From Conservation Colorado (Garrett Garner-Wells):
New polling released today highlighted climate change as the top issue in Colorado’s upcoming presidential primary, 10 points higher than health care and 15 points higher than preventing gun violence.
The survey of likely Democratic presidential primary voters conducted by Global Strategies Group found that nearly all likely primary voters think climate change is already impacting or will impact their families (91%), view climate change as a very serious problem or a crisis (84%), and want to see their leaders take action within the next year (85%). And by a nearly three-to-one margin, likely primary voters prefer a candidate with a plan to take action on climate change starting on Day One of their term over a candidate who has not pledged to act starting on Day One (74% – 26%).
Additionally, the survey found that among likely primary voters:
85% would be more likely to support a candidate who will move the U.S. to a 100 percent clean energy economy;
95% would be more likely to support a candidate who will combat climate change by protecting and restoring forests; and,
76% would be more likely to support a candidate who will phase out extraction of oil, gas, and goal on public lands by 2030.
These responses are unsurprising given that respondents believed that a plan to move the U.S. to a 100 percent clean energy economy will have a positive impact on future generations of their family (81%), the quality of the air we breathe (93%), and the health of families like theirs (88%).
Finally, likely primary voters heard a description of Colorado’s climate action plan to reduce pollution and the state’s next steps to achieve reductions of at least 50 percent by 2030 and at least 90 percent by 2050. Based on that statement, 91% of respondents agreed that the Air Quality Control Commission should take timely action to create rules that guarantee that the state will meet its carbon reduction targets.
Here’s the release from Tri-State Corp (Lee Boughey, Mark Stutz):
Increasing renewables to 50% of energy consumed by members by 2024, adding 1 gigawatt of renewables from eight new solar and wind projects.
Reducing emissions with the closure of all coal plants operated by Tri-State, cancelling the Holcomb project in Kansas and committing not to develop additional coal facilities.
Increasing member flexibility to develop more local, self-supplied renewable energy.
Extending benefits of a clean grid across the economy through expanded electric vehicle infrastructure and beneficial electrification.
In the most transformative change in its 67-year history, Tri-State Generation and Transmission Association today announced actions of its Responsible Energy Plan, which dramatically and rapidly advance the wholesale power supply cooperative’s clean energy portfolio and programs to serve its member electric cooperatives and public power districts.
“Our cooperative and its members are aligned in our transition to clean power,” said Rick Gordon, chairman of Tri-State and director at Mountain View Electric Association in eastern Colorado. “With today’s announcement, we’re poised to become a new Tri-State; a Tri-State that will provide reliable, affordable and responsible power to our members and communities for many years to come.”
Tri-State’s clean energy transition significantly expands renewable energy generation, meaningfully reduces greenhouse gas emissions, extends the benefits of a clean grid to cooperative members, and will share more flexibility for self-generation with members, all while ensuring reliable, affordable and responsible electricity.
“We’re not just changing direction, we’re emerging as the leader of the energy transition,” said Duane Highley, Tri-State’s chief executive officer. “Membership in Tri-State will provide the best option for cooperatives seeking a clean, flexible and competitively-priced power supply, while still receiving the benefits of being a part of a financially strong, not-for-profit, full-service cooperative.”
Accelerated additions of renewable projects drive 50% renewable energy by 2024
Tri-State today announced six new renewable energy projects in Colorado and New Mexico, which along with two projects previously announced and yet to be constructed, will result in more than 1 gigawatt of additional emissions-free renewable resources being added to Tri-State’s power supply portfolio by 2024.
For the first time, four solar projects will be located on the west side of Tri-State’s system, including near Escalante Station and Colowyo Mine, which are scheduled to close by the end of 2020 and by 2030, respectively.
