Routt County seeking $89 million from Xcel Energy in potential Hayden Station settlement
- Dylan Anderson
- 15 minutes ago
- 5 min read
The county’s request is far above what the power company has offered at this stage, but Commissioners say funding to replace lost property tax revenue and to support economic development is warranted.
Routt County is seeking $89 million over 10 years from Xcel Energy as part of a potential settlement agreement connected to the closure of the Hayden Station powerplant, a request far above the roughly $16 million over six years that has been offered by the power company.
The settlement agreement is not currently being negotiated directly between the parties, but rather through submissions to the Colorado Public Utilities Commission. Xcel outlined its position in October of last year and Routt County, in coordination with the Town of Hayden, filed documents stating their request on April 18.
The Routt County Commissioners have been preparing their request over the past few months, frequently meeting with externally hired lawyers in executive session to discuss their position. These closed-door meetings often included officials with the Town of Hayden.
Additionally, the county conducted an economic impact study of how the Hayden Station’s closure by the end of 2028 will impact local jobs, economic activity and property tax revenues for various special districts. In a press briefing about their new filings to the PUC on Monday, Commissioners said their request is supported by that study.
“Our communities stepped up to the plate, accepted that responsibility and provided electricity for our nation,” said Commissioner Tim Redmond on Monday, who’s answer testimony submitted to the PUC last week outlined Routt County’s position. “Now the time has come, when this is going away, to help us maintain our standard of living and quality of life.”
The potential settlement agreement aims to provide a “just transition” for communities like Hayden that have long relied on coal-fired powerplants to support their livelihood. In its testimony, Xcel Energy outlined potential payments to Pueblo and Morgan counties as well, where the Comanche 3 and Pawnee plants are also slated for closure.
The settlement talk comes after Moffat County and the City of Craig reached a deal with Tri-State Generation and Transmission last year worth roughly $70 million. That deal comes as the coop closes down the three units that make up the Craig Station by 2028 as well.
Commissioners said they have not engaged with Xcel Energy about a settlement, other than some clarifying discovery questions used to craft their request. Commissioner Sonja Macys said Monday that the negotiation could continue to play out through filings to the PUC, or the two parties could opt to negotiate directly.
The process to come to an agreement could move quite quickly and the PUC will be in Hayden for a public comment hearing on May 1. The PUC is currently planning to make a final decision in August.
“There is a relatively short window of time that this is happening,” Macys said.
Routt County believes they do have a better chance to get a good agreement with Xcel if they worked with them directly, “as opposed to leaving it in the hands of the PUC, whose charge is to protect the consumer,” Redmond said.
Property tax backfill and economic development payments
In Redmond’s answer testimony, he outlines the Routt County’s position that Xcel Energy should backfill 10 years of property taxes to the tune of $4.4 million a year — a sum that would fully replace revenue lost by local taxing districts like the Hayden School District, West Routt Fire Protection District and Routt County itself, to name a few.
Beyond backfilling property taxes, Routt County seeks an additional $45.4 million over 10 years in direct payments that would be used to help fund economic development projects locally. How this money would be spent hasn’t been decided, but it would be a discussion between Routt County and the Town of Hayden, commissioners said.
Projects listed in the testimony include expanding the Yampa Valley Regional Airport, support for a Yampa Valley regional transportation authority, solar and grid upgrade projects at the Hayden Wastewater Treatment Plant, and an endowment that would provide the Routt County Economic Development Partnership with sustainable funding.
Routt County is also asking for property dedications like the pumphouse property on the Yampa River along U.S. Highway 40 to ensure future public access and the rail spur leading to the powerplant, which could be used for both freight rail to Hayden’s business park or passenger rail to the airport. They also want any water rights held by Xcel that remain unused after 2050.
Xcel Energy’s initial offer is outlined in answer testimony submitted last October from Jack Ihle, a regional vice president of regulatory policy. Ihle outlines Xcel’s plan, which allocates a total of $16.3 million over six years as compensation for the closure of both generating stations in Hayden.
In his testimony, Ihle said their offer illustrates the next phase of Colorado’s Just Transition process and has less of a focus on direct payment than earlier settlements.
“The initial approaches to just transition have focused on payments,” Ihle said in the testimony. “With this [Just Transition Solicitation], we seek to move to the next phase of just transition: driving medium and long-term investment opportunities into these communities in lieu of payments.”
Xcel’s initial offer didn’t include any payments for economic impact and job loss, but rather calculated potential property tax losses for taxing districts based on the value of Hayden Station after it closes. Routt County’s request is based on the property taxes paid by the Hayden Station in 2023. Xcel’s offer also doesn’t include any property dedications.
“With any negotiation, obviously, you put out there what you think is reasonable, and the other party puts out there what they think is reasonable and that’s your starting point,” said Routt County Commissioner Sonja Macys.
In addition to the obvious difference in total funding included in the two sides' positions, Redmond highlighted that Routt County only being provided payments over six years was unfair, when other communities are being offered or will receive 10 years of funding.
In his answer testimony to the PUC, Hayden Town Manager Mathew Mendisco said the timing of these payments is important, because it represents the amount of time they have to replace the plant’s economic activity. Moffat County’s deal with Tri-State covers 10 years, and Xcel’s proposal for Pueblo County also spans 10 years. The proposal for Morgan County is for six years, like Xcel’s proposal for Routt County.
“In some respects, it will be more difficult for Hayden to transition its economy than the communities in Moffat County and Pueblo County, given our smaller size and fewer economic resources of Hayden versus Craig or Pueblo,” Mendisco said.
“Six years of property tax backfill is not enough to allow for the transition of our economies and there is no justifiable reason the Routt County Governments should receive any less of a time period than the Moffat County or Pueblo County governments,” Mendisco said later in his testimony.
Hayden Public Comment Hearing set for May 1
The filings to the PUC are part of consideration of Xcel Energy’s larger Just Transition Plan, a process that will include a public comment hearing in Hayden at the Hayden Community Center from 4-6 p.m. on May 1. This hearing intends to provide residents, workers and other stakeholders the opportunity to provide direct input to the PUC, which will have final approval over any settlement agreement. Childcare will be provided at the hearing.
A virtual public comment hearing is scheduled for April 28 from 11 a.m. to 1 p.m. (Register here)
A day before the Hayden public comment hearing, Routt County is hosting a question-and-answer session with the Office of the Utility Consumer Advocate. This hopes to help residents better understand the PUC process and how they can participate in it. This session is scheduled for 11:30 a.m. on April 29 in the Commissioner’s Hearing room at the Historic Routt County Courthouse.