Colorado's top energy stories in 2020

Story/photos by Allen Best

In 2020, the raft of bills passed by Colorado legislators in 2019 began altering the state’s energy story. Too, there was covid. There was also the continued movement of forces unleashed in years and even decades past, the eclipsing of coal, in particular, with renewables. Some Colorado highlights:

1) Identifying the path for Colorado’s decarbonization

Colorado in 2019 adopted a goal of decarbonizing its economy 50% by 2030 (and 90% by 2050).

The decarbonization targets align with cuts in greenhouse gas emissions that climate scientists warn must occur to reduce risk of the most dangerous climatic disruptions.

In September 2020, the Colorado Air Quality Control Division released its draft roadmap of what Colorado must do to achieve its targets. The key strategy going forward is to switch electrical production from coal and gas to renewables, then switch other sectors that currently rely on fossil fuels to electricity produced by renew able generation. But within that broad strategy there are dozens of sub-strategies that touch on virtually every sector of Colorado’s economy.

A core structure to the strategy is to persuade operators of coal-fired power plants to shut down the plants by 2030, which nearly all have agreed to do. It’s an easy argument to make, given the shifted economics. The harder work is to shift electrical use into current sectors where fossil fuels dominate, especially transportation and buildings.

It’s a lot—but enough? By February, environmental groups were fretting that the Polis administration was moving too slowly. During summer months, several members of the Air Quality Control Commission, the key agency given authority and responsibility to make this decarbonization happen, probed both the pace and agenda of the Polis administration.

This is from the Jan. 5, 2021, issue of Big Pivots, an e-magazine tracking the energy transition in Colorado and beyond. Subscribe at bigpivots.com

John Putnam, the environmental programs director in the Colorado Department of Health and Environment, and the team assembled to create the roadmap have defended the pacing and the structural soundness, given funding limitations.

Days before Christmas, the Environmental Defense Fund filed a petition with the Air Quality Control Commission. The 85-page document calls for sector-specific and legally binding limits on greenhouse gas emissions. It’s called a backstop. The proposal calls for a cap-and-trade system of governance, similar to what California created to rein in emissions. New England states also have used cap-and-trade to govern emissions from electrical generation. In this case, though, the emission limits would apply to all sectors. EDF’s submittal builds on an earlier proposal from Western Resource Advocates.

“The state is still far from having a policy framework in place capable of cutting greenhouse gas emissions at the pace and scale required—and Colorado’s first emissions target is right around the corner in 2025,” said one EDF blog post.

This proposal from EDF is bold. Whether it is politically practical even in a state that strongly embraces climate goals is the big question, along with whether it is needed. All this will likely get aired out at the Air Quality Control Commission meeting on Feb. 18-19.

The Martin Drake coal plant in downtown Colorado Springs will be closed by 2023 and 7 gas-fired generators moved in to generate power until 2030.

2) Coal on its last legs as more utilities announce closures

It was a tough year for coal—and it’s unlikely to get better. Tri-State Generation and Transmission and Colorado Springs Utilities both announced they’d close their last coal plants by 2030. Xcel Energy and Platte River Power Authority had announced plans in 2018.

That will leave just a handful of coal plants operated by Xcel Energy puffing, but who knows what state regulators will rule or what Xcel will announce in 2021. It has a March 31 deadline to submit its next 4-year electric resource plan.

Meanwhile, Peabody, operator of the Twentymile Mine near Steamboat Springs, furloughed half its employees in May, partly because of covid, and in November announced it was considering filing for bankruptcy. If so, it will be the second time in five years.

It was an image from Arizona, though, that was iconic. The image published in December by the Arizona Republic, a newspaper, showed three 750-foot stacks at the Navajo Generating Station at Paige beginning to topple.

3) How and how fast the phase-out of natural gas?

Cities in California and elsewhere have adopted bans on new natural gas infrastructure in most buildings. Several states have adopted bans against local bans. Colorado in 2020 got a truce until 2022.

But the discussion has begun with a go-slow position paper by Xcel Energy and heated arguments from environmental hard-hitter Rocky Mountain Institute. It’s insane to build 40,000 new homes a year in Colorado with expensive natural gas infrastructure even as Colorado attempts to decarbonize its economy, Eric Blank, appointed by Polis in December to chair the PUC, told Big Pivots last summer. The PUC held an information hearing in November on natural gas.