The eight long-term renewable energy projects of varying contract lengths to be added to Tri-State’s resource portfolio by 2024 include:
• Escalante Solar, a 200-megawatt (MW) project located in Continental Divide Electric Cooperative’s service territory in New Mexico. Tri-State has a contract with Turning Point Energy for the project. The solar project is on land near Escalante Station, which will close by the end of 2020.
• Axial Basin Solar, a 145-MW project in northwest Colorado in White River Electric Association’s service territory. Tri-State has a contract with juwi for the project. The project is located on land near the Colowyo Mine, which will close by 2030.
• Niyol Wind, a 200-MW project located in eastern Colorado in Highline Electric Association’s service territory. Tri-State has a contract with NextEra Energy Resources for the project.
• Spanish Peaks Solar, a 100-MW project, and Spanish Peaks II Solar, a 40-MW project, located in southern Colorado in San Isabel Electric Association’s service territory. Tri-State has contracts with juwi for both solar projects.
• Coyote Gulch Solar, a 120-MW project located in southwest Colorado in La Plata Electric Association’s service territory. Tri-State has a contract with juwi for the project.
• Dolores Canyon Solar, a 110-MW project located in southwest Colorado in Empire Electric Association’s service territory. Tri-State has a contract with juwi for the project.
• Crossing Trails Wind, a 104-MW project located in eastern Colorado in K.C. Electric Association’s service territory. Tri-State has a contract with EDP Renewables for the project.
The construction and operation of these projects will result in hundreds of temporary construction jobs and contribute to permanent jobs and tax base within Tri-State members’ service territories.
“By 2024, 50% of the energy consumed within our cooperative family will be renewable,” said Highley. “Accelerating our renewable procurements as technology improved and prices dropped results in the lowest possible renewable energy cost today for our members, and likely of any regional utility.”
Since 2009, Tri-State has contracted for 15 utility-scale wind and solar projects, as well as numerous small hydropower projects. By 2024, Tri-State will have more than 2,000 megawatts of renewable capacity on its 3,000-megawatt peak system, including:
800 megawatts of solar power from 9 projects (3 existing, 6 to be constructed by 2024)
671 megawatts of wind power from 6 projects (4 existing, 2 to be constructed by 2022)
600 megawatts of large and small hydropower (Including federal and numerous small projects)
Collectively, Tri-State’s renewable portfolio can power the equivalent of nearly 850,000 average homes.
Greenhouse gas emissions significantly reduced to meet Colorado, New Mexico goals
Tri-State is significantly decreasing greenhouse gas emissions to meet state laws and goals, and with the closures of all coal facilities it operates, will eliminate 100% of its greenhouse gas emissions from coal in New Mexico by the end of 2020 and in Colorado by 2030. The early closures of Escalante Station, Craig Station and Colowyo Mine were announced last Thursday, following the early retirement of Nucla Station in 2019.
By closing Craig Station, Tri-State is committed to reducing carbon emissions from units it owns or operates in Colorado by 90% by 2030, and reducing emissions from Colorado electric sales by 70% by 2030.
Tri-State also is committing to not develop additional coal facilities, and has cancelled its Holcomb coal project in southwestern Kansas. The air permit for the project will expire in March 2020.
“With the retirements of all coal facilities we operate, a commitment to not pursue coal in the future, and a significant increase in renewables, Tri-State is making a long-term and meaningful commitment to permanently reduce our greenhouse gas emissions,” said Highley.
Plan extends benefits of a clean grid and electric vehicles to rural areas
As Tri-State rapidly transitions to a clean grid, it is working with its members to extend the benefits of low-emissions electricity to replace higher-emission transportation, commercial and residential energy uses.
“By extending the benefits of a cleaner power supply to vehicles, homes, farms and businesses, we ensure that rural energy consumers save money while further reducing greenhouse gas emissions,” said Highley.
To expand rural electric vehicle charging networks, Tri-State will fund electric vehicle charging stations for each member, and will work with members to further promote electric vehicle usage. Tri-State will promote and increase its beneficial electrification, energy efficiency and demand-side management programs with its members, including support through the new Beneficial Electrification League of Colorado and other state chapters, and will study potential emissions reductions associated with beneficial electrification.
