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Escalante coal plant approaching end of the line

The switching yard is seen to the side of the coal-fired Escalante Generating Station in Prewitt that is approaching the end of the operational life by year’s end.

ALBUQUERQUE, N.M. — The coal-fired Escalante Generating Station near Grants is rapidly approaching final shutdown, with two-thirds of its 107-member workforce laid off, and about 30 more facing termination by year-end.

Tri-State Generation and Transmission Association, which announced the plant’s closure last January, said it’s working with local officials, businesses and economic development groups to help mitigate the impact on McKinley and Cibola counties.

“Escalante is a big part of the local economy,” said Tri-State CEO Duane Highley in a virtual town hall Tuesday morning. “…It‘s not possible to replace it, but we’re working to assist in the transition.”

The 253-megawatt plant supports some 226 direct and indirect jobs, with nearly a $100 million annual economic impact on local communities, Highley said.

Rep. Patricia Lundstrom, D-Grants, told town hall participants that plant operations generate $2.7 million in tax revenue annually for McKinley County, and $560,000 for Cibola County.

Apart from the Escalante job losses, Peabody Coal Co.’s El Segundo mine, which supplies the plant, will lay off 50 workers in August.

“This is an emergency issue for me now,” Lundstrom told webinar participants.

Lundstrom co-sponsored House Bill 8 this year, signed by the governor, to allow counties with coal plants that are closing to create special economic districts with bonding and taxing authority to invest in infrastructure, business recruitment and retention to create jobs and promote economic development.

Lundstrom said officials are working to establish a special district at the Escalante site in Prewitt with a new industrial spec building to recruit new businesses.

Tri-State, meanwhile, is working with McKinley Paper Co., which employs more than 220 people in Prewitt, to replace the steam, water and electricity it receives from Escalante to run its operations.

“Escalante and the paper company have been tied tightly together for 30-plus years,” said Tri-State Senior Vice President for Generation Barry Ingold. “We’ve been working for the past six months to keep the paper mill in business after the plant shuts down.”

Tri-State is finalizing agreements with the mill to acquire a gas-fired boiler, water rights and equipment from Escalante to generate its own steam and water for operations, plus continued power supply from Continental Divide Electric Cooperative in Grants.

Tri-State is pumping $10 million to $12 million into employee compensation packages, and providing $5 million in economic development assistance for local communities.

It will build a 200 MW solar power plant in Prewitt that will generate $25 million in local taxes over 35 years, Highley said. That project will provide hundreds of construction jobs, but only a half dozen permanent ones when it comes online in 2023.


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