Utilities in Arizona and Colorado on June 26 released timelines for early closures of their coal-fired power plants, reflecting a larger trend across the Southwest of utilities phasing out coal-fired baseload generation and incorporating more renewables and storage into their resource mix. Meanwhile, a national group on June 29 launched a platform aimed at supporting coal-dependent communities and workers that face a rapidly shrinking coal economy.
Tucson Electric Power, the second-largest investor-owned utility in Arizona, on June 26 released its 2020 integrated resource plan outlining how the company will lessen its dependence on coal over the next 15 years while boosting development of renewable resources and energy storage. TEP will close units 1 and 2 of the coal-fired Springerville Generating Station, which it operates jointly with UniSource Energy Services, in 2027 and 2032, respectively. The two units have a combined capacity of 793 MW. There was no set date for their retirement. While TEP has a 100-percent stake in units 1 and 2, the plant's two remaining 400-MW units are owned separately by Tri-State Generation and Transmission Association and Salt River Project.
TEP said it will work with employees and local leaders to prepare for the Springerville closure.
"We know our plant and our employees are a big part of the Springerville-area community, and we plan to work together over the next 12 years to support their long-term success," TEP CEO David Hutchens said in a June 26 news release.
The utility in its IRP details the 2.45 GW of combined wind and solar resources and 1.4 GW of energy storage it will install over the next 15 years as replacement resources for the plant, of which 447 MW of wind is expected to come on line in 2021. Its energy mix will be composed of 1.8 GW of natural gas, which will scale down to 1.67 GW in 2028 and 1.58 GW in 2032.
With the planned closures of the San Juan Generating Station, in which TEP owns a 50-percent stake of Unit 1, in 2022 and the Four Corners Power Plant, in which TEP owns 7-percent stakes in units 4 and 5, in 2031, coal would be entirely eliminated from TEP's energy mix by 2033. TEP in its IRP said declining costs for renewable energy resources, depressed natural gas prices and the risk of regional mine closures due to other coal plants shutting informed its decision to shutter the Springerville units.
TEP's IRP reflects its goals of developing enough new renewable generating capacity to account for 40 percent of its overall energy mix by 2030, 60 percent by 2033, and 70 percent by 2035. The commitments are voluntary in the absence of a statewide mandate. Arizona in 2006 was among the first states to establish a renewables portfolio standard, but the goal of 15-percent renewable resources by 2025 for regulated utilities has nearly been achieved by the state's large utilities, largely as a result of declining prices in the renewables sector.
In Colorado, the Colorado Springs Utilities Board on June 26 voted to close the city's two coal-fired plants as part of the municipally owned utility's electric-power integrated resource plan. Combined with a separate plan for the muni's natural gas service, the board set emissions-reduction targets of 80 percent by 2030 and 90 percent by 2050, relative to 2005 levels. The plans meet requirements outlined in Colorado's 2019 climate action plan bill, HB19-1261.
"This is a historic decision for the future of our utility and this city," Utilities Board Chairwoman Jill Gaebler said in a news release. "It sets us on a path to best meet our strategic focus of balancing rates, reliability and relationships."
The 208-MW Martin Drake Power Plant, located in the heart of Colorado Springs, will close by 2023, followed by the 268-MW Ray Nixon Power Plant by 2030. Six 30-MW natural gas turbines will temporarily be installed at the Drake plant over the next decade. Under the plan, coal will be completely phased out of the utility's generation mix by 2030. At least 500 MW of new wind resources and more than 400 MW of storage will be needed to meet the city's emissions targets, according to a presentation at the board meeting.
Elsewhere in Colorado, Tri-State closed the 100-MW coal-fired Nucla Station in September 2019 (see CEM No. 1557) and has plans to shutter the 427-MW Unit 1 of the 1,285-MW Craig Generating Station by 2025 (see CEM No. 1402). Tri-State in January announced it would work with plant co-owners to retire all of its coal assets in Colorado and New Mexico, including the remaining two units at Craig, in which the wholesale power provider has a 24-percent stake, by 2030.
In response to clean-energy transitions taking place across the country, a coalition of 80 organizations on June 29 launched a platform aimed at supporting coal-dependent communities and workers.
The National Economic Transition Platform called Colorado's Just Transition Office an "excellent model" for other states. The platform is composed of five pillars advocates say create a framework for a national transition program away from coal and toward renewables. It addresses challenges such as workforce skills training, environmental cleanup of closed mines, and advocacy offices for vulnerable communities.
"From Appalachia to western tribal lands, the families and workers in America's coalfields and coal plants fueled the greatest economic expansion our country has ever witnessed. As coal declines, these communities deserve the investment they need to make a just and fair transition to a brighter economic future," Heidi Binko, executive director of the Just Transition Fund, a nonprofit leading the platform, said in a June 29 news release.
Colorado's Just Transition Office was created after the passage in 2019 of HB19-1314, a first-of-its-kind bill that directed the creation of the office within the Colorado Department of Labor and Employment. Coal provided 45 percent of Colorado's net power generation in 2019, according to the U.S. Energy Information Administration.
The concept of a "just transition" has spread. Navajo Nation President Jonathan Nez in January wrote to the Arizona Corporation Commission recommending a series of steps to provide a just transition for Navajo communities. Among them is a suggested mandate for TEP to provide $61.8 million in seed funding for worker retraining and economic diversification [E000004596].
Both the Navajo and Hopi tribes have been severely affected by the 2019 closure of the Navajo Generating Station in northern Arizona and its associated Kayenta Mine. The tribes also face further economic fallout from the planned closures of New Mexico's San Juan and Four Corners plants in the coming years, though that state's Energy Transition Act earmarked funds for worker retraining and economic development from securitized financing of Public Service Company of New Mexico's San Juan assets.
"A just transition for the Navajo Nation—and all coal-impacted communities—is a vital component to a cleaner electric generating fleet," Nez said in the letter to Arizona regulators.