Increasing member flexibility for developing local renewable energy resources
As a cooperative, Tri-State’s members are working together to increase local renewable energy development and member self-supply of power. In November 2019, Tri-State expanded opportunities for member community solar projects up to 63 megawatts system-wide, and is finalizing recommendations for partial requirements contracts.
“Our membership has moved quickly over the past six months to advance recommendations for flexible partial requirements contracts, which will be considered by our board by April 2020 and which Tri-State will implement upon the board’s approval,” said Gordon.
Partial requirements contracts provide flexible options for members that desire to self-supply power, while ensuring other members are not financially harmed. A Contract Committee of the Tri-State membership is currently reviewing partial requirements contract options.
Center for the New Energy Economy advisory process informs plan
To develop the Responsible Energy Plan, Tri-State collaborated with a diverse advisory group, facilitated by Colorado State University’s Center for the New Energy Economy (CNEE) and former Colorado Governor Bill Ritter. This group included representatives from the states Tri-State serves including academic, agricultural, cooperative, environmental, rural and state government interests.
“These advisors rolled up their sleeves to work with us on the details that make our energy transition vision a reality,” said Highley. “We are grateful to Governor Ritter and the CNEE advisory group for their good-faith contributions and efforts to find common ground in the pursuit of ambitious but actionable commitments, and challenging but attainable goals.”
Tri-State maintains financial strength and stable rates through transition
Tri-State’s strong financial position and cooperative business model helps ensure wholesale rates remain stable, if not lower, during its transition.
“We are favorably positioned to successfully transition to clean resources at the lowest possible cost,” said Highley. “The low costs of renewable energy and operating cost reductions help to counterbalance the cost to retire coal generation early, keeping our wholesale rates stable with even cleaner electricity.”
Tri-State is a not-for-profit cooperative of 46 members, including 43 electric distribution cooperatives and public power districts in four states that together deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. For more information about Tri-State and our Responsible Energy Plan, visit http://www.tristate.coop.
Tri-State Generation and Transmission Association Inc. said by 2024 it will draw from renewable sources at least half of the energy it sends to member power cooperatives.
In a news conference also attended by Gov. Jared Polis on Wednesday, the Westminster-based power generator said it would build two wind farms and four solar farms in Colorado and New Mexico to generate an additional gigawatt of energy for its 43 member co-ops in Colorado, Nebraska, Wyoming and New Mexico.
Tri-State CEO Duane Highley said the plan puts the company at the forefront of the shift away from fossil fuels.
“Membership in Tri-State will provide the best option for cooperatives seeking a clean, flexible and competitively-priced power supply, while still receiving the benefits of being a part of a financially strong, not-for-profit, full-service cooperative,” he said at the news conference.
The partial shift away from non-renewable sources of power comes amid ongoing disputes among Tri-State, Brighton’s United Power Inc. and La Plata Energy Association Inc. at the Colorado Public Utilities Commission. The two co-ops filed suit in November, claiming Tri-State is refusing to give them permission to explore deals with other power suppliers and effectively holding them hostage while it tries to become a federally regulated entity…
Tri-State has maintained it cannot release United and La Plata while other co-op customers revise the rules for terminating contracts…
In a statement, La Plata said it supports Tri-State’s push toward renewable energy, but said the power provider’s rules are preventing it from creating its own series of renewable energy sources to meet its local carbon reduction targets.
“While Tri-State’s future goal will help meet our carbon reduction goal, we do not yet know what the costs of its plan will be to our members and what LPEA’s role will be for producing local, renewable energy into the future,” said La Plata Energy Association CEO Jessica Matlock.
Member co-ops are required to buy 95% of their power from Tri-State.
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.”
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.”
“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.”
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.
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.
“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.
