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Tri-State Generation and Transmission Association will build a 200-megawatt solar power plant next door to the 253-MW coal-fired Escalante Generating Station near Grants, which the association plans to close this year.

Tri-State announced the $200 million solar project Jan. 15, a week after revealing plans to pull the wholesale electric supplier completely out of coal by 2030. It’s one of eight new utility-scale solar and wind facilities the association now plans to build in New Mexico and Colorado, providing a gigawatt of renewable-energy generation.

That will replace two-thirds of the 1.5 GW of coal-fired electricity Tri-State will lose after closing Escalante in December, and after ending all operations in 2030 at the 1.3-GW Craig Station in Colorado, which supplies power to Tri-State member cooperatives and to other utilities that co-own some of the plant’s generating capacity.

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Tri-State is a wholesale association that sells electricity to 43 distribution cooperatives in four states, including 11 in New Mexico.

The Escalante Solar plant will be in Prewitt on land near the coal-fired Escalante station. That could help offset job losses at the coal plant, which employs 107 people, while replacing some of the local taxes that will disappear when Escalante shuts down, Tri-State CEO Duane Highley said.

“Escalante Solar represents an early investment in the communities near our generating station, in light of our recent announcement on its closure,” Highley said in a prepared statement. “We will continue our commitment to the local community as we move forward with the transition of our resources.”

None of the other planned solar and wind facilities announced by Tri-State will be in New Mexico.

The Escalante Solar project will be Tri-State’s largest solar plant, either operating or planned, said Tri-State spokesman Lee Boughey.

Tri-State will buy all electricity generated by the plant, which will be built and operated by solar developer Turning Point Energy. It will provide enough power to supply the equivalent of nearly 62,000 typical cooperative member households.

Once operating, Escalante Solar won’t offer many permanent positions, but it will provide hundreds of construction jobs before then, Boughey said.

The association will give “generous” severance packages to coal plant employees, plus supplemental funding for health benefits and educational and financial planning assistance. It’s also providing $5 million in economic development assistance for communities affected by plant closure.

“Our first priority is to focus on the employees and community needs in this difficult transition,” Boughey told the Journal. “We’re working with the surrounding communities to help plan for the future. The community knows how best to use the resources we offer, so we’re leaving it to them to apply the funding as they see fit for the biggest impact.”

State officials have advocated for renewable generation to be located in communities affected by coal plant shutdowns, including the Farmington area, which will be hurt by the planned 2022 closure of the coal-fired San Juan Generating Station, said Tripp Stelnicki, a spokesman for Gov. Michelle Lujan Grisham.

“We want replacement power to be located in the affected communities whenever possible, so we welcome Tri-State’s announcement,” Stelnicki told the Journal. “We’re also happy that the association is offering severance packages for affected employees. Some of them will retire, but we want to help the others find new employment right where they are.”

Workforce Solutions Secretary Bill McCamley said his department is working with Tri-State to determine the shutdown’s impact on individual employees.

“About 20% could probably retire now; another 50% are within two to five years of retirement, and the remaining 30% will need long-term options,” McCamley said. “We need to tailor programs to help them.”

The government will encourage Turning Point Energy to hire locally and train laid-off Escalante employees for construction. It’s also applying for an emergency grant from the U.S. Department of Labor for education, job retraining and wage subsidies for businesses that hire former Escalante employees and train them on the job. And it’s working with U.S. Rep. Xochitl Torres Small, D-N.M., on a local career fair for February.

Still, the extent of forthcoming layoffs is uncertain, because Escalante’s closure will also affect a nearby mine run by Peabody Coal Co. that supplies the plant. About 40 people work at the mine.

“We don’t know the exact number of employees there,” McCamley said. “But the mine supplies a bunch of places, so it may continue to serve other customers even after Escalante closes.”

Local economic development groups are reaching out to state officials and legislators for economic development assistance and help in luring companies to the area to buffer the impact of Escalante, said Robert Castillo, president of the Cibola Communities Economic Development Foundation and CEO of Continental Divide Electric Cooperative in Grants.

“Our biggest, immediate concern is the loss of jobs for our residents,” Castillo said. “This is a very trying situation for the people in our area.”

One legislative initiative could help in those efforts. House Bill 8, co-sponsored by five legislators in this year’s session, would allow counties to form Electric Generating Facility Economic Development Districts next to fossil fuel plants that are being retired. The districts would have bonding capacity to raise money for projects to recruit new businesses.

The governor supports the bill, Stelnicki said.

“It could convert the existing Escalante coal plant site into a new industrial site, repurposing the area for additional industrial opportunities,” Stelnicki said.

Tri-State says its switch from coal to clean energy projects means 50% of all electricity consumed by its member cooperatives will come from renewables by 2024, helping the association meet state mandates in New Mexico and Colorado.

Apart from those mandates, however, the Escalante closure reflects the dim future of coal-fired plants, Boughey said.

“The closure is driven by the economics of operating the plant, which is often not competitive in the marketplace with today’s low-cost renewables,” Boughey said. “Renewable prices are so low now that we get a green energy dividend from developing those projects, which helps us to retire our coal units early.”