Last week, Colorado Springs Utilities (CSU) earned a likely stay of execution for its Ray Nixon coal plant. It came in the form of a surprise compromise bill pushed by environmental groups meant to head off more sweeping relief. The bill, SB26-182, would allow a three-year extension of the retirement of the coal unit until 2032, if passed. The bill received 32 votes in favor, to 3 No votes, at its third reading, and is moving fast, with a unanimous vote to bring it to the House floor.
The prior bill, SB26-022, which would have allowed operation until 2040, was killed in the same hearing. CPR News notes of SB26-182 that “the governor’s office also signaled its support for the bill.”
The latest bill text gives CSU a delay, but there’s a catch. CSU must commit to a hard coal cessation date of December 31, 2032, with no reliability exceptions, and “seek to achieve” a 95% reduction in greenhouse gas emissions by the end of 2039. That is reminiscent of Gov. Polis’ long-stalled proposal for 95% emissions cuts by 2040, and it applies to any municipal utility that has “encountered challenges in achieving” its promised GHG reductions. This ‘compromise’ will be the precedent pointed to next time the legislature takes up emissions targets for the rest of the state.
In a statement about SB26-182, CSU’s Travas Deal describes the bill as a “fair but firm compromise that helps us achieve the state’s emissions reduction goals without compromising reliability and affordability.” The three-year extension, he writes, would give time “to develop the transmission resources needed” to access wind and solar energy from within the Southwest Power Pool.
CSU makes it clear, however, that “Retiring Nixon before those projects are operational will carry some risk.” That’s an understatement. Nixon Unit 1, the 207-MW coal-burning unit at the plant, is the city’s last remaining coal-fired power facility and one of CSU’s largest generators, serving nearly 250,000 electricity customers. The military bases served by CSU — including Fort Carson, Peterson Space Force Base, Schriever Space Force Base, the U.S. Air Force Academy, and the Cheyenne Mountain Complex — require 99.5% grid reliability. These installations may also need data centers that could draw up to 50 MW.
CSU is soliciting bids for up to 300 MW of utility-scale wind, solar, and energy storage projects, to be introduced by 2030. However, as a CSU spokesperson has said in response to pressure from the Sierra Club to close Ray Nixon by 2029 and procure wind and solar instead, that, “While renewables and battery storage are part of our strategy, they cannot fully replace baseload generation without creating reliability risks for our customers.”
CSU isn’t alone in discovering that the replacement wind and solar mandated by Colorado’s climate laws doesn’t exist yet. Craig Station Unit 1, a 446 MW unit, was prevented from retiring in 2025 by federal orders under the Federal Power Act. Although critics called the orders unnecessary, the Southwest Power Pool called upon Craig to run for a two-week stretch due to low wind output — a mere week after several Colorado utilities joined SPP. Xcel Energy sounded a similar alarm in a March filing with the PUC, proposing to keep all four of its remaining coal-fired units online through 2030, because the margin for success is “razor thin.”
With the session ticking down to the finish line, it’s unclear if Gov. Polis will introduce legislation to accelerate Colorado’s renewable energy mandate from 2050 to 2040, as has been speculated. But CSU’s experience should demonstrate that attempting to meet these mandates, even under current timelines, will be not only prohibitively expensive, but may not be possible at all. Expect CSU back at the Capitol in the next few years — joined by a chorus of other Colorado utilities seeking relief, too, as reality sets in.
