The Colorado Public Utilities Commission has verbally ordered Xcel Energy to eventually transfer ownership of three physical assets to Routt County governments, according to a statement from county commissioners.

“While we are disappointed with the PUC’s approach to several key aspects of the transition, we do expect the final order to include some positive outcomes,” stated Sonja Macys, chair of the county commissioners. “These include the preservation and dedication of assets that benefit the broader community, such as the rail spur, water rights and the Pumphouse property, an important access point for residents and visitors to the Yampa River.”

The rail spur that leads to the Hayden Generating Station — stopping and looping through Xcel property — would be transferred after it is no longer in use by Xcel, Hayden Town Manager Mathew Mendisco said. The town manager discussed the status of the Just Transition program, designed to support communities where coal plants are retiring, during a Sept. 4 Hayden Town Council meeting with county commissioners Macys and Tim Redmond in attendance.

The Pumphouse property is reportedly owned by Xcel, and a Colorado Parks & Wildlife spokesperson said CPW owns the parking lot and boat ramp.

The water rights transfer is expected to happen after 2050. That timing is due to a change in state law approved in May 2024. While current Colorado law stipulates that a water right can be considered abandoned after 10 years of nonuse, Senate Bill 24-197 changed the law in the specific case of electric utilities that own a water right in state water Division 6, including the Hayden Station, to allow the plant to keep its water rights through 2050.

“The conditional water right may be used to support a specific project or potential future generation technologies or concepts that have the potential to advance progress toward Colorado’s clean energy and greenhouse gas emission reduction goals,” according to SB 24-197.

Aside from the eventual transfer of the three assets, the county commissioners remain opposed to the current financial compensation package proposed in the Just Transition Solicitation. Xcel Energy previously agreed during an Electric Resource Plan process conducted in 2021 to six years of property tax replacement after coal operations are retired, while Routt County and Hayden leaders in April asked for a larger contribution of 10 years of financial support calculated at $89 million.

“We are extremely disappointed that the PUC did not seriously consider the request that we made for 10 years of replacement property tax revenue,” Macys said in an email Friday.

Coal-fired operations at Hayden Station are set to retire by the end of 2028, and discussions continue as to what type of energy generation may happen on the site after 2028.

Mendisco said the PUC maintaining the six years of property-tax financial compensation agreement was “really, really unfortunate news.”

“If the PUC sticks to the six years with no economic adjustments as proposed by Routt County governments, we plan to file an official appeal to the PUC to ask them to re-look at the issues,” Mendisco said Wednesday.

Mendisco said taxing districts in western Routt County for fire, library, school and cemetery services “will be the most impacted by this poor decision the PUC has contemplated making.”

“West Routt County has roughly a population of 2,800 people if you include everyone in Hayden and the unincorporated areas,” Mendisco said. “The PUC seems to think that other communities around the state, such as Pueblo and Craig, should receive 10 years of property-tax backfill, except the smallest area in the state that has the fewest resources to transition, which is Hayden/West Routt County.”

“The Just Transition Office, Colorado Energy Office and Consumer Advocacy Office all testified that Hayden/Routt County should be treated equally; indications from the PUC would say otherwise,” Mendisco said. “The town of Hayden feels the PUC was directed by the state through the Just Transition legislation to make this a fair and just process. Anything that is short of what others around the state are receiving is simply wrong, and certainly not ‘just.'”

Mendisco said the town “will continue to strive to mitigate the loss of Hayden Station through economic development efforts.”

PUC Spokesperson Megan Castle said the final written decision is expected “in the coming weeks now that deliberations are complete.” Castle said interested individuals can listen to the state commission deliberations on the Just Transition Solicitation process on the PUC YouTube page at https://tinyurl.com/daac5vz7.

“We have serious concerns that the outcome will fall short of meeting the needs of Routt County residents,” Macys said. “We believe this limited focus does not adequately reflect the intent, or potentially the mandate, outlined by the state legislature in 19-1314, which established a ‘moral commitment to assist the workers and communities that have powered Colorado for generations’ by supporting ‘a just and inclusive transition’ away from coal.”

The county commissioners’ statement this week reiterated that the current level of funding offered “would have significant negative consequences for Routt County, the town of Hayden and numerous special districts, including fire protection, school districts, libraries and cemeteries.”

“We will continue to review and assess the final order once issued and remain committed to advocating for a truly just transition that fully supports our community, local governments and special districts during this critical period of economic transformation,” according to the county commissioners’ statement.

The PUC recently completed deliberations for the first phase of the Xcel Energy Just Transition Solicitation Electric Resource Plan Phase 1 that included a proposal for how much energy Xcel will need to build or acquire to serve its customers through the next five years. The commission approved a plan that may result in the acquisition of more than 6,000 MW of new generation, a level that would make it the largest acquisition ever approved by the commission, according to a PUC media release.

The Just Transition Solicitation is among the largest cases heard by the commission, with 24 organizations or parties intervening in the case, according to the release. The commission received hundreds of public comments in writing and during four public comment hearings, including a May 1 hearing in Hayden.