Tri-State Closing Arizona, Colorado Coal Plants Early, Investing in More Renewables

Colorado-based cooperative Tri-State Generation and Transmission Association will accelerate the closure of a coal-fired unit in the northwestern part of the state, and also announced a retirement date for an Arizona coal plant, as part of the utility’s latest electric resource plan (ERP).

Tri-State on Dec. 1 also said it wants to acquire at least another 1,250 MW of renewable energy generation over the next several years. The not-for-profit company, which serves rural electricity consumers across four western states, said the ERP filed with the Colorado Public Utilities Commission (CoPUC) on Friday seeks to take advantage of funding from the U.S. Dept. of Agriculture’s (USDA’s) $9.7 billion Empowering Rural America (New ERA) program, part of the Biden administration’s Inflation Reduction Act.

The use of funding from the New ERA program will help Tri-State reduce the risks to its customers of higher energy bills due to the costs of retiring stranded assets. Tri-State said economic considerations were paramount in the decision to close the coal plants.

The utility announced it will close the last of three units at the 1,285-MW coal-powered Craig Station in Colorado by Jan. 1, 2028. Unit 3 originally was scheduled to close by year-end 2029. The retirements of Units 1 and 2 at Craig (by Dec. 31, 2025, and Sept. 30, 2028, respectively) were previously announced. Craig Station Units 1 and 2 are jointly owned by Xcel Energy, Platte River Power Authority, Salt River Project, PacifiCorp. and Tri-State; Tri-State wholly owns Unit 3.

Unit 2 at Craig received a Top Plant award from POWER in 2018 after completing a project to install selective catalytic reduction technology to reduce emissions.

Tri-State said it will close Arizona’s Springerville Station 458-MW Unit 3 in 2031. The Springerville power plant is a 1,765-megawatt, four-unit generating facility in eastern Arizona near the New Mexico border. Tri-State wholly owns Unit 3, which opened in 2006 and had an expected lifespan of 60 years. The utility had not previously announced a closure date for the facility.

Units 1 and 2 at Springerville are owned by Tucson Electric Power, which has said it will close the units in 2027 and 2032, respectively. Unit 4, owned by Salt River Project, has no retirement date.

‘Ambitious Plan’

“Our ambitious plan, with federal funding, can accelerate clean energy investment and significant greenhouse gas emissions reductions at a lower cost than alternative scenarios, all while exceeding both industry-standard and heightened extreme weather reliability criteria,” said Duane Highley, Tri-State CEO, in a statement. “We are clearly demonstrating how Tri-State remains the most reliable, affordable and responsible power supplier for our members both now and well into the future.”

The utility said the investments in the ERP are contingent on approval by the CoPUC and a New ERA award from the USDA. “Federal funding in support of our preferred plan would be transformational for Tri-State and our members,” said Highley.

Tri-State will continue to have an interest in some thermal generation, including the Laramie River Station near Wheatland, Wyoming. Friday’s announcement also noted the utility plans to add a 290-MW combined-cycle unit to its existing natural gas-fired fleet in 2028, and said it would add carbon capture and sequestration to that unit in 2031.

Western Resource Advocates (WRA), a conservation group operating in the western U.S., in an email told POWER the group and other stakeholders worked with Tri-State over the past year to develop the utility’s strategy.

“Tri-State should be commended for proposing a transformational electric resource plan, which will reduce carbon pollution across the West and provide economic benefits for its member cooperatives,” said Stacy Tellinghuisen, deputy director of policy development at WRA. “We encourage other utilities to take advantage of this once-in-a-generation opportunity to use federal funds to replace expensive, polluting plants with cleaner resources.”

“The benefits of federal funding would help us to address the stranded costs of retiring coal units, ensuring lower emissions while protecting rural consumers from increased costs,” said Highley. “With our local, state and federal partners, we will continue to work with our employees and the northwest Colorado community to support their transition.”

The National Rural Electric Cooperative Association earlier this year said the USDA, which administers the New ERA program, had received 157 letters of interest from electric co-ops seeking funding support for 750 projects. Awards are expected to be made early next year. Grants may be up to 25% of a project’s cost, though the maximum amount of loans and grants is limited to $970 million for any one co-op.

“Tri-State’s plan leverages potential federal funding to accelerate their transformation at the lowest cost and greatest reliability,” said Ruth Marks, CEO of Tri-State member Mountain View Electric Association. “Importantly, Tri-State included opportunities for its members from each state to participate in a collaborative resource planning process.”

“We appreciate Tri-State’s commitment to decarbonization and are excited to see the benefits of more low-cost clean energy that the New ERA program can deliver for electric cooperative members and rural communities across our state,” said Will Toor, executive director of the Colorado Energy Office.

Revisions Possible

The ERP is subject to review, modification, and approval by the CoPUC. Tri-State noted that it could change based on the New ERA award, and could be impacted by changes in technologies, markets, and new regulations.

“Tri-State’s proposed plan shows that with the right approach, shifting to renewable energy is possible in a timely, reliable and economically beneficial way,” said Alex Routhier, Ph.D., Arizona clean energy manager and senior policy advisor at WRA. “With Tri-State’s announcement, Arizona’s Salt River Project is now the only owner of Springerville without an announced retirement date for this high cost, pollution-intensive coal-fired power plant. We encourage SRP to follow Tri-State’s lead and seriously evaluate continued reliance on coal-fired power from Springerville.”

Tri-State in its 2020 ERP committed to significant carbon pollution reductions for power generation for its members in Colorado. The utility said the latest plan both builds on that progress by retiring the Springerville unit, and also by adding renewables and battery storage to serve customers across Tri-State’s system. The cooperative said that if approved by Colorado regulators, the proposed resource acquisition—which includes solar, wind, and battery storage—will be the largest in its history.

“We strongly support Tri-State’s proposal to make smart use of federal funding to bring the benefits of low-cost clean energy to its rural members,” said Sarah Clark, Colorado field manager for the Sierra Club.  “Tri-State’s plan to accelerate its transition away from coal and toward cleaner energy resources is a win-win, as it would both reduce emissions and save customers money. We encourage the USDA to approve Tri-State’s federal funding request to advance this transformational plan.”

The utility said the plan would result in an 89% reduction in greenhouse gas emissions in Colorado by 2030, relative to 2005, and also bring $1.8 billion in cost savings for members of the cooperative.

“Our rapid transition increases clean energy used by our members to 50% in 2025 and 70% by 2030, benefiting members with lower and stable priced renewable energy resources,” said Highley. “Through 2043, our plan reduces costs to our members by more than $1.8 billion compared to business as usual.”  Highley said securing “federal funding in support of our preferred plan would be transformational for Tri-State and our members.”

Tri-State, in detailing its acquisition plans for 1,250 MW of renewable energy and battery storage, said it would add those generation resources between 2026 and 2031. Those include:

• 500 MW of wind energy.
• 200 MW of wind resources with storage hybrids.
• 310 MW of storage, including standalone 100-hour iron air batteries, standalone 4-hour batteries, and 4-hour batteries with wind and storage hybrids.
• 240 MW of solar power.

The utility said those resources will be acquired through a mix of power purchase agreements and owned facilities.  Tri-State also reiterated an earlier announcement that it would add 595 MW of new solar power in 2024 and 2025, supporting a total of 920 MW of solar resources on Tri-State’s system by 2031. The cooperative said it will have 1,374 MW of wind power on its system by 2031.

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).