewable generation facilities that replace Escalante in the affected communities, if possible, to offset some of the economic impacts there.
Apart from 107 employees at the Escalante plant, it’s unclear how many workers could lose their jobs at the nearby coal mine, which is run by Peabody Coal Co. But Robert Castillo, CEO of Continental Divide Electric Cooperative in Grants, said mine layoffs will likely double the impact…
The impact will be felt throughout the state’s northwestern region, since it comes on top of the partial shutdown of the coal-fired Four Corners Power Plant near Farmington and current efforts to completely close the nearby San Juan Generating Station, Castillo said.
“The problem is much broader, because it’s not just the Grants area,” Castillo said. “We’re talking about the whole northwest quadrant of New Mexico with the Four Corners plant, San Juan, and now Escalante. The whole area is going to be in bad shape.”
Castillo, who is also a board member of the Cibola Communities Economic Development Foundation, said local leaders want to work with state government to recruit more industry to the area. That’s critical for economic development assistance to have an impact, since retraining workers is only effective if alternative jobs are available…
Tri-State said closing Escalante will help the association meet New Mexico’s new Energy Transition Act, which requires state electric cooperatives to derive 50% of their electricity from renewable resources by 2030, and from 100% renewable and carbon-free generation by 2050.
Tri-State expects to meet the 50% renewable milestone by 2024, six years in advance of the 2030 deadline. Currently, about 30% of its electricity comes from renewables.
Rapidly declining prices for solar and wind generation will greatly offset the costs of shutting down coal operations, allowing Tri-State to maintain moderate prices – and possibly even lower its rates – for member cooperatives going forward, Highley said.
“We have new requests for proposals for additional renewable resources and the costs are coming in at such low rates that it allows us to save money even while accelerating the write-off of coal assets,” Highley said.
Tri-State will make announcements about replacement resources next week.
From The Montrose Press (Katharhynn Heidelberg):
“By year 2030, Tri-State will not operate any coal-based assets,” CEO Duane Highley said during a Thursday conference call with reporters. “These closures will have a huge impact on our employees.”
Although the Colorado closure is more gradual, giving time to to work with the Legislature for the transition, “the work starts now,” Highley also said.
He said the company is working proactively with the Legislature to make sure it meets greenhouse gas obligations, while also maintaining stable rates, transitioning resources responsibly and providing certainty for members…
Tri-State had three units at Craig. Station 1 was already shutting down, under a settlement agreement related to the state’s regional haze plan. Closure is still online for 2025.
The regional haze settlement also included the shuttering of Nucla Station on Montrose County’s West End, where closure had originally been set for completion in 2022. Tri-State, under the direction of its board, finished closures early by taking it offline in 2019.
Highley said in response to questions asked during the teleconference that Tri-State worked with affected communities and recognizes the need for support.
Craig Unit 2 had been set for closure in 2038 and Unit 3 was set for closure in 2044. The units now will close by 2030 and Colowyo will go into reclamation that year…
Highley during the teleconference said Thursday was “a solemn day,” especially for employees, whose dedication he praised.
“As we make this difficult decision, we do so with a deep appreciation for the contributions of our employees who have dedicated their talents and energy to help us deliver on our mission to our members,” Rick Gordon, chairman of Tri-State’s board of directors said, in an official announcement.
Tri-State provided wholesale power to Delta-Montrose Electric Association, which last year secured a buy-out for its power contract and is departing the Tri-State cooperative.
“That’s a move they should have taken a long time ago,” DMEA board president Bill Patterson said, adding he is not certain where Tri-State will obtain the capital to close the plants. “It really doesn’t impact DMEA that much. We made our deal. We’re working on getting the final details done,” he said.