Colo. governor seeking CO2 cuts applauds coal plant closure

Source: By Benjamin Storrow, E&E News reporter • Posted: Sunday, January 12, 2020

Colorado Gov. Jared Polis (D) hailed a utility cooperative’s decision to close two coal plants in the next decade, saying it delivers a significant boost to the state’s climate ambitions.

Speaking to lawmakers in his annual State of the State address yesterday, Polis called Tri-State Generation and Transmission Association Inc.’s announcement “exciting news.” The Westminster, Colo.-based utility cooperative said it would close its Escalante Station this year and its Craig Station in northwest Colorado by 2030. The governor said the move would cut Tri-State’s emissions in the state by 90%.

“The truth is that due to the price reductions and technological advances, the shift toward renewable energy is happening and is being driven by the private sector that sees a profitable future in renewable energy,” Polis told lawmakers.

The governor framed the announcement as part of a wider transition toward clean energy, noting that a steel factory in Pueblo was convinced to stay in Colorado after the utility there agreed to build a large solar farm to meet the factory’s power needs.

“That is what our renewable energy future looks like,” Polis said. “It’s about innovation, about growing jobs, about growing opportunity, about saving people money and doing our part to reduce air pollution.”

Tri-State’s announcement is notable on several fronts. In New Mexico, it means two of the three remaining coal plants in the state are slated to close by 2022. San Juan Generating Station is expected to close in two years, leaving Four Corners Generating Station as the lone coal plant in the state.

The announcement is even more significant farther north. While investor-owned utilities have moved away from coal in both states, Tri-State has remained committed to its coal plants. That has led to a clamor in Colorado, where some of the cooperative’s members, environmentalists and state officials view Tri-State as an impediment to state climate goals.

Several local cooperatives that buy power from Tri-State are pushing to leave its system over its cap on local renewable generation. Polis and Tri-State executives said yesterday they were optimistic they could reach a goal to provide local cooperatives more flexibility in accessing renewables.

Colorado lawmakers, for their part, enacted a law last year giving state utility regulators the power to approve or reject the utility cooperative’s long-term resource plans. That was part of a larger package of climate legislation that also called on the state to cut its emissions 26% of 2005 levels by 2025, 50% by 2030 and 90% by 2050 (Climatewire, May 31, 2019).

In a conference call with reporters, Duane Highley, CEO of Tri-State, said the move was driven by Colorado’s climate goals and the falling cost of renewables. When the company went out to bid for new wind and renewables recently, the prices came back below the cost of operating existing coal plants.

“It is really a green energy dividend that allows for a significant transition,” Highley said.

The utility cooperative is expected to announce its plans for replacing the lost coal power next week.

Craig is one of the largest carbon dioxide emitters in Colorado. In 2015, the most recent year that state emissions data is available, total emissions from Colorado power plants were 36 million tons. Craig accounted for almost 9 million tons of CO2, according to EPA data.

Escalante is a smaller plant in New Mexico. In 2015, its emissions were 1.4 million tons. Much of its power is exported to Colorado.

Yesterday’s announcement comes after Xcel Energy Inc.’s plan to close two units at its Comanche Generating Station outside Pueblo in the coming years (Climatewire, May 7, 2018). That move is expected to cut emissions by 4 million tons annually. Together, the two power plants represent about 10% of Colorado’s emissions.

Environmentalists said the coal closures are significant but that more work needs to be done in other sectors of the economy if the state is to meet its emissions targets. State figures show Colorado’s transportation emissions have plateaued in recent years, while greenhouse gases from buildings are steadily rising.

“It’s 2020, somehow, and we have 10 years to cut our emissions in half,” said Erin Overturf, deputy director of Western Resource Advocates, a conservation group. “Thankfully we’ve made significant steps in the power sector, which we can leverage deeper and compounding reductions from other sectors.”

Other greens noted that Tri-State still boasts a significant coal fleet. The utility cooperative is part owner of the Springerville Generating Station in Arizona and Laramie River Station in Wyoming. Much of that power is exported to Colorado, they said.

“2030 is still really far away, and their member-owners are asking for Tri-State to commit to decarbonization systemwide,” said Anna McDevitt, a representative with the Sierra Club’s Beyond Coal campaign.

Tri-State officials said the announcement only covers plants that are operated by the utility cooperative. They noted the move amounts to a significant shift in Tri-State’s operations. Craig is fed by two local coal mines: Colowyo and Trapper.

Colowyo will close along with the power plant, and Trapper is likely to do so, as well, Tri-State executives said. The utility cooperative said almost 600 people would lose their jobs at Craig, Colowyo and Escalante as a result of the closure.

“This is a solemn day for us,” Highley said.

The Colorado Mining Association blamed the closures on state officials and environmentalists and said northwest Colorado would suffer as a result.

“These communities will be left holding the bag for providing essential public services and paying off community investments with radically decreased tax revenues due to the closure,” the association said in a statement.

Colorado created an energy transition office last year to help manage the decline in coal, but it has yet to hire any officials to staff the office.

In his speech yesterday, Polis said he would work with Tri-State to help expand opportunities for local renewable energy generation and ensure communities are not left behind.

“I was encouraged to see the governor talk about the Tri-State news and just transition in the same breath,” said Jessica Goad, deputy director for Conservation Colorado. “That is a good sign that this is on their radar.”