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In the dance to achieve cleaner air, it’s one step forward then it’s back you go

by Allen Best

Retirement of three Colorado coal plants, which had been pushed forward to late 2028 in a November decision by the Colorado Air Quality Control Commission, has been pulled back to 2029.

Among those advocating for later retirements was an official in the administration of Gov. Jared Polis responsible for helping draft a strategy to decarbonize Colorado’s economy 50% by 2030.

Will Toor, director of the Colorado Energy Office, responded to the November decision with a letter to air quality commissioners saying his department is “very supportive of retiring coal generation as soon as practicable and replacing it with lower cost wind, solar, and storage – and has worked very hard with utilities across the state to achieve this.”

All that said, he added, “we have serious concerns with this decision.”

The Air Quality Control Commission had ordered that the coal plants near Colorado Springs, Fort Collins and Craig be retired by the end of 2028. The owners—Colorado Springs Utilities, Platte River Power Authority and Tri-State Generation and Transmission, respectively—had previously committed to closures by the end of 2029.

Air control commissioners had also indicated they would take up the matter of accelerated closures of Xcel Energy’s two units at Hayden.  In addition to the two units at Hayden, it also all the Colorado coal units currently scheduled to operate beyond 2030: the Pawnee unit at Brush, of which it is sole owner, and Comanche 3 at Pueblo, of which it has two-thirds ownership.

The proposal to advance retirements had originated with the Sierra Club and the National Parks Conservation Association. Testifying in support, Ron Binz, a former chair of the Colorado Public Utilities Commission, described the new dates as “nudges.” The commissioners agreed in a 5-2 vote. See, A nudge, not a shove.

In 7-0 vote on Wednesday, the commissioners withdrew from that preliminary decision. The commissioners voted shortly after emerging from an hour-long executive session. Tom Roan, an attorney from the state Attorney General’s Office, reported “takings and related questions of procedure” were discussed.

The matter before the commission most directly was the need to reduce regional haze caused by emissions from coal plants that results in degradation of Rocky Mountain National Park but also federal wilderness areas. That haze violates provisions of the Clean Air Act, and the commission has responsibility for getting Colorado into compliance.

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In 2019, state legislators gave the air commission primary responsibility to create policies in Colorado to achieve reductions in greenhouse gas emissions. The two goals overlapped in the discussions of commission members in November, and they did so again on Wednesday.

Utilities had testified against the hurried-up retirements in November. After the preliminary decision, they submitted an objection to the Air Quality Control Commission that said, in not so many words, “It’s just not fair.” The not-so-subtle subtext was a challenge about legality.

They said the commission had no legal authority and also lacked source-specific technical support and that the action “could result in an arbitrary and unreasonable taking of property rights.”

The utilities also said the commission was trying to make decisions about energy resources, including costs and rates, reliability and transmission, that are “clearly outside the expertise and jurisdiction” of the commission and the Air Pollution Control Division staff.

Then there was the deal offered by legislators in their 2019 law to induce utilities to voluntarily create clean energy plans. That law had offered a safe-harbor provision. Platte River, Colorado Springs, and Tri-State had all agreed to meet the state‘s decarbonization goals within that framework.

Toor made the same point. Utilities have much to think about in terms of planning their resource generation, he pointed out. The state’s Public Utilities Commission can best evaluate that planning —as it has done with Xcel in the past and will do so again next year when that utility submits plans for the next decade. It has started, for the first time, that same process with Tri-State. As municipalities, Colorado Springs and Platte River are exempt from state utility regulation. Platte River is a creation of four northern Colorado cities.

Will Toor

In his 3-page letter, Toor also alluded to practical considerations involved in the “bigger picture of achieving our climate goals.”

“Achieving economy-wide emissions reductions will require widespread electrification of cars, trucks, and buses, and a significant level of electrification of buildings and industry,” he wrote. “Implementing these policies will impact utility planning and the resources needed to ensure we are transitioning to a cleaner grid. The cost of electricity will be very important to making the economics of this transition attractive to vehicle and building owners. Potentially adding unnecessary costs by making resource planning decisions without an analysis of the cost impacts may limit investments in electrification.”

Before voting, the commissioners said relatively little.

“I want to reconsider my earlier vote,” said Jana Milford, who had voted for the closures in November. “I have reservations about the adequacy of the information used to support the earlier proposal.”

Elise Jones said she would vote for the reversal “because “we absolutely need to,” but also spoke to the dual missions of the commission. Commission members needed to have a discussion about carbon reduction targets identified in S.B. 236 and utility emissions, she added. That discussion “didn’t fit quite as well in regional haze as it might have been.”

After the meeting, Matt Gerhart, staff attorney for the Sierra Club Environmental Law Program, said he was “extremely disappointed” to see Toor’s position in opposition to the advanced coal retirements.

“We were disappointed to see Colorado’s leaders support the continued use of coal-fired power plants, which are the largest sources of air pollution in our state,” he said in an interview.

Matt Gerhart

Gerhart also described Colorado as a laggard among many Western states in its pace of coal retirements.

“Oregon just shuttered its last coal plant. Washington will have no coal plants by the end of 2025. New Mexico’s largest investor-owned utility now plans to get out of coal entirely by the end of 2024,” he said. “So a lot of other Western states are transitioning away from coal much faster than Colorado.”

Colorado remains relatively coal-heavy in its electricity generation, although that has been falling rapidly and will decline even more in the next five years as two coal-burning units at Pueblo and one at Craig close. Too, utilities have been using their coal plants at lower capacity as they have figured out how to integrate higher levels of renewables.

In 2019, according to a chart derived from information from the U.S. Energy Information administration, Colorado got 45% of its electricity from coal combustion, compared to 4% by Oregon and 7% by Washington. New Mexico was close to Colorado, with 42% of its electricity coming from coal. In contrast, Wyoming got 84% of its electricity from coal.

Pacific Northwest states have much higher levels of hydro. Washington state had nearly 63% and Oregon 47% compared to Colorado’s 2.5%.

Allen Best
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