Unit 1 at Craig coal plant in Colorado to be retired by end of 2025 under air deal

The owners of the coal-fired Craig Station – including PacifiCorp, Platte River Power Authority, Salt River Project, Tri-State Generation and Transmission Association and Public Service Co. of Colorado – have reached an agreement with the Colorado Department of Public Health and Environment, U.S. Environmental Protection Agency, WildEarth Guardians and the National Parks Conservation Association to revise the Colorado Visibility and Regional Haze State Implementation Plan (SIP).

Under the proposed revision, the 427-MW Craig Station Unit 1, which is part of a three-unit facility in Craig, Colorado, will be retired by Dec. 31, 2025. The unit will have more stringent limits on annual emissions beginning in 2020. The agreement only affects Unit 1 at Craig Station. Craig Station Unit 2 and Unit 3 will continue to operate and will have emissions controls in place to meet SIP requirements.

The SIP approved in 2014 required significant NOx reductions for Craig Station Unit 1 by August 2021. The owners reviewed several compliance options to meet the new standard, including installing additional emissions controls and switching fuels. They ltimately decided to seek an extension to the compliance deadline and unit retirement, rather than installing emissions controls. The decision to propose revising the SIP is driven by the state and federal regulatory environment for coal-based generation, current and forecasted market conditions, the significant costs to install additional emissions controls and the best interests of electric consumers.

“Tri-State has worked tirelessly to preserve our ability to responsibly use coal to produce reliable and affordable power, which makes the decision to retire a coal-fired generating unit all the more difficult,” said Mike McInnes, CEO of Tri-State, in a Sept. 1 statement. “We are not immune to the challenges that face coal-based electricity across the country.”

“Platte River continues to focus on diversifying our resource portfolio as part of our board-adopted Strategic Plan,” said Platte River Power Authority General Manager/CEO Jason Frisbie. “This agreement is an important step in that plan. The Yampa Project partnership is composed of electric utilities throughout the western region, and like Platte River all of our partners face challenges associated with balancing their future resource portfolios. Decommissioning a facility is a complex and impactful decision, and we appreciate Tri-State’s leadership as we work through this process.”

“We support this outcome and appreciate all of the parties coming together to reach an agreement that aligns with our commitment to the environment and to our customers,” said Cindy A. Crane, president and CEO of Rocky Mountain Power, which serves PacifiCorp’s customers in Utah, Wyoming and Idaho.

“Xcel Energy agreed with this approach. We appreciate Tri-State’s leadership as operator of the Craig Station and the work done by the joint owners to reach this outcome,” said David Eves, president, Xcel Energy-Colorado. PSCo is part of Xcel Energy (NYSE: XEL).

Several procedural steps are required to implement the terms of the agreement, including approval by the Colorado Air Quality Control Commission and the EPA.

The retirement will result in carbon dioxide emission reductions that the state of Colorado has set a goal to achieve and will help meet other proposed federal requirements.

Approximately 283 people work at the three-unit, 1,303-MW Craig Station. Craig Station Units 1 and 2 make up the Yampa Project, owned by PacifiCorp, Platte River Power Authority, Salt River Project, Tri-State and PSCo. Tri-State is the sole owner of Unit 3. Construction of Craig Station’s Unit 1 was completed in 1980.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.