Moffat County and the city of Craig are in line for $70 million in aid from the utility shuttering the local power plant and the coal mines that supply it, under a settlement filed with the Colorado Public Utilities Commission.
Tri-State, which provides wholesale power to 41 rural electric cooperatives in four states, also agreed to locate a new natural gas-fired unit in Moffat County and transfer a water storage right to the county.
“This community assistance agreement is a win for our community now and into the future,” Moffat County Commissioner Melody Villard said in an email.
The settlement, part of Tri-State’s Electric Resource Plan, must still be approved by the PUC. The electric resource plan lays out the utility’s proposal for developing the resources to meet future electricity demand.
The Colorado Office of Just Transition asked the PUC to include $118 million in property tax and employment relief in the plan and Moffat County filed commission testimony seeking $110 million.
Tri-State maintained it was not required to include a community aid plan in its ERP, but would provide a community aid plan early next year.
Through negotiations state and local officials and Tri-State reached a deal. Craig, Moffat County, the Office of Just Transition and the Colorado Office of Utility Consumer Advocate, which had called for Tri-State community aid, have signed onto the settlement.
“We will continue to work with our employees, the City of Craig and Moffat County for years to come,” Tri-State CEO Duane Highley said in a statement.
The closure of the 1,285-megawatt Craig Station in 2028 and the two local mines, including the Tri-State owned Colowyo, that supply the power plant will leave a large hole in the region’s taxbase and jobs. The only customer of the nearby Trapper mine is Craig station.
In 2023, the power plant and mines provided 43% of property tax revenues for the county and accounted for 437 high-paying jobs. They also contribute $321 million to the regional gross domestic product, according to a Colorado Mesa University study.
Colorado is committed to closing its coal-fired power plants as part of its greenhouse gas reduction goal to cut emissions from 2005 levels 50% by 2030 and 90% by 2050. Under the plan, utilities are required to slash emissions by 80% by 2030.
“The settlement is a victory for two reasons: it moves the state’s decarbonization goals forward and it does it in a way that honors the coal community that provided cheap reliable power for its co-ops for years,” said Joseph Periera, deputy director of the start Office of Utility Consumer Advocate.
Tri-State has agreed to put $5.5 million a year into an economic development fund between 2026 and 2029, for a total of $22 million. The association will also pay up to $48 million in “back-stop” funding to help offset taxes between 2028 and 2038.
The “back-stop” contribution could be reduced by state or federal aid received by the county or city.
Faced with plans to close all coal-fired power plants by 2030, 2019 legislation created the Office of Just Transition to help coal communities navigate the loss of mines and power plants. It appropriated $30 million to the effort.
Craig and Moffat County are slated to get at least a third of the Office of Just Transition funds.
“The direct benefit community assistance coupled with any additional cash payments has the ability to set a fund that Craig and Moffat County can use to spur economic diversification,” Villard said.
Tri-State also agreed to solicit bids for a natural gas-fired plant in Moffat County and the city and county agreed to support the association’s effort to build the unit.
Moffat County wanted Tri-State to transfer its Yampa River water rights, used for cooling the power plant. The association agreed to part of that request and will transfer storage water rights from Elkhead Reservoir to the county after all three Craig units are closed.
“Tri-State really stepped up to the plate with this community assistance package for Moffat County and Craig as they undertake a challenging transition,” Wade Buchanan, Office of Just Transition director, said in a statement. “This agreement sets a high standard for community assistance elsewhere in Colorado and around the country.