Tri-State outlines preliminary plans for Unit 1 transition at community meeting in Craig
CEO Mike McInnes speaks with community about developing teams address various concerns
September 15, 2016
Tri-State and Generation Transmission Association's CEO Mike McInnes was in Craig Thursday night to address the community regarding the scheduled retirement of Craig Station's Unit 1 by 2025.
McInnes told the crowd of roughly 150 people 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 the Unit's owner, the Yampa Project, asked Tri-State, the plant's operator, to evaluate alternatives to installing costly emission controls for meeting a state regulatory requirement.
"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, McInnes said.
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"It became very apparent that was not only an expensive venture, but with that ambiguity in the future, they just could not … do that," he said.
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.
"It was a hard decision to make," McInnes said. "We have been upgrading the unit, we have been making it more efficient each year."
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."
Unit 2, which is also owned by the Yampa Project, and Unit 3, which is owned by Tri-State, will continue to operate as normal.
McInnes said the goal in negotiating the agreement was to provide Craig and Moffat County with ample time to plan for the retirement and transition.
"My main focus was to try and extend, to the extent possible, the amount of time that both our employees and you as a community would have to make that transition," 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, McInnes said.
With this challenge ahead, McInnes said he predicts additional battles ahead and asked the community to stay strong.
"Over the years there have been many challenges — some of them large some of them small — and we could always count on you," he said.
Craig City Councilman Joe Bird said he knows the residents of Craig and Moffat County are up to the task.
"I don't think you could be in a stronger community the way we rally together," he said.
In addition to members of Craig City Council and the Board of Moffat County Commissioners, Colorado District 8 Sen. Randy Baumgardner and representatives of Gov. John Hickenlooper, U.S. Rep. Scott Tipton and U.S. Sen. Michael Bennet attended the meeting, which was held at Moffat County High School.
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.
The Colorado Department of Health and Environment 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."
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.
According to Tri-State, approximately 283 people work at Craig Station and the plant is capable of producing 1,303 megawatts.
Contact Patrick Kelly at 970-875-1795 or Contact Patrick Kelly at 970-875-1795 or pkelly@CraigDailyPress.com or follow him on Twitter @M_PKelly.Contact Patrick Kelly at 970-875-1795 or pkelly@CraigDailyPress.com or follow him on Twitter @M_PKelly.