Tri-State accelerates clean energy transition and bolsters electric system reliability

• Electric system resilience and reduced costs at heart of ambitious resource plan.
• 1,250 megawatts of additional renewables and battery storage to be procured through 2031.
• Increased operations costs and reduced member loads drive retirement of Craig Station in 2028; with federal funding, Springerville Station Unit 3 to retire in 2031.
• Stakeholders endorse planned New ERA award acquisitions that drive emissions reductions, clean energy.

Rural electricity consumers across four western states will benefit from reliable power and lower costs, with clean energy investment and greenhouse gas emissions reductions accelerated by federal funding, in a long-term strategy announced today by Tri-State Generation and Transmission Association.

The not-for-profit wholesale power supply cooperative’s 2023 Electric Resource Plan (ERP), filed with the Colorado Public Utilities Commission (CoPUC), includes as its preferred plan an Inflation Reduction Act (IRA) scenario that would be enabled by funding through the U.S. Department of Agriculture’s (USDA’s) Empowering Rural America (New ERA) program.

“Our ambitious plan, with federal funding, can accelerate clean energy investment and significant greenhouse gas emissions reductions at a lower cost than alternative scenarios, all while exceeding both industry-standard and heightened extreme weather reliability criteria,” said Duane Highley, Tri-State CEO. “We are clearly demonstrating how Tri-State remains the most reliable, affordable and responsible power supplier for our members both now and well into the future.”

Tri-State’s preferred plan identifies the addition of 1,250 megawatts (MW) of new renewable energy resources and energy storage through 2031, the retirement of Craig Station in 2028, the addition of a dispatchable natural gas unit in 2028 with carbon capture and sequestration added in 2031, and the retirement of Springerville Unit 3 in 2031. With sufficient federal funding support, the plan results in accelerated system-wide emissions reductions and an 89% reduction in greenhouse gas emissions in Colorado by 2030, relative to a 2005 baseline.

“Our rapid transition increases clean energy used by our members to 50% in 2025 and 70% by 2030, benefiting members with lower and stable priced renewable energy resources,” said Highley. “Through 2043, our plan reduces costs to our members by more than $1.8 billion compared to business as usual.”

The investments in Tri-State’s preferred plan are contingent on approval by the CoPUC and a New ERA award from the USDA. “Federal funding in support of our preferred plan would be transformational for Tri-State and our members,” said Highley.

1,250 megawatts of new renewable energy and energy storage investment by 2031

Tri-State will invest in the largest resource acquisition in its history, including 1,250 MW of geographically distributed renewables and battery storage between 2026 and 2031, including:

• 500 MW of wind resources;
• 200 MW of wind resources with storage hybrids;
• 310 MW of storage, including standalone 100-hour iron air batteries, standalone 4-hour batteries, and 4-hour batteries with wind and storage hybrids; and
• 240 MW of solar resources.

These resources will be procured as a mix of power purchase agreements and owned resources. In addition to these resources, Tri-State is adding 595 MW of new solar resources in 2024 and 2025 that were previously announced in 2020, bringing a total of 920 MW of solar resources on Tri-State’s system by 2031. In 2031, Tri-State will have a total of 1,374 MW of wind resources.

Craig Station and Springerville Unit 3 retire, natural gas plant with carbon capture supports resilience

With resource costs increasing and Tri-State’s load reduced from three member systems terminating their contracts to withdraw from membership between 2024-2025, all of the scenarios modeled retire Craig Station Unit 3 by Jan. 1, 2028, to improve system economics. The retirements of Craig Station Unit 1 by Dec. 31, 2025, and Craig Station Unit 2 by Sept. 30, 2028, were previously announced.

Craig Station Units 1 and 2 are jointly owned by Xcel Energy, Platte River Power Authority, Salt River Project, PacifiCorp and Tri-State. Tri-State owns Unit 3.

"The benefits of federal funding would help us to address the stranded costs of retiring coal units, ensuring lower emissions while protecting rural consumers from increased costs,” said Highley. “With our local, state and federal partners, we will continue to work with our employees and the northwest Colorado community to support their transition."

With federal funding to reduce greenhouse gas emissions, and offset closure and stranded asset costs, Tri-State’s preferred plan proposes a retirement date of the Arizona-based Springerville Station Unit 3 by Sept. 15, 2031, pending CoPUC approval of Phase 1 of the 2023 ERP filing. The early retirement date of Springerville Station 3 would largely be due to economic factors.

