Westminster, Colorado-based Tri-State Generation and Transmission Association will close the 100-MW coal-fired Nucla Station power plant in southwestern Colorado two years early as part of the wholesale cooperative’s new commitment to reduce fossil-fuel usage and pursue a Responsible Energy Plan.

In a July 17 press release, Tri-State said its goal is to lower wholesale rates while ensuring reliability and increasing flexibility for its members.

Tri-State also, on July 15, filed a notice along with member Delta-Montrose Electric Association to the Colorado Public Utilities Commission informing the commission that the organizations had entered into settlement negotiations over a disputed exit charge [18F-0866E]. Tri-State and DMEA are in the process of committing terms to writing and seeking approval of those terms from their respective boards, the notice says. The organizations intend to file terms of the settlement by close of business July 19.

Earlier this month, Tri-State received a request for a buyout estimate from another member, La Plata Electric Association, according to a news release on LPEA’s website.

The Nucla plant closure will further reduce Tri-State’s dependence on coal, which has shrunk in recent years with the 2017 closure of Units 2 and 3 at the San Juan Generating Station in New Mexico. Closure of the coal-fired Craig Station Unit 1, one of three 427-MW units at the plant, is scheduled for the end of 2025. Tri-State shares ownership in Craig 1 and 2 with Salt River Project, PacifiCorp, Xcel Energy and Platte River Power Authority. It is the sole owner of Craig Unit 3. There are no apparent plans to close Craig 2 and 3, but Tri-State says it is increasingly accessing market power when advantageous.

Nucla Station, which employs 35 people primarily from the towns of Nucla and Naturita (combined population about 1,300), will be retired in early 2020 following the exhaustion of its on-site fuel supply, the release said. The plant’s original closure was scheduled for the end of 2022.

“For decades, Nucla Station has been part of the fabric of Nucla and Naturita, and we understand the retirement of the plant impacts our employees, their families and the community,” Tri-State CEO Duane Highley said in the release. The company pledged to provide $500,000 in community support over five years.

In addition to closing the Nucla plant, Tri-State said its Responsible Energy Plan sets goals to establish aggressive carbon-reduction, renewable-energy and resource-planning requirements. “We will be clean, reliable, flexible and affordable, and do it all within our not-for-profit cooperative business model,” Highley said in the release.

Tri-State has come under fire from its distribution co-op members in recent months for its 5-percent cap on self-generation and its inflexibility on long-term contracts in the face of declining renewable-energy prices (see CEM No. 1518 [17]). A contract committee of the membership, including representation from each Tri-State member, is considering greater contract flexibility for members, including partial-requirements contracts that would allow for more local renewable-energy projects. The committee is developing recommendations for presentation to the Tri-State board of directors, which provides each member a vote.

“As we transition, we cannot make these changes alone,” Highley said in the release. “Our industry requires working with a wide group of stakeholders to address the numerous challenges that are more successfully addressed with partners.”

Tri-State will engage with former Colorado Gov. Bill Ritter, now director of the Center for the New Energy Economy at Colorado State University, for help refining the plan. “Governor Ritter and the Center for the New Energy Economy will convene for Tri-State the best and brightest to surface ideas that will inform and advance our planning,” Highley said.

Tri-State will address developing Western regional electricity markets, permitting for transmission lines and power plants, assisting impacted energy-producing communities, and reconsidering the value of hydropower to ensure the Responsible Energy Plan’s success, the release said.