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More Colorado coal-fired power plants could be closing, but the timing depends on some complex deals

The utility PacifiCorp hopes to retire its Colorado properties, though co-ownership with power-providers Xcel and Tri-State complicates the process

The Queen Anne dragline, with the Tri State Craig Station power plant in the background, is shown operating at the Trapper Mine in Craig, Colo., Sept. 27, 2006. (AP Photo/Denver Post, Brian Brainerd)
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A plan by PacifiCorp to retire its coal-fired power plant assets to save money and speed its transition to wind and solar sources could shutter plants in northwest Colorado. But the fate of those units will depend on negotiations with Xcel Energy, Tri-State Generation and Transmission Association and other utilities.

In its integrated resource plan unveiled Thursday, Portland, Oregon-based PacifiCorp calls for closing Craig Unit 2 in 2026 and Hayden Units 1 and 2 by 2030. Craig Unit 1 is already scheduled to close in 2025. 

In all, the plan aims to retire nearly 2,900 megawatts of coal-fired power plants in four Western states by 2030. The company serves about 1.9 million customers in California, Idaho, Oregon, Utah, Washington and Wyoming. 

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The four Colorado units’ combined 1,297 megawatts of generating capacity represents 30% of all the coal-fired capacity in Colorado, according to an analysis done by Strategen Analysis for the Sierra Club. (The analysis, done in June, estimated that eight coal-fired plants accounted for about 26% of generating capacity in Colorado.)

PacifiCorp, however, is only a fractional owner in the Hayden and Craig stations and is not the operator of either. Tri-State runs Craig and Xcel manages Hayden.

Five utilities have a share of Craig –– PacifiCorp, Tri-State, the Salt River Project, the Platte River Power Authority and Xcel. Hayden is owned by Xcel, PacifiCorp and Salt River.

PacifiCorp officials said the closure dates in the utility’s resource plan are flexible.

“The joint-owners are continually engaged,” Chad Tepley, vice president of business policy at PacifiCorp’s Rocky Mountain Power subsidiary, said during a presentation of the plan. “Discussions are ongoing.”

However, Tepley said, those talks “have not yet coalesced around a date” for closing Craig Unit 2, adding that it could be 2026 or 2028.

“There has been no decision on the early retirement of Craig Station Unit 2,” Mark Stutz, a Tri-State spokesman, said in an email.  “Any decision on an early retirement of this unit must be agreed upon by all owners.

“We will continue to work with PacifiCorp and the other owners as we plan our transition to a cleaner energy portfolio in a reliable, affordable and responsible manner,” he said.

Coal to supply the Craig units comes from the Colowyo north of Meeker, owned by Tri-State’s subsidiary Elk Ridge Mining, and the Trapper Mine, southwest of Craig, which is part owned by Tri-State. Hayden is supplied by Peabody Coal’s Twentymile mine southwest of Steamboat Springs. 

Tri-State, a wholesale power provider, closed its 100 megawatt coal-fired Nucla unit in September — more than two years before the deadline set in air-pollution lawsuit settlement. The company said it was part of an aggressive plan to transition to more renewable generation.

Tri-State Generation and Transmission Association this week said it will close the coal-fired Nucla Station as soon as its on-site fuel supply is spent, likely in early 2020. The massive power company also plans to retire a coal-fired electric generation unit at Craig Station by the end of 2025. (William Woody, Special to The Colorado Sun)

Xcel spokeswoman Michelle Aguayo said in an email that the utility has a goal of an 80% reduction in carbon emissions by 2030 and that as part of its next electric resource plan it will offer steps to reach that goal. “As of today the Hayden units have asset lives through 2030 and 2036.”

Hayden 1 became operational in 1965 and Hayden 2 in 1976. Craig Unit 1 came online in 1979, Craig 2 in 1980 and Craig 3 in 1984.

The agreements for the jointly-owned units were not clearly written about how to terminate them and close the facilities, Tepley said.

“We’ve been closing coal-fired plants pretty rapidly,” said Anna McDevitt, a Sierra Club “Beyond Coal Campaign” representative. “The plants that have closed have been the easy ones. They’ve been old and smaller.”

“Going forward this is going to be more of a problem. We’ll be looking at the Craigs and the Haydens of the world,” McDevitt said. “They are big and have complex ownership.”

MORE: Coal-fired power plants are closing early and Colorado lawmakers want to ease towns’ tough transition

The Craig 1 is being closed as part of a settlement in an air pollution lawsuit. In its resource plan, PacifiCorp said Tri-State “will be requested to administer termination, amendment or close-out of existing permits, contracts and other agreements to support retiring Craig Unit 1.”

In the case of the proposed closures for the other Craig and Hayden units it wasn’t pollution but dollars that prompted PacifiCorp’s decision.

In its analysis PacifiCorp identified the Craig and Hayden plants as among the most expensive to operate in its portfolio, with a potential $29 million savings in closing the Craig unit and $81 million in savings at Hayden.

“As Tri-State and other Colorado utilities consider how to power our communities into the future, it is clear we need to move off coal,” McDevitt said. “It is too expensive for the ratepayers in Colorado.”

There are other pressures, however. Colorado lawmakers this year passed an ambitious suite of climate goals, including one that would see the state’s greenhouse gas emissions reduced 90% from 2005 rates over the next 30 years. Power plants and transportation are the two biggest sources.

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