By Shannon Lukens.

A Settlement Agreement has been reached for a long-time partnership between Tri-State Generation and Transmission, with Moffat County and the City of Craig.

One part of the settlement is that the communities will receive $22 million dollars, as a direct benefit for the Community Economic Development Trust Fund. That money will come in payments of $5.5 million a year, from 2026-2029.

A second part of the settlement is $7 million a year in “backstop” payments. These are minimum payments of property tax revenues up to $48 million through 2038. If Tri-State provides resources that help the local economy, those payments can be offset.

The third part of the agreement involves water rights for the Lower Yampa River Augmentation Plan.

Craig and Moffat County are expected to lose significant property tax revenue with the impending closing of the Tri-State, Trapper, and Colowyo mines. Tri-State’s preferred plan includes the accelerated retirement of Craig Unit 3 by Jan. 1, 2028.

Craig City Manager Peter Brixius explains the settlement and what it means to the community.

 

 

Press Release from Moffat County Board of County Commissioners and the City of Craig.

Thursday, June 27, 2024 — For Immediate Release

 

Moffat County and City of Craig to Receive $22 Million Direct Benefit for Community Economic Development Trust Fund, Minimum Payments of Property Tax Revenues up to $48 Million, and Water Rights for the Lower Yampa River Augmentation Plan from Tri-State Generation & Transmission as Part of Craig Station Closure Settlement Agreement

Since January, Moffat County and the City of Craig (the Communities) have been participating in Tri-State’s 2023 Electric Resource Plan (ERP) proceeding before the Colorado Public Utilities Commission (Commission) to help ensure that strong community assistance opportunities stemming from the accelerated closure of Craig Station and Craig Unit 3 were addressed in the proceeding. The Settlement Agreement filed with the Commission today forges a new long-term partnership between the Communities and Tri-State.

As part of a comprehensive resolution between the majority of parties in the Tri-State’s Phase I ERP, Moffat County and the City of Craig will receive $22 million in direct benefit payments for a Community Economic Development Trust Fund between 2026 and 2029, Minimum Backstop Property Tax Revenue Payments of up to $48 million between 2028 and 2038 with specified reduction offsets, and water rights for Moffat County’s Lower Yampa River Augmentation Plan. Tri-State also commits to soliciting bids only in Moffat County for a new natural gas power plant. As part of the Phase I Settlement Agreement and keeping in line with Tri-State’s December 2023 application for approval of its ERP, Tri-State’s preferred plan includes the accelerated retirement of Craig Unit 3 by an additional two years, by January 1, 2028.

Craig Mayor Chris Nichols notes that, “The energy industry is pivotal to our local economy and makes up such a large component of our tax base. We are pleased that the commitments contained within the Settlement Agreement represent Tri-State’s reinvestment in the community that has anchored Craig Station for decades.”
District 2 County Commissioner Melody Villard shares, “It would be hard to overstate how truly groundbreaking this agreement is. The commitments made by Tri-State ensure that the Communities are not left behind in the energy transition. We will now have reliable, long-term resources to drive our own transition and determine the trajectory of Moffat County’s economy after coal. We are excited to continue to partner together as Tri-State is incentivized to bring new energy resources and jobs to Moffat County following the closure of Craig Station.”

The Settlement Agreement commitments made by Tri-State provide robust and meaningful economic commitments towards community assistance. The Colorado communities of Hayden (Routt County), Pueblo, Morgan County, and Nucla (Montrose County) have received community assistance commitments following the closures of their local coal plants, but Moffat County and the City of Craig are the first coal communities in the State to have direct benefit funding dedicated to an economic development fund which allows the Communities to invest in projects in perpetuity. Craig and Moffat County Elected Officials will now work together to
create the fund and determine how to best structure proper management of the fund to benefit the community in the long term.

The Communities are appreciative of Tri-State’s commitment to respond to the Communities’ priorities and look forward to continuing to partner with Tri-State as they navigate the energy transition together.

District 2 County Commissioner Melody Villard notes, “While this settlement will never make the community whole with the loss of Craig Station jobs and taxes, the commitments from Tri-State are a positive step forward in assisting the Communities’ plan for a promising future.”

