PUEBLO, Colorado – This small city 115 miles south of Denver has been a Western hub for steel production since the late-1800s. And like many steel towns in America, it’s attempting to make steel without relying as much on non-renewable energy like coal.
Now, Colorado’s largest utility, Xcel, wants to increase the amount of energy generated by renewable sources, which would mean shutting down two of its three coal-fired plants. The goal is to reduce coal-fired power and boost wind and solar production to 55 percent of the company’s energy mix.
During its heyday, Colorado Steel and Iron in Pueblo had more than 60 mines and quarries across Colorado, Utah, Oklahoma, Wyoming and New Mexico. It eventually became the state’s largest private landowner.
The steel industry here got hit hard in the 1970s and ’80s, but for Pueblo, there was a bright spot. The city of a 100,000 has plentiful sun, and it now is one of the biggest producers of the enormous wind turbines used to produce energy.
If Colorado regulators approve Xcel’s proposal, it will mean two of the three Comanche Power Plant smokestacks that define Pueblo’s skyline would go away.
The proposed change makes long-time Comanche Power Plant workers like Dave McKenzie nervous. He’s been at Xcel’s largest coal-fired power plant in the state for 15 years.
“We’re very well-paid for what we do. But we work in a dangerous situation,” he said.
Here’s the rub: Comanche employees can earn up to $100,000 a year. That’s a big deal in a town where the average salary is about $20,000 less compared with the rest of the state.
Eighty jobs are on the line, and by 2025, workers either will retire or be placed in new positions, Xcel says. But for McKenzie and his two sons-in-law — who also work at the plant — there are more questions than answers.
“I don’t want to see my grandkids have to leave” he said. “It’s fun having them run around the house. But if these jobs go away, so do they.”
Regulators are expected to decide on Xcel’s renewable-energy plan and the future of Pueblo’s Comanche plant in September.
Transitioning from a coal-based economy isn’t unique to Pueblo. It’s happening nationwide as more utilities turn to renewables. And that’s despite President Donald Trump’s effort to bolster the industry.
In Arizona, for example, the West’s largest coal-burning power plant, the Navajo Generating Station, is scheduled to shut down in 2019, as natural gas and renewable energy have become cheaper options for utility companies. That plan has spawned protests by workers and members of the the Native American communities that will be affected by the closing.
In Colorado, the Xcel plan to rely more on renewable energy is buoyed by Gov. John Hickenlooper’s recently declared climate-action goals.
The Xcel proposal would add 700 megawatts of new solar. Pueblo specially stands to benefit greatly from one of the largest solar-battery storage projects in the country. The utility also wants to add 1,100 megawatts of wind power, generated by the city’s booming Vestas Wind Systems plant, the largest wind-tower manufacturer in the world.
Orders Vestas are fully booked through 2021, spurred by the expiration of a production tax credit for wind energy.
“I mean, how many companies can look forward and say, ‘My production forecasts are that high,’” asked Tony Knopp, Vestas Pueblo plant manager.
Chris Markuson, director of Pueblo County Department of Economic Development, said the community is “poised to become the renewable-energy hub for Colorado and likely the region.” Overall in Pueblo County, the Xcel plan is expected to bring an additional $1.4 million in tax revenue.
Beyond Vestas, he said, ample sunshine and the transmission lines that crisscross Pueblo put it in a sweet spot for large-scale solar. Last fall the Denver Post reported that the city is in the running to be the home of “the largest build-to-suit solar-cell and solar-panel manufacturing center in the United States.” That could provide nearly 800 jobs.
“All of those things add up to making Pueblo prime for renewable development,” said Markuson, who adds he’s talking to six other renewable-energy companies that could relocate because of the Xcel proposal.
A new economy of wind power
Spend any amount of time with Markuson and you get the sense that the renewable boom isn’t happening by accident. Pueblo County recruited Vestas a decade ago by touting strong rail line connections, community college training programs and a plethora of experienced steel workers.
An economic analysis prepared for Xcel said the renewable transition would bring 133 new jobs to Pueblo over a 23 year period, with a real Gross Domestic Product increase of nearly $10 million. Personal income could increase by $8.6 million.
In the end, it’s not job numbers that matter to Markuson, although he does keep a careful eye on them. He cares about economic growth, the GDP increase and giving the once down on its luck southern manufacturing hub a new heyday.
“Really, to push people from a place of poverty to a place of affluence,” he said. “And that is a difficult thing to do.”
Closing down coal plants won’t necessarily make energy cheaper for residents
The irony of all these renewable plans is that while it will benefit the city economically, residents won’t reap the rewards on their energy bill. For most in town, Xcel isn’t their utility – Black Hills Energy is. Rebecca Vigil with citizen’s group Pueblo’s Energy Future said one challenge for residents with less disposable income are the higher-than-average utility rates. The city is exploring breaking away from Black Hills Energy in search of better rates — and with a goal of getting 100 percent of their energy from renewable sources.
“It has a big impact here with people trying to get ahead, and also with businesses,” Vigil said of the impact of high power bills.
Black Hills said recently redesigned electric rates will shrink utility bills by as much as 5 percent. Tensions between residents and Black Hills are high.
Steel City Solar’s Jim Brown knows these pluses and minuses better than most. He built his business two years ago around customers fed up with high utility bills.
“It’s eating into their budgets, eating into the other things they like to do,” Brown said of Black Hills’ customers.
He tells potential solar customers he could save them 30 percent on their electric bill. As a former paratrooper and electrician, he actively sought out work in the solar industry. The Xcel plan could bring more experienced solar installers to town. That would help Brown. He hopes to double the size of his company. Today he has 20 workers, many of whom he’s trained.
“I mean, people just have to evolve,” Brown said. “Industries change all the time.”