Western Fuels-Colorado closes on Colowyo acquisition

The acquisition of Colowyo Mine from Rio Tinto has been completed, Western Fuels-Colorado, LLC announced Thursday in a news release.

Terms of the transaction will not be released, the company reported.

Tri-State Generation & Transmission Association is the majority owner of Western Fuels-Colorado. The not-for-profit wholesale power supplier also owns Craig Station, a 1,304-megawatt, coal-fired power plant.

In 2010, 1.5 million tons of coal mined at Colowyo fueled Craig Station. Total coal production at Colowyo in 2010 was 2.4 million tons.

“Electricity responsibly produced with coal remains a remarkable value to serve the power needs of the region,” said Ken Anderson, executive vice president and general manager of Tri-State, in the joint Western Fuels/Tri-State news release. “The purchase of Colowyo Mine ensures Tri-State will have a cost-based supply of coal to generate affordable power for the benefit of Tri-State’s member electric cooperatives.”

Craig Station has undergone a series of efficiency improvements in recent years and is expected to operate in its current state for the next 30 to 40 years, according to the release.

“The Colowyo Mine will help supply clean-burning coal to Craig Station for the expected life of the power plant,” said Mike McInnes, senior vice president of production at Tri-State, in the release. “Tri-State will continue to invest in Craig Station and in the development of clean coal technologies.”

All three of Craig Station’s power generating units are fueled by coal produced in Moffat County from Colowyo and Trapper Mines.

According to the release, Colowyo Mine, Trapper Mine and Craig Station support 752 direct and indirect jobs in Moffat County and accounts for $54.8 million in salary for local residents.

“This transaction further strengthens the energy economy in northwestern Colorado,” said Darcy Owens-Trask, director of the Craig/Moffat Economic Development Partnership, in the release. “Our region will continue to stay strong with the high-level jobs that responsibly and safely generate electricity from locally-produced coal.”

Currently, Colowyo Mine employees are being transitioned into Western Fuels-Colorado.

“It has been a smooth transition of all Colowyo employees into the Western Fuels family,” said Duane Richards, chief executive officer of Western Fuels Association, in the release. “Our priority is to continue the safe operation and environmental stewardship of Colowyo Mine.”

Western Fuels Association is an affiliate of Western Fuels-Colorado.

Tri-State is also a partner in the $11 million Rocky Mountain Carbon Capture and Sequestration project.

The experiment, which is being led by the Denver office of Slumberger Carbon Services, is studying geologic formations in Craig to determine whether carbon dioxide emissions can be stored in porous, subsurface rock formations rather than emitted into the atmosphere.

Wayne Rowe, project director for Slumberger, said crews are in the midst of constructing a well pad not far from Craig Station.

He said drilling of the first carbon sequestration test well is expected to begin next week.

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