Public Comment Hearing

Even though a comprehensive solution has been reached, it is anticipated that the Public Utilities Commission will still hold an in-person public comment hearing in Craig, CO on July 9, 2024 from 3-7 p.m. at the Moffat County High School Auditorium, 900 Finley Lane Craig, CO. Please note that the hearing would conclude upon completion of public comments, but no earlier than 6:30 p.m. A virtual public comment hearing will be held on July 11, 2024 from 4:00pm – 7:00pm. Additional information on both public comment opportunities, will be provided by the Communities.

The Communities
Moffat County, Colorado, legally formed in 1911, occupies the northwest corner of Colorado and is the second-largest county by area in the state. Trapper Coal Mine, Colowyo Coal Mine, and Craig Station are located in Moffat County and are some of the County’s largest employers and taxpayers.

The City of Craig, Colorado is a legally created, established, organized, and existing home rule municipal corporation under Article XX of the Constitution of the State of Colorado and the Home Rule Charter of the City of Craig. The City of Craig is the county seat within Moffat County and much of the coal workforce resides within the City.

The coal industry is one of the largest economic drivers in Northwest Colorado. Since 1979, Moffat County and the City of Craig and its citizens received significant ad valorem property tax, severance and federal mineral lease tax which provide funding to the Energy Impact Assistance Fund and State Public School Fund, employment wages, local taxing districts, and other revenues generated by Craig Station, and Trapper and Colowyo mines and will lose significant property tax revenues due to the closure of Craig Station, and Trapper and Colowyo mines. The Communities estimate that the closure of Craig Station along with the two coal mines will result in a 44 – 47% loss of tax revenue to its local taxing districts.

 

 

Press Release from Tri-State; June 27, 2024.

Tri-State advances transformative electric resource plan with unopposed settlement filing

• Electric Resource Plan seeks 1,250 megawatts of new renewable and energy storage resources.
• Settlement includes assistance for northwest Colorado coal communities.
• 16 intervening parties join settlement; 14 do not oppose the settlement.
• With Colorado Public Utilities Commission approval, Tri-State will initiate the second phase of electric resource planning process, including procurement of a balance of dispatchable, renewable and storage projects.

(June 27, 2024, Westminster, Colo.) In an important milestone in its energy transition, not-for-profit wholesale power supplier Tri-State Generation and Transmission Association filed an unopposed comprehensive settlement of Phase I of its 2023 Electric Resource Plan (“ERP”) with the Colorado Public Utilities Commission (“CPUC”). If approved by the CPUC, Tri-State will begin the procurement process for new resources, leading to an 89% reduction in its greenhouse gas emissions in Colorado and 70% clean energy used by its members systemwide in 2030.

“With the engagement of our members and stakeholders, Tri-State is advancing our transformative resource plan, preserving reliable, affordable and responsible power for our members, and helping meet the needs of transitioning communities in northwest Colorado,” said Duane Highley, chief executive officer of Tri-State. “We thank all who were involved in the settlement, and we look forward to working together to implement the plan.”

The settlement resolves all issues raised by intervening parties in Phase I of the ERP and provides for updates related to the scope of Phase II procurement, bid evaluation and portfolio modeling, and adds a demand response target for Colorado load in 2030.

Settlement includes assistance for northwest Colorado coal communities

Among the provisions in the settlement are the terms of community assistance from Tri-State to support northwest Colorado communities as Craig Station, which Tri-State operates, retires its three generating units between 2025 and 2028.

“The energy industry is pivotal to our local economy and makes up such a large component of our tax base,” said Craig Mayor Chris Nichols. “We are pleased that the commitments contained within the Settlement Agreement represent Tri-State’s reinvestment in the community that has anchored Craig Station for decades.”

“It would be hard to overstate how truly groundbreaking this agreement is,” said Moffat County Commissioner Melody Villard. “The commitments made by Tri-State ensure that the communities are not left behind in the energy transition. We will now have reliable long-term resources to drive our own transition and determine the trajectory of Moffat County’s economy after coal. We are excited to continue to partner together as Tri-State is incentivized to bring new energy resources and jobs to Moffat County following the closure of Craig Station.”

Community assistance for northwest Colorado includes $22 million in direct benefit to the community between 2026 and 2029, with other anticipated investments providing $48 million in additional benefit to the community between 2028 and 2038. As part of the settlement, Tri-State will only solicit bids for a new natural gas power plant build in Moffat County, in alignment with Tri-State’s siting study results. Tri-State also has purchased a 145-megawatt solar project under development in Moffat County to be online in late 2025.

