Colorado’s march away from coal-fired electricity generation looks to be taking a pause as Tri-State Generation and Transmission Association may follow Xcel Energy in keeping open a coal-fired unit slated to close in December.
Tri-State, which serves 15 Colorado electric cooperatives, expects an order from the U.S. Department of Energy to extend the life of its 446-megawatt Craig Unit 1, which went online in 1980.
The unit is scheduled to close at the end of the year, and the Craig Station’s two other units will close in 2028.
Tri-State operates Craig Station, which it co-owns with the Salt River Project, the Platte River Power Authority, PacifiCorp and Xcel Energy.
Xcel Energy filed a petition with the Colorado Public Utilities Commission on Nov. 10 to extend operations at its 50-year-old Comanche 2 unit in Pueblo for an additional 12 months.
That unit is slated to close at the end of this year, but a breakdown at its Comanche 3 unit, expected to last eight months, is leaving Colorado’s largest electric utility, with 1.6 million customers, potentially short on generation capacity.
The petition was supported by state regulatory staff, the Polis administration and the Colorado Office of Utility Consumer Advocate.
A conflict between federal and state priorities
The move to keep Craig Unit 1, however, may end up pitting the Trump administration against state mandates.
The administration has used emergency powers in the Federal Power Act to order two fossil-fuel power plants, one in Michigan and another in Pennsylvania, to remain open past their planned retirement dates.
Section 202(c) of the act, adopted in 1935, allows the Department of Energy to order the running of plants during war, when there is an electricity shortage or if there is a surge in demand.
“Tri-State expects that we will receive an order, before the end of the year, to keep Craig Unit 1 operational,” Mark Stutz, a Tri-State spokesperson, said in an email. “Several DOE orders under section 202(c) currently are being tested in the courts, and we are following those cases.”
The Trump administration is making a $625 million push to “reinvigorate and expand” the country’s coal industry, including $350 million for recommissioning and retrofitting old coal-fired plants.
“These funds will help keep our nation’s coal plants operating and will be vital to keeping electricity prices low and the lights on without interruption,” Energy Secretary Chris Wright said in announcing the initiative in September.
The federal push, however, runs counter to Colorado policy and a legal settlement on air pollution.
Craig Unit 1 is required to close at the end of 2025 under Colorado Air Quality Control Commission regulations to deal with regional haze and as part of a 2016 regional haze state implementation plan.
“These are the legal requirements,” Stutz said. “In the 2020 Electric Resource Plan and in the 2023 ERP approved by the Colorado Public Utilities Commission Tri-State also modeled our resource plans on the previously announced retirement date for Unit 1.”
Closing the state’s six coal-fired power plants is also part of the plan to reduce Colorado’s greenhouse gas emissions. Utilities are required to cut their carbon dioxide emissions by 80% over 2005 levels by 2030.
Who picks up the cost of operating the plant?
In addition, the unit is not needed “to keep the lights on.” In its approval of Tri-State’s ERP, the PUC said, “Craig Unit 1 is not required for reliability or resource adequacy purposes based on the record.”
“Every (electricity) portfolio that Tri-State modeled assumes that Craig Unit 1 retires at the end of 2025 and does not provide any energy or capacity after 2025,” the commission said. “At the same time, Tri-State convincingly concludes that every portfolio meets all reliability metrics and is reliable.”
Tri-State’s Stutz said the association “continues to plan to close Craig Unit 1 by the end of the year. Unit 1 will retire for economic reasons, in addition to the legal requirements.”
The added cost of keeping the three-unit Craig Station running rather than closing it on schedule would be $79 million annually, according to an analysis done by Grid Strategies for four environmental groups.
The Craig Station is supplied with coal from the nearby Colowyo Mine, but Tri-State is stopping coal production at the mine at the end of the year and on Nov. 4 filed notice with the Colorado Department of Labor and Employment that layoffs of the mine’s 133 workers will begin in January.
“A federal order based on a pretend crisis doesn’t change the fact that forcing Craig Unit 1 to stay open is a horrible idea that will cost Tri-State member cooperatives millions of dollars,” said Eric Frankowski, director of the Western Clean Energy Campaign. “Tri-State doesn’t want it to stay open and can’t afford to keep operating it.”
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