The disposition of the 750+ MW Unit 3 coal plant in Pueblo and associated cost-recovery and community and worker transition issues are VERY LARGE agenda items for Colorado in 2021 and beyond…. It is critical that we both stop burning coal AND help the Pueblo community through the transition! Xcel made the mistake of building this plant (and having a very poor operating record). Xcel should bear a large portion of the responsibility for this large and expensive mistake in our state.
Pueblo Chieftain. https://www.chieftain.com/story/opinion/columns/guest/2021/04/23/op-ed-coal-burning-isnt-great-pueblos-future-xcel-comanche-3/7353232002/, Leslie Glustrom
Let me be clear. I stand in strong support of the Pueblo community and the bright future that I believe you are on track for. It is highly unlikely, however, that attempting to burn coal at Pueblo Unit 3 (a.k.a. “Comanche 3”) for another 19 years will be a successful strategy.
In short, the US coal industry is in structural decline and Xcel or anyone else who suggests that coal will just “fall out of the sky” until 2040 is not paying attention.
Knowledge is power. Facts matter. Here are a few facts to consider.
First of all, there is no indication that the Comanche people (the Nermernuh or Nʉmʉnʉʉ) were consulted or would want a coal plant named after them, so I will refer to the plant as Pueblo Unit 3.
The large surface mines in Wyoming that provide coal to the Pueblo plants, including Pueblo Unit 3, are playing out and are quickly becoming defined by their large reclamation obligations rather than by the value of the remaining coal.
For many years the Pueblo coal plants were supplied by the Belle Ayr mine in the Powder River Basin (PRB) south of Gillette in northeast Wyoming. The Belle Ayr mine is now largely depleted and has changed hands at least four times in the 2000s. The last two times the Belle Ayr mine changed hands, the seller paid the buyer to take the mine. Yes — the seller paid the buyer – because the buyer was, in theory, assuming the very large reclamation obligations for the mine.
Recently, Xcel has turned to the Black Thunder mine in Wyoming for much of the coal used in Pueblo. The Black Thunder mine is also being rapidly depleted. Moreover, the owner of the Black Thunder mine, Arch Resources, has said they want to get out of mining coal in Wyoming. Consequently, the Black Thunder coal mine is not likely to be a reliable source for the Pueblo coal plants either.
There are other coal mines in the Powder River Basin but they all face challenging geology and a troubled financial future. Mines in other areas of the United States are also playing out and are generally not profitable as witnessed by the flood of bankruptcies that have engulfed the US coal industry in recent years.
In short, advocating for burning coal to secure Pueblo’s future and provide tax revenues for the next 19 years is not a strategy that is likely to work due to coal supply issues — independent of all the moral and environmental reasons to stop burning coal as quickly as we can.
I don’t favor a coal-dependent strategy for Pueblo, but I stand in strong support of Pueblo receiving transition funding from Xcel. There are many ways this could be done.
As one example, Xcel in Colorado (Public Service Company of Colorado) reported $588 million in after-tax net income in 2020. If Xcel were to pay the approximately $17 million in property taxes that Pueblo is receiving from Pueblo Unit 3, they could still have over $570 million in profit left over. That is way more than adequate!
A scheme could be worked out to phase out transition payments over the next 10-20 years, including reducing payments when Pueblo receives property taxes from new solar developments while Pueblo learns to budget for the post-coal era.
Solar developers are clamoring to build solar projects in the Pueblo area (ask Xcel to see “JFH-5 in 21A-0096E” to see a map). Pueblo has the solar resource and the transmission capacity. That is a golden combination — in all senses of the word!
Clearly there are ways to help Pueblo through the transition that don’t require advocating to burn coal for another 19 years!
The problem with elected officials trying to protect property tax revenues by burning coal for another 19 years is that it is highly unlikely to work. Full stop. Under a coal-dependent strategy, Pueblo will be left with a much-shortened time frame to plan and budget for the post-fossil fuel era.
We’ve seen the effects of blind reliance on coal in the Powder River Basin communities of Wyoming. It isn’t a pretty sight — and certainly not something I would want for the community of Pueblo which I care deeply about!
Pueblo has already positioned itself to be the renewable energy capitol of Colorado. The Pueblo community deserves tremendous credit for this accomplishment and for the great civic pride that is now apparent to anyone who visits your City! Kudos! Keep going!
Don’t drive backwards into the future — it doesn’t work well! Don’t rely on the false promise of endless supplies of coal. They won’t show up. Negotiate with Xcel from a strong base of knowledge. Keep looking to the sun and wind and 21st century solutions for your community.
Pueblo’s future is bright indeed as long as you keep looking forward. I believe all of Colorado is cheering you on!
Leslie Glustrom is a Senior Advisor to Clean Energy Action which is based in Boulder and which works throughout Colorado and the US to accelerate the transition to the post-fossil fuel world.