Routt County commissioners push back against state coal legislation
February 19, 2019
STEAMBOAT SPRINGS — The Routt County Board of Commissioners approved a letter Tuesday alerting state legislators to commissioners' concerns over how an energy bill proposed in the Colorado House would impact local communities.
HB19-1037 — the Colorado Energy Impact Assistance Act — would authorize the Colorado Public Utilities Commission to provide “transition assistance” bonds for communities to help cushion the economic blow if a coal-fired power plant closes. It would provide funds to subsidize electricity rates, lessen tax revenue loss and help retrain power plant workers who lose their jobs when a plant shuts down.
Officials, including county commissioners from Routt and Moffat counties, argue the bill incentivizes utilities to close coal-fired power plants without an adequate understanding of how such closures would affect communities.
In the letter, addressed to Colorado representatives who sponsored the bill as well as Republican State Sen. Bob Rankin, Routt County commissioners explained that coal and coal-fired power plants constitute a major component of the local economy.
"The transition away from coal has potentially significant and devastating impacts for coal-reliant communities unless done with a great deal of intention and care,” the letter stated.
Routt County Commissioner Doug Monger said his primary concern with the proposed bill is its effects on Hayden, a town that relies heavily on its coal-fired power plant, Hayden Station, for jobs and tax revenue.
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Monger joined Moffat County Commissioner Ray Beck in testifying against the bill at a hearing before Colorado’s House Energy and Environment Committee last week.
Rep. Chris Hansen, one of the primary sponsors of the bill, sent out a news release after the hearing in which he argued that the legislation cushions the blow of the inevitable demise of coal.
"Coloradans are currently on the hook for the outstanding debt on aging power plants," Hansen said in the news release. “The bill will help hardworking families save money on their energy bills and ensure a soft landing for when an aging power plant inevitably shuts down because of market forces.”
Getting off coal
More than 550 coal-fired, electric-generating units across 43 states have either shut down or plan to close by 2025, according to a report from the American Coalition for Clean Coal Electricity, an industry-lobbying group. That accounts for about a 30 percent decrease nationwide.
Supporters of coal divestment point to the economic advantages of alternative energies that have become cheaper in recent years.
A report from Vibrant Clean Energy, an energy grid-modeling firm based in Colorado, projected the state could save $250 million annually by replacing all of its coal-fired power plants with renewable energies and natural gas.
Xcel Energy, Colorado’s largest utility provider that has full operational control of the Hayden Station, has already announced plans to divest from carbon fuels in favor of renewable energy sources.
In December 2018, Xcel Energy became the first major U.S. utility to pledge to go completely carbon-free. It announced it plans to cut its carbon emissions by 80 percent by 2030 and to completely eliminate carbon-based fuels by 2050.
The company has made significant investments toward that goal.
The Colorado Public Utilities Commission approved a $2.5 billion plan in September 2018 by Xcel Energy to transition its coal-fired plants to wind, solar and natural gas. Xcel had announced plans a month prior to close two of the three units at a plant in Pueblo by 2026 as well as a plant in Colorado Springs by 2035.
The closure of the Hayden Station would have a signifiant impact on the local economy. The plant employs more than 100 people and generates more than $6 million dollars in property taxes, according to a report compiled by Monger. That makes it the third-largest taxpayer in Routt County.
Of particular concern is how local taxpayers would be impacted if the power plant closed. In 2017, voters in Hayden approved a $22.9 million bond to build a new school, to be paid for through mill levies. The Hayden plant currently pays for 58 percent of the project’s levies, according to the commissioners' letter.
Monger said that while the proposed bill helps to lessen certain tax revenue loss, it would not help to repay the power plant’s tax contributions for the new school. That burden would fall instead on about 2,000 taxpayers in the Hayden School District if the power plant closed.
Routt County Commissioner Beth Melton also voiced skepticism over the bill’s provision to allocate funds for retraining the more than 100 workers at the power plant.
“Historically, we’ve seen in places where power plants or coal mines have closed, people just leave,” Melton said. “It’s a lot of lip service to talk about retraining efforts.”
Rep. Hensen said the bill he sponsored differs from past retraining efforts in that it allows a committee comprised of local officials to advise the allocation of transition assistance funds.
"We are not trying to shut down power plants," he said. "We are trying to anticipate a problem and deal with it ahead of time."
Michelle Aguayo, a media relations representative for Xcel Energy, said the company has not made any recent announcements or filings related to closure dates for the Hayden Station.
Nonetheless, officials in Hayden have been discussing a contingency plan in preparation of such a closure. Most of those efforts include ways to diversify the town’s economy.
Mathew Mendisco, Hayden’s town manager, pointed to future expansion at Yampa Valley Regional Airport as a way to grow the town’s economy outside of the energy sector. He also voiced support for expanding hemp and cannabis cultivation in the town to bring in tax revenue.
Even with those efforts, filling a gap left by a multi-million dollar utility company would be difficult.
“I don’t think we’ll be ever to fully mitigate it,” Mendisco said.
He emphasized that much of the town’s future depends upon whether Xcel decommissions the power plant.
“It’s really just a bunch of unknowns right now,” he said.
Despite the uncertainties, Mendisco said Hayden needs to be prepared to make drastic changes in the coming years.
“Whatever the future holds, we need to work really hard,” he said. “We are certainly are not in favor of it, but at the same time, we don’t want to fight inevitability.”