“We will continue to work with our employees, the City of Craig and Moffat County for years to come,” said Highley.

Tri-State advancing electric resource plan to benefit members

The settlement agreement continues to align with Tri-State’s application for funding under the U.S. Department of Agriculture’s (USDA’s) New ERA Program. Tri-State’s preferred plan would significantly reduce greenhouse gas emissions, including an 89% reduction in greenhouse gas emissions associated with Colorado electricity sales by 2030, relative to a 2005 baseline. Under the preferred plan, Tri-State would seek 1,250 megawatts of renewable resources and energy storage between 2026 and 2031.

Notably, Tri-State’s preferred plan would deliver competitive wholesale rates to Tri-State’s members and meet both industry standard reliability metrics and Tri-State’s heightened “Level II” reliability metrics, which assess electric system resilience in extreme summer and winter weather conditions.

“Enhanced power reliability for rural communities remains central to Tri-State’s resource planning,” said Dennis Herman, general manager of Tri-State member Highline Electric Association (Holyoke, Colo.), “Tri-State’s preferred plan adds significant renewable resources while demonstrating how to deliver reliable power to its members, even in extreme weather events.”

16 intervening parties join settlement; 14 do not oppose the settlement

“With an 89% percent reduction in emissions from electricity generation, Tri-State’s resource planning shows that it’s possible to not only meet, but exceed the required 80% emissions reduction through cost-effective clean energy sources and storage,” said Colorado Energy Office Executive Director Will Toor. “This is an important next step in Colorado’s clean energy transition, helping us achieve our climate goals while improving air quality, stabilizing energy costs, and creating long-term, good-paying jobs in local communities.”

“Sierra Club is proud to join a settlement that paves the way toward replacing coal with cleaner energy resources while also saving customers money,” said Robin Everett, deputy campaign director for Sierra Club’s Beyond Coal Campaign. “We applaud Tri-State’s commitments to support the communities of Craig and Moffat County in the energy transition. We hope that USDA views this settlement as yet another reason to fund Tri-State’s ambitious New ERA application.”

“Tri-State really stepped up to the plate with this community assistance package for Moffat County and Craig as they undertake a challenging transition,” said Wade Buchanan, director, Colorado Office of Just Transition. “This agreement sets a high standard for community assistance elsewhere in Colorado and around the country.”

“Colorado Independent Energy Association is pleased to support this settlement agreement that will expand and promote competition in Colorado’s vibrant renewable energy industry to benefit Tri-State’s members,” said Mark Detsky, attorney for the organization.

Sixteen Tri-State members and stakeholders support the settlement, including Tri-State members Highline Electric Association, Poudre Valley Rural Electric Association and Y-W Electric Association; state agencies including the Colorado Energy Office, Trial Staff of the Colorado Public Utilities Commission, Office of Just Transition, and Office of the Utility Consumer Advocate; Moffat County and the City of Craig; environmental organizations including Natural Resource Defense Council, Sierra Club and Western Resource Advocates; and developer associations including Colorado Independent Energy Association, Colorado Solar and Storage Association, Interwest Energy Alliance and Solar Energy Industries Association. Fourteen intervening Tri-State members did not oppose the settlement.

Tri-State’s ERP process occurs in two phases. In Phase I, Tri-State collaborates with stakeholders, prepares modeling assumptions and scenarios, and models generic resources to arrive at a preferred plan that represents the most affordable resource mix, while respecting reliability metrics and environmental and transmission constraints. The Phase I proceeding includes the involvement of intervening parties on discovery, testimony, and, if needed, a hearing which leads to a CPUC decision on the preferred plan along with guidance for Phase II of the ERP.  In some cases, parties reach a settlement agreement to collaboratively address the resource plan without need for a hearing. Tri-State anticipates a decision from the CPUC on the Phase I settlement agreement by mid-September.

In Phase II, Tri-State will issue requests for proposals seeking bids for new dispatchable, renewable, and storage resources. Bids are then evaluated through screening processes and selected through portfolio modeling. Tri-State will move to acquire the resources selected in our Phase II preferred portfolio once CPUC approval is received.

About Tri-State

Tri-State is a power supply cooperative, operating on a not-for-profit basis, serving electric distribution cooperatives and public power district members in four states. Together with our member-owners, we deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. For more information about Tri-State, visit www.tristate.coop.