Colorado officials abruptly withdrew a proposal to lease state public land near Rangely for a Utah power company’s 50 megawatt gas-fired electric plant after environmental groups’ and media questions about why the Polis administration would support new energy generated by fossil fuels.
The 30-year land lease at $10,000 a year to Utah’s Deseret Power co-op was recommended by staff at the Colorado State Land Board, which is appointed by Polis and organized under the Department of Natural Resources. The only other financial term mentioned is a 3% annual increase to the payment.
Deseret Power serves about 2,300 northwestern Colorado customers from its current power supplies across the border in Utah. The co-op did not return messages seeking comment on the Rangely project.
The land board pulled a vote for approving the staff recommendation of the Rangely lease from the agenda for its monthly board meeting Wednesday and Thursday, to give the agency time to “thoughtfully consider the handful of public comments we recently received,” land board spokeswoman Kristin Kemp said.
The board declined a request for an interview that could explain how the detailed, six-page recommendation was developed and then scrapped at the last minute.
“We don’t yet know if or when this topic will be placed on a future agenda,” Kemp said.
The Land Board is meant to steward and generate income from millions of acres of land given to Colorado by federal agencies since statehood in 1876. The board controls 2.8 million surface acres and 4 million acres of underground mineral rights. Most of the proceeds go to support Colorado public schools.
Land Board projects are often sought to support local economic development efforts, especially in areas like Rangely that are challenged by decline in the fossil fuels industries or agricultural income.
The land board staff was asking board members to approve a long-term lease for 5 acres on the edge of Rangely already served by transmission lines. The state said it acquired the parcel “through a trade with the U.S. Department of Interior in 1983.”
Deseret Power overwhelmingly uses coal to generate electricity, and the EPA says Deseret Power and other northeastern Utah generators already contribute pollution drifting to Colorado in violation of the federal agency’s “good neighbor” clean air policy. Those fossil fuel emissions add to the Front Range chemical stew that breaks the EPA’s limits for lung-choking ozone. The Utah plants also contribute to “regional haze” that is subject to another set of EPA rules for clearing the smog from vulnerable wild areas like Rocky Mountain National Park, environmental groups point out.
Deseret Power proposed the gas-fired plant to the land board as a peak-demand fill-in power source, to support the use of renewable energy resources by providing reliable power when weather or available daylight are not producing wind and solar power in afternoon and evening hours.
Staff at the land board recommended the board approve the project, saying the 50 megawatt power plant would “contribute to the accomplishment” of the board’s goal of moving Colorado’s electric grid to 100% renewable resources by 2040. The lease for the gas-fired plant would extend through 2053.
Some of the protesting comments came from Western environmental groups that were outraged Colorado officials would consider leasing public land to a gas-fired plant that would contribute to greenhouse gas emissions causing climate change as well as Front Range ozone problems.
“I’m just wondering, has anyone told the state land board that gas plants are not in fact a form of renewable energy?” said Anna McDevitt, southwest deputy director of the Sierra Club’s Beyond Coal Campaign. “Why is a Utah-based utility trying to build a gas plant in another state? It feels like another place where Utah’s fossil fuel problem is going to make it harder to clean up Colorado’s air and meet the current climate goals.”
Other criticism comes on the economic front.
The Rocky Mountain Institute in 2019 studied plans for $70 billion in new natural gas-fired power plants and $30 billion in gas pipelines through 2025. The RMI research showed the declining cost of wind, solar and power storage technologies will soon eclipse the economic viability of gas-fired power.
“If those plants are built anyway, they would become uneconomic to continue operating in 2035,” reads the RMI report. “Continued investments in these power plants will present stranded cost risk for customers, shareholders, and society, while locking in 100 million tons of CO2 emissions each year.”
An environment and consumer coalition will in fact rally Wednesday at the Capitol for “Ratepayer Relief,” arguing that steep natural gas bill hikes this winter are more evidence that expanding natural gas use hurts Colorado residents in their checkbooks and in the air.
Other environmental groups have criticized the land board and recent Democratic administrations in Colorado for helping to give royalty breaks to mining companies extracting coal from state and federal public lands.
All six coal mines operating in Colorado in 2020 won cuts to the royalties they paid to the federal or state government, denying treasuries millions of dollars and seeming to contradict policy claims by President Joe Biden, Polis and previous Colorado governors that they are aming to curb coal’s intense pollution.
Those royalty cuts extended to Deseret Power’s coal mine northeast of Rangely, the Deserado mine. The Rio Blanco mine is part of Deseret Power Electric Cooperative, which sends the coal to the co-op’s main Bonanza power generation station near Vernal, Utah. Federal officials in 2021 approved another two-year extension of Deserado’s royalty rate reduction on coal extracted from federal land.
Environmental groups including WildEarth Guardians have sought early closure of the Bonanza plant, calling it a major polluter of the Uintah and Ouray Indian Reservation in northeastern Utah and surrounding areas in Wyoming, Nevada and Colorado.