Why Tri-State will shelve coal in Colorado and New Mexico and the big challenges that remain: Will Tri-State ‘family’ stay intact?
Tri-State Generation and Transmission announced [January 9, 2020] that it will close its Escalante Station coal-burning units in New Mexico in 2020 and all of its coal-burning units at the Craig Station in Colorado by 2030. One and probably two coal mines near the Craig units will be closed.
Sharply widened price disparities between aging coal plants and new renewable resources play a prominent role in the closures. So do the growing pressures of member cooperatives to decarbonize and take advantage of lower-cost and more distributed renewable resources. Yet another factor was the pressure exerted by advocacy groups, including the Sierra Club, with its extensive grassroots-organizing efforts.
New laws setting decarbonization goals in both Colorado and New Mexico figure into the closures. Legislatures in both states adopted laws last year calling for economy wide decarbonization, in Colorado’s case a 50% reduction in greenhouse gas emissions by 2030 and 95% by 2050. New Mexico’s law requires 80% electrical generation be renewable by 2040 and 100% carbon free by 2045.
Colorado Gov. Jared Polis, in his State-of-the-State address Thursday morning, said Tri-State’s plans within Colorado will reduce the utility’s greenhouse gas emissions 90% by 2030.
As of 2018, renewables—including hydropower—constituted 32% of Tri-States sales to members, while coal represented at least 47% and possibly more, depending upon the source of electricity purchased from other sources. Tri-State expects to be at 50% by 2024 and higher yet by 2030, said Duane Highley, the chief executive of Tri-State, at a Thursday tele-press conference.
The closures were not particularly surprising. Highley, who took the reins at Tri-State last April, told Colorado Public Utilities Commissioners in October to “watch our feet” while promising decarbonization by 2030.
But major questions remain for Tri-State, including perceptions of its long-term financial viability. S&P Global Ratings in November lowered ratings for Tri-State and for Moffat County, where Craig Station is located, from A to A-. Reading the news, some were reminded of another Colorado wholesale supplier, Colorado Ute. Overbuilt in coal generation, it went into a death spiral and then bankruptcy in 1991. Tri-State got the Craig units from that bankruptcy
Most prominent of Tri-State’s challenges will be to hang onto its existing members in what in the past has been described as a family. The family has been squabbling, particularly among Colorado’s 18 member cooperatives. One will soon leave, two more are negotiating to leave, and a fourth has informally asked for a buy-out number. Together, they represent 33% of Tri-State’s electrical demand.
Next Wednesday, Tri-State will announce details of what it calls its aggressive and transformative Responsible Energy Plan. The plan results from a process convened in July 2019 and overseen by former Colorado Gov. Bill Ritter’s Center for the New Energy Economy. The task force included multiple environmental groups as well as Tri-State.
The extent and location of new local resources in Tri-State’s generating portfolio may not be answered immediately, says Erin Overturf, deputy director Western Resource Advocates’ clean energy program. The group was among those who participated in development of the Responsible Energy Plan.
Some of those not at the table remain unhappy that they were not.
“From our perspective, we want Tri-State to clean up their carbon footprint, but we would like to be part of this,” said Jessica Matlock, the chief executive of Durango-based La Plata Electric, one of two co-ops that have formally asked the price of breaking their current all-requirements contracts. “We haven’t been involved in any of the discussions, the formulation of strategies. We would actually like to develop a large amount of renewable energy in the Four Corners and supply that to Tri-State. We don’t think they should just develop large-scale resources on the Eastern Slope. They should diversify their resources and look to the co-ops to be partners.”
While the Four Corners has what Matlock describes as “phenomenal” solar potential, land in the United Power service territory north and east of Denver has become too valuable for 200-megawatts solar farms, says John Parker, chief executive of the 93,000-member cooperative. He’s more interested in seeing whether Tri-State can execute its energy pivot without raising rates.
