Colorado Springs keeping the coal-burning Ray D. Nixon power plant open beyond the planned closing date of 2029 could be the costliest option for consumers while undermining the state’s air pollution cleanup, a new Sierra Club-commissioned study says.
With Colorado Springs Utilities considering an unproven small nuclear reactor, natural gas or a coal extension for Nixon’s coal-burning, 207MW Unit 1, consumers and policymakers should know it would be a bad economic and health reversal, the analysis says.
“The study finds that replacing Nixon with a nuclear small modular reactor plant is the most expensive option, by far — nearly double the cost of some other options,” says the study, conducted for Colorado’s Sierra Club by the Applied Economics Clinic, a nonprofit research group that analyzes emissions and climate issues for advocates of environmental justice. “Burning coal at Nixon for the long run is the second-most expensive option.”
“Renewable wind, solar, and storage is available today, is far cheaper, and would avoid another decade of pollution from the coal plant,” said Sarah Tresedder, senior climate and energy organizer with Colorado Sierra Club. The nonprofit environmental advocacy group credits other Colorado utilities, such as Xcel Energy and the co-op United Power, with pursuing clean, renewable energy projects while cost-saving development credits are still available.
“CSU should take the smart way forward and take advantage of federal tax credits for wind and solar before they expire,” Tresedder said, in a release accompanying an online news conference with the study’s authors. “And at a time when affordability is so critical for our communities, a delay will only saddle families and businesses with unnecessarily higher costs.”
Colorado Springs Utilities, part of the city’s government, committed as early as 2020 to shut down the coal unit at Nixon, in Fountain, by the end of 2029. That proposed closing date hasn’t officially changed, and Colorado air quality and energy officials are counting on the closures of Nixon and all other coal-fired plants by 2030 to meet strict greenhouse gas emission cuts the state set for the power industry. Those commitments aim at an 80% reduction in carbon emissions from the power sector by 2030, and many units around the state have already closed.
Growing demand and unexpectedly high costs for proposed renewable energy replacements, a spokesperson said, among other issues, have forced a reckoning for Colorado Springs.
“We do acknowledge that moving forward with the 2029 date poses reliability challenges, and we are in discussions with the state on how best to address these challenges,” CSU spokesperson Danielle Nieves said, in an email response to questions. “While renewables and battery storage are part of our strategy, they cannot fully replace baseload generation without creating reliability risks for our customers.”
Nieves said looking at all options includes CSU studying the potential of the modular nuclear reactors, which are now being explored more seriously by private investors and utilities around the country. (Denver International Airport recently announced a study of a modular nuclear reactor to power its needs, but quickly backtracked after fierce opposition and ridicule from city council members and environmental groups.)
Key next steps for CSU, Nieves said, are joining the Southwest Power Pool Regional Transmission Organization in April, which will give the utility access to lower-priced renewable energy generators than projected costs for acquiring renewable power on its own.
CSU closed its other coal plant, Martin Drake in downtown Colorado Springs, in 2021, and replaced some of its power onsite with a small natural gas generator. CSU’s current power mix includes significant natural gas, coal at Nixon 1, solar, wind, battery storage and some hydropower. The largest generators include 460MW of natural gas at Front Range Power Plant, 175MW at the Pike Solar Array, 60MW of wind from northeastern Colorado, and 100MW of lithium-ion battery storage of renewable sources for peak demand times. Among other renewable projects, the utility is planning an additional 100MW of battery storage.
Later in 2026, CSU will file an updated Sustainable Energy Plan that balances reliability, affordability and emissions goals, she said. However, “these efforts will not result in solutions before 2030, and we need more time and flexibility from the state of Colorado,” she said.
Thus the discussion keeps coming back to extending coal burning at Nixon.
The Sierra Club-commissioned study looked at the long-term economics of several possible paths for Colorado Springs Utilities and the one of three Nixon units that currently burns coal.
- Continuing coal burning at Nixon Unit 1 through 2049, with costs for new emission controls. This scenario analyzed by the nonprofit would also include some wind and solar by 2035, to replace energy lost from an added carbon capture and storage system.
- Converting the Nixon coal unit to burn natural gas by the beginning of 2030, while building or buying into development of 120 MW of wind and 160 MW of solar production.
- A full “clean” replacement of Nixon’s coal unit by the end of 2029, through acquiring 120 MW of wind, 260 MW of solar, and 120 MW of four-hour battery storage.
- Retiring Nixon’s coal unit by the end of 2034, and replacing it with a nuclear small modular reactor by Jan. 1, 2035. The study scenarios say that would produce more power than the coal unit because of nuclear’s higher projected power capacity.
Keeping coal until 2034 and then replacing it with an unproven small nuclear reactor “is the most expensive option by far under all cost measures and scenarios; it is up to double the cost of some alternatives,” the Sierra Club study concludes. A future nuclear module is the most expensive long-term option for CSU even if “wind and solar are no longer eligible for federal tax credits.”
While long-term costs can vary depending on which technology is best to handle peak summer or peak winter energy demands, “the cheapest option is either replacing the coal unit with a portfolio of wind, solar and battery storage by 2030, or converting the unit to natural gas and adding wind and solar by 2030. Keeping coal through 2049 “is not the cheapest option under any cost metric,” the study says.
CSU’s Nieves said the utility reviewed the study, and thinks “their analysis does not appear to account for weather variability, growing customer demand, high-load users such as data centers, regional transmission organization requirements for seasonal capacity levels, or reliability modeling.”
Bids for renewable projects that Colorado Springs Utilities found to be surprisingly expensive “ included federal tax credits,” Nieves said. “ Our biggest challenge is that we lack the transmission network to access many of the most financially attractive projects.”
CSU is listening to the outside perspectives while it works on plans, Nieves said. “Our priority is finding solutions that consider all factors.”