The clock is ticking on Craig Unit 1. By the end of this year, the 446-megawatt coal-fired power plant that’s anchored Moffat County’s economy since 1980 is scheduled to go dark. But in a twist that’s become familiar in America’s coal country, the federal government may force it to stay online—at least temporarily.
Tri-State Generation and Transmission Association, which operates Craig Station, says it has a “high degree of confidence” the U.S. Department of Energy will issue an emergency order before year’s end to extend Unit 1’s life. The Trump administration has made clear it intends to keep coal plants running, committing $625 million to “reinvigorate and expand” the industry, including $350 million specifically for recommissioning and retrofitting old coal-fired plants.
Energy Secretary Chris Wright has framed these interventions as necessary for grid reliability and energy security. The administration has already used Section 202(c) emergency orders to keep coal plants operating in other states, citing concerns about power supply stability.
The Economics Don’t Add Up
But here’s the uncomfortable reality federal orders can’t change: Craig Unit 1 is scheduled to close not just because of Colorado Air Quality Control Commission regulations requiring it to shut down for regional haze reduction—it’s closing because it no longer makes economic sense.
Keeping the three-unit Craig Station running rather than closing it on schedule would cost an additional $79 million annually, according to analysis by Grid Strategies. Tri-State itself has publicly stated it has excess generating capacity and doesn’t need Craig Unit 1 to ensure reliability.
The utility’s preferred plan, filed with Colorado regulators, reflects previously announced retirements driven primarily by economics. When Craig Station fully closes in 2028, Tri-State plans to replace it with a 307-megawatt natural gas plant capable of blending up to 30% hydrogen into the fuel, plus 200 megawatts of battery storage—all located in Moffat County.
That’s cold comfort for a community where power plant and coal operations account for more than half of the property tax income. About 2,800 jobs were projected to be in danger when the mine and power plant closures were first announced in 2020. The Craig and Hayden plants together employ about 200 people directly.
A Community Already Moving On
Walk through Craig today and you’ll see a town that isn’t waiting for Washington to save it.
The Cooper family—longtime coal industry workers—started High Altitude Geothermal, installing geothermal heat pumps that use the Earth’s constant temperature to heat and cool buildings. Wade Gerber is opening Bad Alibi Distillery. A cocktail bar is going up next door. After closure announcements, some business owners opened additional ventures like commercial print shops, seeing diversification as practical when high-paying jobs disappear.
Tri-State’s education subsidies are being tapped for everything from distilling classes to vehicle repair and gunsmithing courses—skills for new careers in a post-coal economy.
The city and Moffat County received a $3.3 million federal grant to create river-based amenities that could transform Craig into a tourism destination. The whitewater park and other projects are part of the Yampa River Corridor Project and the broader Moffat County Vision 2025 Transition Plan. More than two dozen projects are underway, from affordable housing developments in downtown Craig to commercial solar arrays.
There’s even interest in developing a hydrogen hub at Craig Station’s site. Tri-State and partners applied for federal funds to pursue a green hydrogen pilot project.
The Last-Ditch Playbook
So what could actually save Craig Station? Any realistic plan would need to address three fundamental challenges:
1. Make the Economics Work
The $79 million annual cost premium isn’t going away. A save-the-plant effort would need:
- Federal subsidies covering the operational cost gap (potentially through DOE emergency funding or new coal support programs)
- Modernization investments to improve efficiency and reduce operating costs
- Market restructuring or guaranteed power purchase agreements at premium rates
- Carbon capture retrofitting (though this adds billions in capital costs)
2. Navigate Colorado’s Air Quality Regulations
Craig Unit 1 must close under state regulations for regional haze reduction. Keeping it running requires either:
- Federal preemption of state authority (legally murky territory)
- Renegotiating Colorado’s regional haze implementation plan
- Installing pollution controls expensive enough to question whether saving the plant makes sense
- Securing exemptions that could face immediate legal challenges from environmental groups
3. Address the Reliability Question
If Tri-State genuinely has excess capacity, DOE emergency orders become harder to justify legally. The Federal Power Act’s Section 202(c) allows DOE to mandate operations only for emergency reliability needs. A successful save would need to demonstrate:
- Unexpected capacity shortages
- Grid stability issues without Craig Unit 1
- Delays in planned replacement generation coming online
- Regional transmission constraints creating localized need
The Political Reality
Even with Trump administration support, the headwinds are substantial. DOE can issue emergency orders, but they’re typically temporary—90 days initially, potentially extended to one year. They don’t change the underlying economics or state regulatory requirements.
Colorado has mandated aggressive renewable energy targets and greenhouse emission reductions. The state recently issued its decision requiring Xcel Energy to pay $203 million to coal communities for lost property taxes from closures—a tacit acknowledgment the closures are happening.
In November, the Colorado Air Quality Control Commission sparked controversy by granting Xcel’s Comanche 3 plant a one-year extension. Environmental groups charged officials with retreating in the coal fight. But even that concession came because the plant needed repairs, not as a permanent reversal.
What Happens Next
The expected DOE emergency order for Craig Unit 1 will likely arrive before December 31st. It might keep the lights on for a few more months, perhaps longer. But unless someone solves the $79 million annual question and navigates Colorado’s regulatory framework, it’s a stay of execution, not a pardon.
The bigger question is whether Craig needs saving at all. While federal intervention might preserve jobs temporarily, it does nothing to build the sustainable economy Moffat County needs for 2030 and beyond. The $625 million the Trump administration is throwing at coal might buy time, but it won’t buy certainty.
Craig’s families are already making their own calculations. Some are retraining. Others are starting businesses. A few are leaving. They’re not waiting for a last-ditch miracle—they’re building what comes next.
The coal plant that powered this community for 45 years is dying of old age and economics. No amount of political will changes that fundamental reality. The only real question left is whether federal intervention delays the inevitable long enough to matter—or just makes the eventual transition that much harder.