State Sen. Chris Hansen, a Denver Democrat, sponsored a bill that would have created a renewable natural gas standard, to provide incentives to dairies and others to harness their methane emissions. The bill got shelved in the covid-abbreviated legislative session. Expect to see it in 2021.

But even without the incentive, Boulder in July completed a biogas conversion project at its sewage treatment plant. It was the fourth such project in Colorado in the last several years.

Adding a hard edge to the natural gas story was the sabotage to the Black Hills natural gas distribution system just after Christmas, causing 3,500 properties to lose their heat. An “Earth first” tag was left at one of the three sites of sabotage suggested a political statement.

Rich Meisinger Jr., business manager for the International Brotherhood of Electrical Workers, explains an aspect of the coal economy to Gov. Jared Polis in March.

4) Colorado begins effort to define a Just Transition

Colorado Gov. Jared Polis spent the first Friday in March in Craig and Hayden, two coal towns in northwest Colorado. Legislators in 2019 created an Office of Just Transition. The goal is to help communities and workers in the coal sector affected by the need to pivot to cleaner fuels create a glide path to a new future. No other state has the same legislative level of ambition.

There are many places in Colorado where the impacts of this transition will be felt, but perhaps no place quite as dramatically as in the Yampa River Valley of northwest Colorado.

Polis and members of the Just Transition team created by legislators spent the afternoon in the Hayden Town Hall, hearing from disgruntled coal miners, union representatives, and local elected and economic development officials. That very afternoon, the first covid case in Colorado was reported.

Legislators funded only an office and one employee. That remains the case. Some money will have to be delivered in coming years to assist workers and, to a lesser degree, the impacted communities. As required by law, a final report to legislators was posted in late December.

Legislators will have to decide whether the task force got it right and, if so, where the money will come from to assist workers and communities in coming years.

Meanwhile, in Craig, and elsewhere, the thinking has begun in earnest about the possibilities for diversification and reinvention. But it will be tough, tough, tough to replace the property tax revenues of coal plants in the Hayden, Craig, and Brush school districts.

For more depth, see the first and second stories I published on this (via Energy News Network) in August.

5) Will the West’s newest coal plant make it to 20 years?

Comanche 3 began operation in 2010, and it remains the newest (and likely last) coal-burning unit in not only Colorado but all Western states.

It’s been a lemon. In 2020 the Colorado Public Utilities Commission decided to order a deep dive into why Xcel Energy, the primary owner, was forced to spend so much money on this plant. Those costs get passed along to customers. The commission first broached the subject in May and then made the decision formal in October.

The question driving the upcoming investigation is whether Xcel customers, who represent 53% of electrical demand in Colorado, would be better served by shuttering this coal plant well ahead of its originally scheduled 2060-2070 closing.

Work got underway in October 2020 for a massive solar farm that will satisfy nearly all the power requirements of the Evraz steel mill.

6) Work begins on giant solar farm that will power steel mill

In October, site preparation work began on the periphery of Pueblo on 1,500 acres of land owned by Evraz, the steel mill, for a giant 240-megawatt solar farm. Keep in mind that nearby Comanche 3 has a generating capacity of 750 megawatts. Commercial operations will begin at the end of 2021.

Evraz worked with Xcel Energy and Lightsource BP to make the giant solar installation happen. The company expects the solar power to provide nearly all of its needs. See artist depiction on page 15. See August story.

7) A new framework for oil and gas and operations

Colorado’s revamped oversight of oil and gas drilling and processing continued with a new legislatively-delegated mission for the Colorado Oil and Gas Conservation Commission: protecting public safety, health, welfare, and the environment. The old mission: fostering development.

Guiding this is a new 5-member commission, only one of whom can be from the industry. The 2019 law also specified shared authority over oil and gas regulation with water and other commissions to also have say-so. And local governments can adopt more restrictive regulations.

The specifics of this came into sharp focus in November with 574 pages of new rules adopted after 10 months of proceedings, including what both industry and environmental groups called cooperative and collaborative discussions.

The new rules simplify the bureaucratic process for drilling operators, require that drilling operations stay at least four blocks (i.e. 2,000 feet) from homes; old regulations required only a block. The new rules also end the routine venting of natural gas.

The new rules likely won’t end all objections but the level of friction may drop because of the rules about where, when, and how.

Both idle fleet pickup trucks and drilling rigs were abundant in Weld County in June.

