The Energy Blend: Unit 1 — now set for retirement — burns 5,000 tons of coal a day | CraigDailyPress.com

The Energy Blend: Unit 1 — now set for retirement — burns 5,000 tons of coal a day

Patrick Kelly

By 2035 exhaust will no longer billow from Unit 1's stack, left, as the coal-fired generating unit is scheduled for retirement to meet state haze regulations.

Since its completion in 1980, Craig Station's 427-megawatt Unit 1 has burned coal to "keep the lights on."

Unit 1 alone combusts an average of 5,000 tons of coal each day and is one of three generating units at the 1,303-megawatt coal-fired power plant located just south of Craig in Moffat County, which burns about 1.5 million tons of coal every year.

But at the beginning of September, Tri-State Generation and Transmission Association, the station's operator, announced that Unit 1 would be retired by the end of 2025.

The news was upsetting for residents of Craig and Moffat County, who were still reeling from a 2015 court decision that had threatened to close two local coal mines.

Craig Station employs about 283 people and Tri-State was Moffat County's top tax contributor in 2015, paying $6.2 million — nearly triple the amount collected from the number-two taxpayer.

One might think that closing one of three units at Craig Station would mean a third of the jobs would be lost.

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Tri-State Generation and Transmission Association spokesman Lee Boughey said how the retirement affects the plant's workforce is something the transition teams would need to assess.

"We have shared facilities there between the three units so it is going to take some analysis to understand what impacts closing Unit 1 will have on the workforce given the shared nature of those facilities," he said.

The closing of Craig Station's Unit 1 by 2025 may also affect the two Northwest Colorado coal mines that supply its coal.

"Once Unit 1 is retired, Craig Station will burn less coal to produce electricity," Boughey said. "As we go forward we will be evaluating the impacts that could have on the mines that supply the plant."

The 1,303-megawatt Craig Station receives all of its coal from two nearby mines just outside of Craig in Moffat County — Trapper Mine and Colowyo Mine.

Unit 1 gets 85 percent of its coal from Trapper, and it gets the remaining coal on the spot market. Unit 2 also gets 85 percent of its coal from Trapper. Unit 3's coal comes from Colowyo.

Trapper Mine Manager Jim Mattern said Trapper is contracted to provide coal to Craig Station through 2020, and it has additional reserves ready for development.

"It's going to be business as usual for us for the next few years, and we do have reserves that would take us beyond that date," he said.

Mattern said Trapper would be working with Tri-State throughout the process but it is sticking to the routine in the meantime.

"We're going to continue doing what we do best and that's just mine coal," he said.

By the end of the year Tri-State hopes to have three types of transition teams put in place — employee, community and decommissioning — and a transition manager to act as liaison.

The employee and community transition teams will assist the affected plant workers and their communities while the decommissioning team will continue to evaluate the future of Unit 1 and alternatives for decommissioning.

The same agreement shutting down Craig Station's Unit 1 will also close Tri-State's coal-fired Nucla Station by 2022 and cease coal production at New Horizon Mine.

In total, the agreement retires 520 megawatts of coal-fired electricity generation and would lead to an "annual reductions of millions of tons of air pollution, including pollutants that contribute to unhealthy ozone formation, emissions that can affect visibility in national and state parks and wilderness areas, and greenhouse gases that contribute to climate change," according to the Colorado Department of Health and Environment.

In Moffat County, all of the top 10 tax contributors are energy related and the community is passionate about its resources and industry.

In the wake of the announcement about Unit 1, Tri-State hosted a community meeting in Craig on Sept. 15 with CEO Mike McInnes to answer the community's questions and address concerns.

McInnes told the crowd of roughly 150 attendees he wouldn't try to spin the situation as positive, but it turned out much better than he had hoped.

"I hope over time as the pain, as the anger goes away that will be apparent to you as well," he said.

The decision to close the 427-megawatt generating unit came after Unit 1's owner, the Yampa Project, asked Tri-State to evaluate alternatives to installing costly nitrogen oxide emission controls mandated by state regulations.

"We looked at the gambit," McInnes said. "We looked at switching fuels, we looked at other control possibilities, we took a look at everything we could to reduce the cost and still keep the unit operating under these new conditions."

But at the end of the evaluation no alternatives could justify the expense in the face of an increasingly harsh regulatory environment, unfavorable market conditions and need for even more emission controls in the future.

Instead, as part of a proposed revision to the Colorado Visibility and Regional Haze State Implementation Plan (SIP), Tri-State entered into an agreement that will reduce the unit's production starting in 2020 and put it completely out of commission by Dec. 31, 2025, in exchange for not placing any new controls.

McInnes said Tri-State could not overcome the obstacles facing Unit 1, but it had not turned its back on coal.

"We will be supportive of the coal industry," he said. "We will be fighting against unneeded regulation — all in an effort to deliver reliable and affordable power to our members."

Retiring the unit was an agreement between Tri-State, PacifiCorp, Platte River Power Authority, Salt River Project, Public Service Company Colorado and the Colorado Department of Public Health and Environment, U.S. Environmental Protection Agency, WildEarth Guardians and the National Park Conservation Association.

Unit 2 and Unit 3 will continue to burn but additional emissions controls to meet the SIP are being installed.

WildEarth Guardians’ Climate and Energy Program Director Jeremy Nichols said the shutdown is indicative of the coal industry's overall decline.

"The writing on the wall is that the future for coal is really bleak," he said. "This is a very concrete example of where things are going."

The CDPHE stated in a news release that the agreement would lead to an "annual reductions of millions of tons of air pollution, including pollutants that contribute to unhealthy ozone formation, emissions that can affect visibility in national and state parks and wilderness areas, and greenhouse gases that contribute to climate change."