The Polis administration declined opportunities from federal authorities to object to proposed royalty cuts on federal land in Colorado. And in 2017, under then-Gov. John Hickenlooper, the state Land Board approved a multimillion-dollar royalty rate reduction for Peabody Energy’s mine in Routt County. That decision was attacked for coming soon after Peabody executives awarded themselves $12 million in bonuses for emerging from bankruptcy.
The Deserado coal mine just outside Rangely employs 178 workers and produces about 1.5 million tons of coal a year for Deseret Power’s Bonanza plant. But northwest Colorado’s dependence on fossil fuels is waning. Coal units in Craig and Hayden are closing in coming years, ending hundreds of jobs, along with jobs at the coal mines that supply them.
Rangely, a community of just over 2,000, was among the first to receive funding from the Colorado Office of Just Transition, meant to support economies moving away from coal and other legacy industries. Rangely has used funds from the office to improve access and recreation on the White River in town.
And the state’s Rural Opportunity Office is working with a public-private partnership renewable energy project that has received $5 million in federal funding to install solar panels on three town facilities.
Tuesday evening 18 Colorado environmental groups sent the Colorado State Land Board commissioner a letter critical of the “fossil-fuels, greenhouse gas-polluting power plant.” The letter noted other cleaner solutions for energy during peak demand, like battery storage.
“State land leases should assist in the transition beyond fossil fuel, not lock the state into more climate pollution,” reads the letter from the Center for Biological Diversity, the San Juan Citizens Alliance, High Country Conservation Advocates and 15 other groups.
The environmental advocates who objected to the land board’s Rangely lease for Deseret Power want Utah to work as hard as Colorado has to pursue true renewable energy projects.
Utah’s economy remains heavily dependent on fossil fuel extraction and fossil fuel power generation plants. Deseret Power, for example, uses coal to generate nearly all the electricity at the 530 megawatt Bonanza station. It broke ground last fall on a 12 megawatt solar farm.
Elsewhere in northeastern Utah, the coal-fired Hunter and Huntington plants owned by Rocky Mountain Power are also targets of EPA “good neighbor” rules aimed at stopping the drift of ozone-causing pollutants into Colorado. The agency has previously used the rules to cut the drift of power plant emissions among Eastern states, but has recently extended the concept to Western states. States like Utah that fall under the program must add new filtering equipment to coal plants or plan for transitions to renewable energy sources, among other changes.
The EPA rejected Utah’s State Implementation Plan for cutting ozone in February. Utah filed suit the same month to block the EPA’s bad neighbor declaration. In voting to fund the state’s lawsuit against the EPA lawsuit, Utah lawmakers argued the ruling would force closures of vital power plants, though environmental groups say effective control equipment can greatly reduce the pollutants.
The EPA’s proposed restrictions on Utah, which the agency said were to take effect in mid-March, are part of a sweeping effort to declare “good neighbor” sanctions for 26 states under the Clean Air Act. The EPA reduced the ceiling on cities’ ozone allowances in 2015 to 70 parts per billion, with some scientists arguing the limits should be far lower than that to adequately protect human health.
An EPA fact sheet accompanying the good neighbor proposal says it will cut ozone-contributing nitrogen oxide by 29% from power generation across those states, saving lives, reducing asthma and preventing other respiratory illnesses. By 2026, the EPA says, the rules would eliminate up to 1,000 premature deaths, 2,400 hospital and emergency room visits and 1.3 million cases of asthma symptoms.
The EPA’s justification for the new good neighbor rulings, published in the Federal Register, says the agency’s monitoring methods show Utah contributing more than the 1% threshold of regulated substances to other states. “Its highest-level contribution is 1.29 parts per billion to Douglas County, Colorado,” the EPA said.
“If a Utah-based utility wants to build new energy products in Colorado, they need to be pollution-free projects like wind, solar and batteries,” the Sierra Club’s McDevitt said. “Coloradans don’t want more dirty gas plants in our state, especially at a time when we’re working really hard to reduce pollution from fossil fuels.
Colorado’s electricity generators are well on the path to closing all coal-fired power plants in the state in the next few years, and reducing greenhouse gas emissions from power generation by 80%. The utilities say they will retain some natural gas-generating power plants as fill-in supply when wind, solar and other renewables can’t meet demand. Colorado has 33 power plants fueled by natural gas and many of those are peaker plants, providing electricity when renewable sources wane.
The Land Board’s scheduled discussion of the Rangely lease to Deseret Power didn’t appear to include any analysis of how a new gas-fired plant would impact Colorado’s greenhouse gas reduction targets. Nor was there any mention of potential environmental justice questions, which many Colorado agencies are required to consider to assess for possible disproportionate impacts on low-income and minority communities.
Colorado Sun staff writer Jason Blevins contributed to this report.