To meet industry-standard Level 1 reliability metrics and Tri-State’s heightened extreme weather Level 2 reliability metrics, the preferred plan adds a 290 MW combined-cycle natural gas unit in 2028, with carbon capture and sequestration added in 2031. The dispatchable power plant balances renewable resources to ensure reliability, and is forecasted to operate with a low capacity factor until carbon capture and sequestration is operational.

System-wide emissions reductions include 89% greenhouse gas reduction in Colorado by 2030

To be responsive to the New ERA Program’s criteria prioritizing GHG reductions through 2031, Tri-State’s preferred plan reliably and ambitiously reduces emissions across its system, including reducing emissions associated with Colorado wholesale electricity sales by 89% by 2030, relative to a 2005 baseline, exceeding the state’s emissions reduction requirements.

“With federal funding, we can further reduce greenhouse gas emissions and avoid new emissions while increasing our renewables mix and reducing carbon intensity,” said Highley.

Energy efficiency and demand management meets state targets

Tri-State continues to support energy efficiency and demand management with its members. All of the ERP scenarios include applicable Colorado energy efficiency targets and a Colorado demand response target of 4% beginning in 2025. Tri-State also identifies energy efficiency and demand response in New Mexico and Wyoming.

“Tri-State’s Cooperative Energy Ecosystem includes a Distributed Energy Resource Management System that will optimize loads and resources with our member systems to increase resilience and lower costs,” said Highley.

Strong stakeholder support for acquisitions and retirements advanced by potential New ERA award

Tri-State worked closely with a diverse group of members and stakeholders, including environmental non-governmental organizations, state agencies, and industry-developer groups in advance of its 2023 ERP filing.

“This transformational plan outlines the most cost-effective path for Tri-State to meet our mission to serve our members with a reliable, affordable and responsible supply of electricity,” Highley said. “We look forward to continuing to work with our members, the Colorado Public Utilities Commission and stakeholders on a reliable, affordable and responsible path forward that meets our members’ needs and accomplishes our energy transition goals.”

In addition, certain components of Tri-State’s preferred plan are supported by a Stipulation that requests that the CoPUC approve certain elements of the scenario and commit to support the acquisitions and retirements for which a New ERA award is being sought. The Stipulation was reached with Tri-State members Mountain View Electric Association and Otero County Electric Cooperative, the Colorado Energy Office, Colorado Utility Consumer Advocate, Colorado Solar and Storage Association, Western Resource Advocates and the Sierra Club.

“Tri-State’s plan leverages potential federal funding to accelerate their transformation at the lowest cost and greatest reliability,” said Ruth Marks, CEO of Tri-State member Mountain View Electric Association (Limon, Colo.). "Importantly, Tri-State included opportunities for its members from each state to participate in a collaborative resource planning process.”

“We appreciate Tri-State’s commitment to decarbonization and are excited to see the benefits of more low-cost clean energy that the New ERA program can deliver for electric cooperative members and rural communities across our state,” said Will Toor, executive director of the Colorado Energy Office.

“The proposed plan builds on the commitments Tri-State made in its 2020 electric resource plan to reduce greenhouse gas emissions for its Colorado members,” said Stacy Tellinghuisen, deputy director of policy development at Western Resource Advocates. “We commend Tri-State for developing a plan that ensures all its member cooperatives benefit from the transition to clean energy, and we encourage other utilities to tap into these critical federal funds to replace their expensive, polluting plants with cleaner resources.”

“We strongly support Tri-State’s proposal to make smart use of federal funding to bring the benefits of low-cost clean energy to its rural members,” said Sarah Clark, Colorado field manager for the Sierra Club. “Tri-State’s plan to accelerate its transition away from coal and toward cleaner energy resources is a win-win, as it would both reduce emissions and save customers money. We encourage the USDA to approve Tri-State’s federal funding request to advance this transformational plan.”

Tri-State notes that the electric resource plan is subject to review, modification, and approval by the CoPUC, and input by intervenors. The plan is also subject to change depending on a New ERA award, as well as changes in technologies, markets and the regulatory landscape, and each resource plan Tri-State files over time reflects these changes as they occur. Phase II of the 2023 ERP will reflect relevant changes next year.

About Tri-State

Tri-State is a power supply cooperative of 45 members, operating on a not-for-profit basis, including 42 utility electric distribution cooperative and public power district members in four states. Together with our members, we deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. Visit www.tristate.coop.