Sierra Club, Tri-State, and other parties filed a settlement agreement that would retire nearly 900 MW of Tri-State’s coal units while providing up to $70 million to fund economic development in impacted communities. In the settlement, Tri-State agrees to move up the retirement of the 448 MW Craig Unit 3 by two years, to January 1, 2028, and to retire the 419 MW Springerville Unit 3 in Arizona by September 15, 2031. Prior to this settlement, Tri-State had proposed to operate Springerville Unit 3 indefinitely, as Springerville Unit 3 was one of the last coal units built in the West, coming online in 2006.
Sierra Club’s persistent state-based litigation and organizing, and national legislative advocacy, were instrumental to this outcome. Attorneys from Sierra Club’s Environmental Law Program (ELP) demonstrated that Craig Unit 3 and Springerville Unit 3 are uneconomic and should be retired early, and ELP negotiated the provision in Tri-State’s 2020 resource plan that required Tri-State to analyze the economics of Springerville Unit 3 in its next resource plan. In its 2020 resource plan, Tri-State asked the Colorado PUC to lock in a December 31, 2029 retirement date for Craig Unit 3. Sierra Club’s testimony showing that it would reduce costs to retire Craig Unit 3 earlier than the end of 2029 convinced the PUC to reject Tri-State’s proposal to retire Craig Unit 3 at the end of 2029 and instead decide the retirement date in the 2023 resource plan–which set up the victory here.
The settlement was also made possible by Tri-State’s expectation that USDA will approve Tri-State’s application for the New ERA program, a provision of the Inflation Reduction Act which funds rural energy cooperatives to transition to cleaner energy sources. Sierra Club joined forces with Tri-State and other rural electric cooperatives to lobby for the New ERA program and Sierra Club has supported Tri-State’s application for New ERA funding. The Tri-State settlement provides a model that should help persuade other utilities to use New ERA funding to retire and replace coal with clean energy and storage.
The agreement will also assist the communities most impacted by coal retirements. In the near term, Tri-State will provide $22 million in direct payments to Craig and Moffat County, where the Craig coal plant is located, to establish an economic development fund. Tri-State will provide up to an additional $48 million to Craig and Moffat County through 2038, transfer certain water rights to Moffat County, and prioritize locating replacement resources in Moffat County.
ELP attorney Matthew Gerhart represented Sierra Club in the litigation and settlement negotiations, with support from ELP litigation assistants Emma Szymanski and Maddie Lipscomb. Sierra Club staff, including Jeremy Fisher, Jonathan Levenshus, Patrick Drupp, and Sierra Club alumnus John Coequyt, worked with members of Congress to develop and secure passage of the provisions in the Inflation Reduction Act that became the New ERA program. And our team, including Jeremy, Jonathan, and ELP attorneys Megan Waschpress and Kristin Henry fought to ensure that New ERA was then implemented in such a way that we could secure important wins like this.