Get Big Pivots

Wholesale power provider for 42 electrical cooperatives hopes for federal help as it pivots from coal-heavy portfolio during the next few years. 


by Allen Best

In planning for the years 2026-2031, Tri-State Generation and Transmission wants to hasten its exits from two coal plants and add a ton of new wind and solar generation plus battery storage. This is to supplemented by new electrical production from natural gas.

The electric resource plan is to be filed with the Colorado Public Utilities by 5 p.m. today. However, these details were obtained by Big Pivots from a memorandum sent to members of the Colorado Solar and Storage Association. Important details were confirmed by other stakeholders.

Two accelerated coal plant retirements will be identified in the PUC filing. At Craig, in northwest Colorado, the utility proposes to advance the retirement of its last coal-burning unit to no later or earlier than Jan. 1, 2028, two years earlier than is currently the plan.

The proposal also calls for retirement of Springerville Unit 3, a 400-megawatt coal-burning unit in Arizona. Tri-State had not previously announced plans for retiring the plant, in which it holds a 51% interest, according to a September 2023 Securities and Administration filing. The proposal calls for a retirement no later than Sept. 15, 2031, but leaves the door open for a sooner date.

Tri-State does not see getting out of fossil fuels. It will retain an interest in a coal plant near Wheatland, Wyo., called Laramie River Station.

It also proposes to augment its existing natural-gas-burning fleet with a combined-cycle gas plant. That plant could also be coupled with carbon capture and sequestration technology. Tri-State has 8 member cooperatives in Wyoming in addition to 18 in Colorado, with others in New Mexico and Nebraska. Tri-State has significant transmission across the four-state region.

Not least, Tri-State proposes to add 1,240 megawatts of new renewable generation plus 210 megawatts of energy storage in four installations.

Many of these ambitions depend almost entirely upon federal funding to buy down debt on assets stranded as the United States tries to dampen its greenhouse gas emissions. The Inflation Reduction Act of 2022 allocated $9.7 billion for a national program called New ERA (Empowering Rural Communities).

In September, Jeff Wadsworth, chief executive of Poudre Valley Electric, one of the largest of Tri-State’s 42 member cooperatives, told Big Pivots that the New ERA was the “single biggest investment for electric cooperatives since the New Deal.” The law creating the Rural Electrification Administration was passed by Congress in 1936, providing federal aid for extension of electrical lines to rural areas.

As the IRA was being crafted in 2022, Tri-State representatives lobbied Congress and the Biden administration hard to carve out funds for the energy transition in rural communities.

Tri-State has filed a letter of interest in applying for $970 million in federal funds. Whether it will get full funding is uncertain. In its SEC filing Tri-State reported overall long-term debt of $2.9 billion.

The National Rural Electric Cooperative Association, or NRECA, in September pointed out that the U.S. Department of Agriculture, the federal agency responsible for administering the program, had received 157 letters of interest from electric co-ops for 750 projects. The money is to be divided between small- and medium-sized cooperatives as well as Tri-State and other large cooperatives.

The federal agency has not set a timeline for a decision on federal funding, but stakeholders in the Tri-State process at the PUC expect a decision from commissioners by early summer. This presumed a decision by federal funding by mid-spring.

In a memo sent to some members of the Colorado Solar and Storage Association on Tuesday, the organization’s president, Mike Kruger, and general counsel, Ellen Howard Kutzer, said they believe it is best to support Tri-State in its quest for federal aid.

“We continue to believe it is better for the Colorado energy market to have a solvent and functioning Tri-State making an energy transition,” they said.

COSSA and several other key groups involved in the proceeding at the PUC agree to a stipulation that expresses their broad support while reserving the right to push back on elements that aren’t part of the plan that presumes federal money through the New ERA program. Other signatories include Western Resource Advocates, the Sierra Club, and the Colorado Energy Office as well as two of Tri-State member cooperatives. At least two other groups declined.

The Office of the Utility Consumer Advocate, the state agency with the mission of speaking on behalf of consumers, also supported the narrow agreement.

“We are supportive of the broad concept that Tri-State has laid out in their electric resource plan, although we think there is a lot of work to do,” said Joseph Pereria, deputy director of the agency. “There are a lot of unknowns, but a good process has been started.”

Tri-State’s insistence that it needs more natural gas backup for its major expansion into renewables is likely to be a major source of disagreement going forward. Xcel Energy and Platte River Power Authority are making the same argument as they prepare for a life of making electricity without coal.

Another major discussion will likely be about what constitutes just transition for Craig as it closes its coal-burning units. In adopting its goals for dramatic decarbonization in 2019, Colorado legislators also created an Office of Just Transition. The mission as summarized by the agency is to help “workers transition to new, high-quality jobs, to help communities continue to thrive by expanding and attracting diverse businesses, and to replace lost revenues.”

What this means in practice, though, is unclear. In the case of Pueblo, Xcel Energy has agreed to pay property taxes for 10 years after the last of the three coal-burning units at the Comanche Generating Station closes by 2031. As part of that process, Xcel will be conducting what is called a just transition electric resource plan. Xcel will see what kind of assets needed for its business can be located in Pueblo to replace the lost tax base and jobs.

Northwest Colorado communities need the same level of consideration and assistance, said Pereira.

Pueblo has started the conversation. “Craig and Moffat County are in a different part of the state, with different needs and concerns,” he said. “So it’s important that we listen to those communities and that we think big about how we can help them plan for a future without coal.”

Wade Buchanan, director of the Office of Just Transition, said only that it’s useful to have certainty when planning for retirements of coal plants and mines.

Allen Best
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