This story appeared on BigPivots.com on June 30, 2025. We are sharing it in two parts. We also added introductory information from a PigPivots email blast, about two orders issued by the Department of Energy to prevent the closing of coal-fire plants.
A rumor on the street last week had the U.S. Department of Energy ordering Tri-State Generation and Transmission to keep operating the Craig, Colorado, station beyond scheduled closings. The first unit is scheduled to close later in 2025 with the other two to follow in 2027.
Not true, responded Lee Boughey, who heads the communications team at Tri-State.
“We have seen orders in other parts of the country to keep coal plants open,” he said, “and we are watching the outcome from those closely, given that Craig Unit 1 will retire at the end of the year.”
The backstory:
The Department of Energy in late May ordered a coal plant in Michigan that was scheduled to close within a few days to remain open. A week later it ordered an oil and gas plant in Pennsylvania to remain open beyond its imminent retirement.
The Federal Power Act allows the federal agency to order plants remain open because of extreme heat, hurricanes, and other acute weather emergencies. DOE has used that authority only a few dozen times since 1935, explained the New York Times.
What was the justification here? Very thin to non-existent, in the eyes of the Midcontinent Independent System Operators. MISO operates the grid across a large portion of the central United States and Manitoba.
Coal-burning for electrical generation is scheduled to end in Craig before New Year’s Day of 2028 arrives. Will a new gas plant arrive in 2029 to partially replace the lost generation.
Tri-State Generation and Transmission Association says it needs a 307-megawatt gas plant there to ensure electricity will be available for its members across its four-state service territory, but particularly western Colorado.
Three conservation groups argue strenuously that Tri-State can keep the lights on without the gas plant — and at a cost that is $288 million less and with fewer greenhouse gas emissions. They instead recommend more battery storage in lieu of the gas plant.
The Colorado Public Utilities Commission is scheduled to make a decision on July 10. However, the PUC commissioners must first decide whether to order Tri-State to conduct additional modeling, as the conservation groups want. New modeling, however, would take time.
“Time is of the essence,” Tri-State said in a PUC filing on June 25. It warned of “serious risk of cost escalation” if procurement of renewables is delayed, citing snarled supply chains and rising prices caused by the tariffs imposed on imports by President Donald Trump, and a reshaped tax landscape in the budget reconciliation bill now being debated in Congress.
For example, nearly all battery cells come from China. Many photovoltaic solar components also come from China. And the budget bill would strip tax credits for most renewable projects.
New gas plants have problems, too. Rising demand has caused lengthening wait times and higher prices. Companies that have not yet reserved the giant metal turbines now face waits of three or four years, about twice as long as just a year earlier, reported the New York Times in April. The report cited rapidly increasing demand from data centers.
“With demand for gas turbines reaching new heights and tariffs further threatening international supply chains, costs for new gas plants are soaring,” said a team from Boulder- and Basalt-based RMI in a June 18 report.
Colorado in the next five years will put coal in its rear-view mirror. The state got 80% of its electricity from coal combustion at the start of the 21st century. That had slipped to 60% in 2015. By the end of 2030, the state’s last coal plant, Comanche 3, located in Pueblo, will go silent.
All the state’s largest utilities are investing heavily in wind, solar, and lithium-ion batteries. They are also hedging their bets with new gas plants. Brighton-based United Power is in the lead. During July it will formally dedicate a new 162-megawatt gas plant about 45 miles northeast of downtown Denver. The electrical cooperative is currently exempt from PUC regulation.
Xcel Energy, like Tri-State, must gain approval of the PUC commissioners. In another case currently before the PUC, Xcel says it needs between 1,050 megawatts and 2,625 megawatts of new generation as it closes coal plants and gets ready for a massive increase in new demand, about two-thirds of it from data centers. How real is that projected demand? Question marks littered the testimony in recent hearings before the PUC.
Two other utilities, Platte River Power Authority and Colorado Springs Utilities, also plan new gas plants. And like United, they are also exempt from PUC regulation.
The dispute about the gas plant at Craig revolves around perceptions of risk and uncertainty. Reliability of electrical supplies remains paramount. How to achieve that without significant cost increases?
Long-distance transmission across multiple time zones and weather systems will help. That, however, is both expensive and usually takes a decade or longer.
Visually boring, banks of batteries have become integral parts of new energy resources. This is a battery bank owned by United Power located adjacent to a substation along Bromley Road in Brighton. Top: the Craig Generating Station. Photos/Allen Best
Reliable and affordable long-duration storage has become the holy grail in this energy transition. For example, Xcel Energy is partnering with Form Energy in an iron-air pilot project in Pueblo. This technology stores energy by essentially “rusting” iron during discharge and “unrusting” it during charging, making it a potential alternative to lithium-ion batteries for large-scale energy storage for up to 100 hours.
The difference this particular longer-duration technology will make in future needs is not clear. Xcel certainly is not betting its future on an outcome. It wants natural gas, too.
As for Tri-State, it views a gas plant as having 95% reliability compared to 50% for renewables. It frets that it has no experience with battery storage, although in any scenario it will soon have many of them in various parts of Colorado and New Mexico.
The question then becomes, in part, whether to delay expensive investments in a new natural gas plant for a couple years to see what new technological wrinkles may make that investment unnecessary.
Tri-State 15 years ago remained heavily dusted with coal. As former Gov. Bill Ritter noted at a recent event, Tri-State’s leaders then fervently believed their future lay in coal forevermore. It’s a substantially different utility now. It will retire the first of the three units at Craig by the end of 2025 with the remaining two in 2027. It owns another unit in Arizona, at Springerville, which it will close in 2030. After that, it will own just one coal-burning unit at the Laramie River Station in Wyoming.
Allen Best publishes the e-journal Big Pivots, which chronicles the energy transition in Colorado and beyond.