Primary goal of Office of Just Transition’s Action Plan is helping communities transition to prosperous futures
Final action plan was released Dec. 31 following a year-long process
Like it or not, change is coming to Northwest Colorado and its coal communities of Craig and Hayden, due to the state of Colorado’s move to clean energy by 2030.
With the decision to move away from coal as an energy provided forced on the communities from the state level, the Yampa Valley (Moffat, Rio Blanco and Routt Counties) will see significant upheaval when it comes to the way of life locally, which has relied on the coal industry for more than 50 years.
Knowing that upheaval is coming and economic challenges will exist for the rural, remote communities, the state of Colorado and Governor Jared Polis passed Colorado House Bill 19-134, establishing the advisory committee for a Just Transition plan, tasking the committee with developing recommendations for the state.
The bill also declared that “a strong and comprehensive policy is needed to invest new financial resources in coal communities that are seeking to diversify and grow their local and regional economies in a manner that is both sustainable and equitable.”
Colorado was the first state to establish an office to help with the transition and to develop a statewide strategy to move away from coal.
Moffat County is slated to lose more than 400 jobs due to the transition away from coal in the state of Colorado.
Knowing that, the Yampa Valley (Moffat, Rio Blanco, and Routt Counties) was deemed one of 11 Tier 1 Transition Communities in the state.
The final action plan, which is 20 pages in length, focuses on helping coal communities transition to prosperous futures through six community strategies. According to the action plan, the six strategies for communities include the following: align state and federal programs to assist local strategies; target early successes in business start-ups, expansions, retention, and attraction; empower communities with resources to drive their own economic transitions; coordinate infrastructure investments to support local and regional transition strategies; identify and support state, regional, and local institutions to facilitate needed investments; and attract grants and investments to power local economic growth.
The goal of helping coal communities transition to prosperous futures is more good jobs, a more diverse economy, and a broader property tax base, according to the action plan.
Align state and federal programs to assist local strategies
In the first community strategy of aligning state and federal programs to assist local strategies, the Office of Just Transition stated that community and economic development is a team sport, “requiring maximizing that coordination in transition communities to take full advantage of all available tools to create a strong environment of all available tools to create a strong environment for job creation through business retention, expansion, and attraction.”
Gov. Polis, through the community strategies, has directed state agencies to make assisting coal transition communities a priority, according to the action plan. The Governor’s Cabinet’s Evironment and Renewables Group adopted two “Wildly Important Goals” related to economic develop and job creation in coal transition communities.
Included in the first community strategy, the Office of Just Transition says it will establish State Action Teams to work with each Tier 1 community, and that those teams will, “coordinate and align existing state programs, funding and infrastructure investments to support transition plans in its partner community or region.”
Additionally, the OJT will establish a statewide Just Transition Team made up of experts in relevant fields (including finance, grant opportunities, business recruitment and site selection, business expansion, and more) to support the State Action Teams with critical guidance and expertise, and to help coordinate and execute support strategies at the state level. Together, the State Action Teams and the statewide Just Transition Team will serve as the main vehicles for any assistance provided to these communities under the provisions of the Rural Economic Advancement of Colorado Towns (REACT) Act established in 2018.
Target early successes in business start-ups, expansions, retention, and attraction
Community strategy 2 will focus on finding early success for businesses in coal transition communities, the action plan stats.
According to the description for strategy 2, the plan is, “to help coal transition communities achieve early successes in attracting new businesses and creating good new jobs — and retaining existing jobs — consistent with local plans. While the full transition away from coal will take a long time, early successes will serve as a downpayment on the State’s commitment to that process and create momentum for the long-term.”
OJT says it will rely on the State Action Teams to help work with the affected communities to help make sense of the dizzying array of programs and incentives available through the state and federal governments. Additionally, OJT says that the Colorado Office of Economic Development and International Trade has committed at least $500,000 in strategic funds for 2021 for grants to attract new businesses to Tier 1 communities, or to help grow existing businesses in Tier 1 communities. The OEDIT has also allocated more than $2 million in loan guarantees to the Colorado Clean Energy Fund to support construction jobs that provide energy-saving building upgrades in coal transition communities.