8) Covid clobbers the drilling rigs and idles the pickups

Oil prices dove from near $60 a barrel in January to $15.71 in May. All but 7 drilling rigs in Colorado’s Wattenberg Field had folded by then, compared to 31 working a year before. Covid-dampened travel had slackened demand, and supply was glutted by the production war between Saudi Arabia and Russia.

Unemployment claims from March to November grew to 8,425, compared to 30,000 direct jobs in 2019. The full impact may have been 230,000 jobs in Colorado, given the jobs multiplier. Dan Haley, chief executive of Colorado Oil and Gas Association, at year’s end reported cautious optimism for 2021 as prices escalated and vaccines began to be administered.

Covid slowed the renewable sector, too, causing Vestas to announce in November it would lay off 185 from its blade factory in Brighton.

9) Utilities mostly hold onto empires—for now

Xcel Energy got a big win in November when Boulder voters approved a new franchise after a decade-long lapse while the city investigated creating its own utility. Black Hills Energy crushed a proposed municipal break in Pueblo. And Tri-State Generation & Transition stalled exit attempts by two of its three largest member cooperatives, Brighton-based United Power and Durango-based La Plata Energy, through an attempt to get jurisdiction in Washington D.C.

But there was much turbulence. Xcel lost its wholesale supplier contract to Fountain, a municipality. Canon City voters declined to renew the franchise with Black Hills. And Tri-State lost Delta-Montrose, which is now being supplied by Denver-based Guzman Energy, a relatively new wholesale supplier created to take advantage of the flux in the utility sector. Low-priced renewables have shaken up the utility sector – and the shaking will most certainly continue as the relationship between consumers and suppliers gets redefined.

10) Two utilities take lead in the race toward 100% renewables

Xcel Energy in December 2018 famously announced its intent to reduce carbon emissions from its electrical generation 80% by 2030 (as compared to 2005 levels), a pledge put into law in 2019. In 2020, nearly all of Colorado’s electrical generators mostly quietly agreed to the same commitment.

Meanwhile, several utilities began publicly plotting how to get to 100%. Most notable were Platte River Power Authority and its four member cities in northern Colorado. Holy Cross Energy, the electrical cooperative serving the Vail-Aspen, Rifle areas, announced its embrace of the goal in December. CEO Bryan Hannegan said the utility sees multiple pathways to this summit.

A fast-charger for electric vehicles can now be found near the entrance to Dinosaur National Monument.

11) Gearing up for transportation electrification

You can now get a fast-charge on your electric car in Dinosaur, Montrose, and a handful of other locations along major highways in Colorado, but in 2021 that list will grow to 34 locations.

Colorado is gearing up for electric cars and trying to create the infrastructure and programs that will accelerate EV adoption, helping reduce greenhouse gas emissions from transportation, now the No. 1 source, while delivering hard-to-explain-briefly benefits to a modernized grid.

Also coming will be new programs in Xcel Energy’s $110 million transportation electrification program approved by the PUC just before Christmas. It creates the template going forward.

Now comes attention to medium- and heavy-duty transportation fleets. Easy enough to imagine an electrified Amazon van. How about electric garbage trucks?

Colorado and 14 other states attempted to send a market signal to manufacturers with a July agreement of a common goal of having medium- and heavy-duty vehicles sold within their borders be fully electric by mid-century. Of note: Other than Vermont, Colorado was the only state among the 14 lacking an ocean front.

Many await arrival of the first Rivian pickup trucks in 2021, while Ford is working on an electric version of its F-series pickup.

12) Disproportionately impacted communities

The phrase “disproportionately impacted communities” joined the energy conversation in Colorado in 2020.

In embracing the greenhouse gas reduction goals, in 2019, state legislators told the Air Quality Control Commission to identify “disproportionately impacted communities,” situations where “multiple factors, including both environmental and socio-economic stressors, may act cumulatively to affect health and the environment and contribute to persistent environmental health disparities.”

The law goes on to describe the “importance of striving to equitably distribute the benefits of compliance, opportunities to incentivize renewable energy resources and pollution abatement opportunities in disproportionately impacted communities.”

Specific portions of Air Quality Control Commission meetings were devoted to this. What this will mean in practice, though, is not at all clear.

A version of this was previously published by Empower Colorado. IT was published in the Jan. 5, 2020, issue of Big Pivots.

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