A state plan to support the economies of 11 Colorado counties where coal mines and power plants are closing anticipates a price tag of at least $100 million to help workers and their communities.
The state wants to help coal communities however it can, but the people who spent more than a year developing the strategy say lessening the impacts of the move to a cleaner energy economy would be more effective and equitable with support from the federal government.
The Office of Just Transition, created two years ago, submitted its framework to the state last week outlining the beginnings of what will likely be more than a decade’s worth of work to help coal-dependent communities avoid a devastating economic bust. The plan explicitly advocates for a national strategy, citing the interstate and even international nature of the coal industry. But it also provides 12 other ways the state is going to support the switch away from coal.
The Just Transition Action Plan’s items are based on a draft compiled by a 19-member advisory committee that has industry and community stakeholders, as well as legislators. Some of the proposed actions include:
- Bringing grant-funded programs to coal communities
- Helping coal industry workers and their families plan for potential job changes
- Creating plans for programs to help workers retrain and find new jobs
- Collaborating with utilities and mining companies to help cover the expense of transition
It has lofty goals, but the plan is also likely to change. And in the past two years, the timeline for many power plant and mine closures has accelerated under the pressure of investors and environmental legislation. On Monday, Xcel Energy announced it will close both units of its Hayden Generating Station by the end of 2028.
“We’re trying to be very careful in being honest about what we know, honest about what we don’t yet know,” said Wade Buchanan, Office of Just Transition executive director.
Six coal mines and seven coal-fired power plants still operate in Colorado. Most are slated to shut down in the next decade.
Some communities transitioning away from coal will experience greater impacts than others, depending on how significant the industry is there. The plan delineates these into Tier One and Tier Two communities.
Tier One communities include the West End of Montrose County and the Yampa Valley, including Moffat, Rio Blanco and Routt counties and the cities of Craig and Hayden. Pueblo and Morgan counties also are in this classification.
Delta, El Paso, Gunnison, La Plata and Larimer counties make up the Tier Two communities.
More than 1,900 potential “coal transition workers,” as they’re referred to in the plan, are employed by mines and power plants in these communities. A few hundred more jobs are in the related manufacturing and transportation supply chains.
Fulfilling the worker-oriented recommendations will cost upwards of $100 million, a study commissioned from the University of Massachusetts Amherst estimated.
One of the most expensive parts of the plan will be paying for retraining programs, relocation expenses and matching lost wages. Coal mine and coal-fired power plant jobs are among the highest paying in the communities that will be hardest hit by the transition away from coal. The average annual earnings for a coal worker in Colorado is around $92,000, according to the Department of Labor and Employment. By comparison, the average wage for someone in Routt County — home to the Hayden Generating Station — is $45,700.
The OJT has not yet figured out how to fund that $100 million price tag, but committee chair and Colorado AFL-CIO Executive Director Dennis Dougherty said the money will likely come from a variety of sources including energy companies, philanthropists and private investment, on top of state and federal government support.
“If there’s the political will to make this happen,” Dougherty said, “we’re going to find a way.”
The Department of Local Affairs and the Office of Economic Development and International Trade will each put $500,000 this year to grants for initiatives like supporting local business growth. Meanwhile, OJT is asking the legislature this year for a $442,920 budget, which includes 3.5 full-time equivalent workers. That’s almost triple the office’s current budget of $159,352.
“Of course you have to focus on the now, and I think every legislator is doing that,” said incoming House Majority Leader Daneya Esgar, a Pueblo Democrat and OJT advisory committee member. “But part of those conversations still have to be, the world is still going. And we know that we are still moving towards this renewable energy change. We still have to keep that front of mind.”
Some communities were bearing the cost of weaning off coal before the Office of Just Transition was created. In Montrose County, for example, the New Horizon coal mine closed in 2017 and the Nucla power plant closed in 2019, both owned by Tri-State Generation and Transmission Association. The economic hit was large.
“Nucla was a cautionary tale,” Buchanan said. “My hope is that there’s a lot more clarity on everyone’s part now.”
The community is working to rebound, and Buchanan said OJT will still collaborate with the area, but individual workers had fewer options available at the time than the office wants for future closures.
Colorado is, so far, the only state to have a dedicated office for the just-transition process, though other countries including Germany, Canada, Australia and Greece are already using similar concepts. The U.S. as a whole may join their ranks: President-elect Joe Biden’s team has reportedly looked at incorporating the National Economic Transition platform — a document compiled by unions, tribes and advocacy groups — into climate plans.
Lack of consistency between states, the Colorado plan argues, could lead to significant disparities between states and their workers, and expecting a single state to put hundreds of millions of dollars over the next decade toward the transition might not be realistic. Plus, the federal Trade Adjustment and Assistance Act Program already helps certain sectors of displaced workers, and could theoretically be amended to include energy workers.
Even with a federal program, states would still have to pay for some of the initiatives, and would likely be in charge of implementing programs.
“The more time I spend on this the more I come to believe [a national just transition plan] is the right and proper thing to do,” Buchanan said. “That’s the first, best solution.”