Empower communities with resources to drive their own economic transitions
Community strategy 3 involves empowering those communities, effected by the transition away from coal, with the necessary resources to drive their own economic transitions.
“If economic development is a team sport, then local leaders are the best quarterbacks,” the OJT said. “In other words, the most effective and long-lasting economic development strategies usually comes from within communities themselves, reflecting their own priorities and building on existing strengths.”
According to the final action plan, the state will work with appropriate jurisdictions within Tier 1 communities to ensure each has the staff capacity and expertise to effectively develop and implement local transition strategies.
Taking it a step further, DOLA has committed up to $500,000 in the current fiscal year for grants to Tier 1 communities to build the staffing and expertise (including shared regional and statewide capacity) to develop and implement their local transition strategies. That funding will come from the Energy and Mineral Impact Assistance Fund (EIAF) and Rural Economic Development Initiative (REDI) fund, according to the final action plan.
Coordinate infrastructure investments to support local and regional transition strategies
In community strategy 4, OJT says it will coordinate and focus existing state efforts to maximize their effect in transition communities within existing resources, meaning they will invest and support local and regional infrastructure to ensure the communities transitioning can maintain and improve quality of life and critical services.
“As an essential transition strategy, the JTAC recommended the State ’invest in physical and community infrastructure to maintain and improve quality of life and critical services,”’ the action plan states.
It states that a community’s physical and cultural assets “are key components of [its] appeal — the ability to reach one’s markets by road, rail or air — or broadband — as well as quality schools, higher education and apprenticeship programs, a wide range of quality healthcare services, and other community assets such as parks, arts facilities, and recreational opportunities.”
The final action plan agreed with the Just Transition Advisory Committee’s recommendation, stating it will consider a number of these investments (especially including broadband).
Identify and support state, regional, and local institutions to facilitate needed investments
For Tier 1 communities such as the Yampa Valley, the pending loss of major industrial assets will have a significant financial impact on the local economies.
The OJT states it knows this and says it’s going to identify and support state, regional, and local institutions to help facility needed investments in the community.
The pending loss of major industrial assets will result in the loss of high-paying jobs and millions of dollars in property taxes across the state. Assuming the average mill levy rate in Colorado (81.7 mills), OJT calculates it would require the creation of nearly $2.75 billion in new commercial property value (2019 dollars) to replace all the property taxes paid by Colorado’s existing coal facilities. However, assuming the average mill levy rate currently assessed in Tier 1 communities (70.19), the value of new commercial property that would be needed to replace the lost property taxes rises to nearly $3.2 billion.
“That will take a lot of investment, some of which will certainly come from within the communities themselves,” OJT said in the action plan. “But there probably is no way to do the job completely without attracting significant sums from outside.”
What transition communities will require for success is expert leadership and effective coordination among existing funds and institution, the OJT said. These include the Just Transition Cash Fund, established by HB 19-1314. The OJT is authorized to “seek, accept, and expend gifts, grants, or donations from private or public sources” to help achieve the goals of the legislation.
Attract grants and investments to power local economic growth
The sixth and final community strategy involves grants and investments from inside the community with stakeholders, as well as outside of the community from the state, companies, and more.
“This final community strategy is about making sure those institutions actually have the capital needed to drive those investments,” the action plan states. “Based on some initial exploration by OJT and several stakeholders, we believe there may be significant interest among potential investors at the state and the national level. This strategy is about further gauging that interest and getting a firm understanding of how best to attract that capital to Colorado’s coal transition communities.”
According to the action plan, in early 2021 the OJT will work with the Governor’s Office and the Treasurer’s Office, and perhaps other stakeholders, to gather high level input on investor interest.
“We intend for this to lead to a convening, also in early 2021, of a series of conversations with distinct groups of funders and investors, including local and national foundations, family offices, community development financial institutions (CDFIs), impact investors, opportunity funds, and institutional investors,” the OJT said. “These conversations would focus on generating specific guidance for how best to structure our finance-related strategies and to more broadly and deeply gauge investor interest and capacity to support economic diversification in coal transition communities.”
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