Rates of Tri-State going forward matter entirely to United, says Parker, whose co-operative now is responsible for 19% of Tri-State’s total electrical demand. He said United charges 20% more for residential electricity than does Xcel Energy, a neighboring and sometimes competing utility. United has somewhat higher costs for distribution of electricity to customers owing to the more rural nature of its service territory But Tri-State’s wholesale cost to United provides the larger explanation. “Tri-State is 75% of our cost of doing business,” says Parker.
But will new transmission be needed to access new renewable supplies, as Tri-State representatives have indicated previously? If so, that could cause rates to rise further, Parker fears.
“I think the biggest question that we have as far as this announcement is how are they going to pay for it,” says Kathleen Staks, director of external affairs for Guzman Energy.
Highley, in the teleconference, repeatedly said that rates will remain stable and might even decline even as Tri-State accelerates deprecation on its plants in the two states. Asked specifically if his guarantees of stable rates also applies to the cost of new generation, he replied that yes, it does. The costs of renewable generation are just that good.
Guzman Energy financed the exit of Kit Carson Electric Cooperative in 2016 from its all-requirements contract, which had been set to expire in 2040. It was the first Tri-State member to leave, a dispute that began in 2005 when Tri-State first asked members for contract extensions in order to build another coal plant, this one in Kansas. Guzman has since helped the cooperative based in Taos N.M., to build its solar potential. Luis Reyes, Kit Carson’s chief executive, says that Kit Carson will to be able to meet its peak day-time demand from locally generated solar resources by 2021. Kit Carson, says Matlock, provides La Plata the blueprint for what it hopes to achieve.
In closing the plants early, Tri-State will accelerate their financial depreciation. Value of the two generating stations at Craig at $400 million. Their original end-of-life dates were 2038 and 2044. The depreciation of those units is being accelerated to 2030. Highley suggested that retirement of one of those units, Craig Unit 2, which is co-owned with four other utility partners, could happen earlier.
Tri-State owns the 253-megawatt Escalante Generating Station without partners and values it at $270 million. Its original end of life had been put at 2045.
Still standing will be the two major generating stations in which it has a minority interest. It has 464 megawatts of the total 1,710 megawatts of capacity at Laramie River Station near Wheatland, Wyo., and 419 megawatts of the 1,629 megawatts at Springerville, in eastern Arizona. As for the future of those plants, said Highley, look at what happens legislatively in Arizona and Wyoming.
Evidence had been mounting that Tri-State, despite several relatively small additions of renewable, was being bypassed by the energy transition. The first evidence came in late 2017, after Xcel Energy had announced plans to retire Comanche 1 and 2, two aging coal-burning units at Pueblo, Colo. The bids it had received by that December for wind, solar and even storage shocked most energy analysts, drawing national attention. Conveniently, most of that new generation approved by the Colorado PUC will be located relatively close to existing transmission.
Then, in August 2018, the Rocky Mountain Institute released a report, “A Low-Cost Energy Future for Western Cooperatives,” which examined the Tri-State fleet in terms of risks, including a carbon price and load defection. That analysis concluded only the Laramie River Station in Wyoming made sense economically going forward. Key to the lower-cost of the Wyoming plant is the relative proximity to the Powder River Basin, lowering transportation costs, and a low-price contract continuing into the 2030s.
Since that 2018 study, says Mark Dyson, a co-author, prices of renewables have continued to dive. He cites one example of a project approved late last year that will deliver solar plus storage at a price of around $25 a megawatt. In some cases, he said, that’s lower the cost of coal itself delivered to a plant. And solar itself now is commonly in the lower $20s per megawatt-hour, a price unheard of even two years ago.
Tri-State in 2019 rebuffed an offer from Guzman to buy three Tri-State units (two at Craig, one at Escalante) and shut them down, replacing the 800 megawatts of lost generating capacity with wind, solar and natural gas generation.
“We would finance the early shutdown of these coal plants, giving Tri-State a substantial cash infusion, in the vicinity of a half-billion dollars, and we would replace the portfolio (that would be lost) with in excess of 70% renewables,” said Chris Riley, president of Guzman Energy, in an interview for Energy News Network. The offer included purchase of the Colowyo Mine.
Guzman said it would also cover the costs of dismantling the three units as well as remediation costs, which are expected to be substantial. The remediation, however, would be subject to negotiation, Riley said. In addition, Guzman offers to assist communities that would be affected by early retirement of the coal units. At least part of Guzman’s sources of funding were foundations.
In its announcement, Tri-State pledged $5 million in local community support in New Mexico to the affected communities, including Grants and Gallup.
It made no similar offer for the Craig community. And, some observers have noted, Tri-State has made little outreach to the affected communities under Highley. However, he said he planned to meet with community members next week. The Craig Daly Press reports that the news hit the Yampa Valley hard.
Highley also promised to continue work Gov. Jared Polis and legislative leaders in terms of the transition but did not say exactly what Tri-State is seeking with legislators. Colorado legislators last session created a Just Transition office, but the agency still lacks an executive director and also funding. Meetings of the advisory committee, which consists of state officials and legislators and local representatives, were held in October and December.
Ultimately 600 Tri-State employees directly involved in the extraction or burning of coal will be directly impacted along with 100 employees who are not directly involved in mining or combustion. It will, said Highley, “result in a significant downsizing of our company.”
However, Tri-State now expects to expand markets to accommodate the application of energy to other uses, including transportation and home heating, a concept called beneficial electrification. Just what it has in mind there will become more clear next week.
This expansion could partially offset loss of members. Delta-Montrose Electric, which represents 4% of Tri-State’s load, will leave Tri-State in May and will instead be supplied by Guzman Energy. Poudre Valley REA, the second-largest member cooperative in terms of demand, at 8%, informally asked for a buy-out number in 2018 but, unlike United and La Plata, has taken no additional action. Directors adopted a goal of 80% carbon-free electricity by 2030.
Both United and La Plata are skirmishing legally with Tri-State at both the Colorado Public Utilities Commission and at the Federal Energy Regulatory Commission. They have asked the Colorado PUC to determine a fair and just exit fee.
Tri-State’s response to the complaints is an offer to provide a partial-requirements contract, one that allows greater ability of local co-ops to generate their own resources. At the press conference, Highley said he is confident that the committee tasked with the details will deliver an acceptable product by April. But patience is publicly wearing thin at United Power. “We’ve spent 18 months trying to change this contract, and all that we have gotten from Tri-State is delays, evasions and excuses,” Parker said in press release issued last week.
The other big story of the decade was the environment. As the drought steadily worsened in the early teens, President Ben Shelly found himself between a rock and a hard place. A proposed settlement of the water rights on the Little Colorado River, which would have included the Nation sacrificing a portion of its water rights in exchange for infrastructure, proved so wildly unpopular that he was forced to back down, leaving the Nation to take its chances in court.
A plan to round up Dinétah’s feral horses, which ranchers accused of drinking up and fouling the ever-scarcer watering holes, stirred an international uproar from humane organizations and even actor Robert Redford. It was eventually abandoned and the animals remain a problem, now numbering in the tens of thousands with few natural predators.
Water issues continued in 2015 as an estimated several hundred Navajos — including President Jonathan Nez and Vice President Myron Lizer — joined the Standing Rock Sioux Tribe in protesting the construction of an oil pipeline beneath the tribe’s main water source, braving sub-zero temperatures, tear gas and rubber bullets.
In the summer of that year, the Diné had their own water issue to contend with, watching in amazement as the Animas River ran orange with dissolved metal compounds from an abandoned gold mine near Silverton, Colorado — the result of a botched containment effort by the US. Environmental Protection Agency.
The Navajo Nation joined the states of New Mexico and Utah in suing the agency and its contractor. As of this writing the litigation is still pending.
Then there was Bears Ears National Monument, created by President Barack Obama on Dec. 28, 2016, and reduced by 85 percent by President Donald Trump less than a year later. That’s also slogging through the courts.
But by far the biggest environmental story was the rapid dethronement of King Coal, which for decades had propped up state, local, and tribal economies in the Four Corners.
As prices for natural gas and renewable energy declined, power plant owners beat a hasty retreat from the dirty fossil fuel that had sustained generations of Navajo miners and a good chunk of the Navajo and Hopi tribes’ budgets.
In 2013, the Navajo Nation managed to stave off the closure of BHP Billiton’s Navajo Mine by creating a company to buy it, but there was no stopping the demise of the Navajo Generating Station and the two mines on Black Mesa that fed it.
Environmentalists had for years been pressuring the tribal government to create a plan to replace the revenue that would be lost when the plant closed, preferably by converting it to a sustainable energy producer, but as the last coal shovelful of coal was turned this past November, the only plan was to dig into the Permanent Trust Fund former President Peterson Zah had created in 1985 for just this eventuality.
Meanwhile the Navajo Transitional Energy Company, the tribal enterprise created to buy the Navajo Mine and then lead the Nation into a more sustainable energy future, purchased three more coal mines in Wyoming and Montana — a move that shocked not only environmentalists but the president and Council.
The San Juan Generating Station in Waterflow, New Mexico, is next on the chopping block, slated to close in 2022 unless the state’s Public Regulation Commission approves a plan to convert it to a carbon capture facility.
We’re reporters of the news, not prognosticators. But it’s not too risky to predict that all these environmental issues will extend into 2020 and most likely beyond, joined by ones no one has even thought of yet as irreversible climate change takes hold.
Driving down Highway 133 from the craggy wilds of the West Elk Mountains in central Colorado, one of the first signs of civilization is a mile-long coal train on a siding, along with the rusting steel framework of a canyon-spanning loading station that still dumps the black rock into trains at the rate of 50 cars per hour.
This nearly relict fossil fuel infrastructure is an improbable gateway to the orchards and vineyards of North Fork Valley. The few miles between the mine and Paonia mark a transition from the fossil fuel era into an uncertain post-carbon age, defined by climate change.
In Paonia, the air around Big B’s fruit stand is scented sweet-sour from the harvest of ripe apples. There are four types of cider on tap and nearly all the food on the menu is grown within a few miles of the local gathering spot.
The Mountain Harvest Festival is underway, and the place is buzzing, as community catalyzer Pete Kolbenschlag starts explaining how Paonia is building a sustainable future.
This community once relied heavily on coal mining jobs. Now it is developing a path toward a sustainable local economy based partly on organic agriculture and local renewable energy. It also must find ways to navigate challenges like global warming—and the growing threat of new fossil fuel development.
About eight years ago, the federal government proposed major oil and gas drilling in the North Fork Valley, and the plan roared to life this past summer, just as the organic food industry was really starting to take off. New drilling would take up land and threaten to bring more air pollution and potentially groundwater contamination that could put organic crops in jeopardy, while also contributing to climate change.
That’s not a mix that can work, said Kolbenschlag, who’s been working on community sustainability in the North Fork Valley for 20 years.
Many proposed drilling areas are right next to organic farms or ranches, and even directly on top of community drinking water springs, according to the Western Environmental Law Center, which is supporting the community’s legal challenges to fracking. Leaks from drilling could threaten local and regional water supplies. Industrial emissions and dust from increased traffic could taint fruits and vegetables, and energy infrastructure could harm wildlife habitat and diminish the area’s tourism appeal, along with the direct climate-harming impacts of more fossil fuel development.
“Leases were proposed in a ring around my house for 2 miles in every direction,” Kolbenschlag said. “We were able to stop that lease sale twice because the underlying land plan was outdated. There’s millions of dollars of agriculture on the line, even in a small area like this.”