WildEarth Guardians

Tuesday, April 3, 2018
WildEarth Guardians Challenges Failure of Tri-State to Guarantee $120 Million in Coal Mine Cleanups

Utility Company Relying on Sham IOUs to Justify Reliance on Fossil Fuels
Contact: Jeremy Nichols, (303) 437-7663, jnichols@wildearthguardians.org

Denver—WildEarth Guardians today challenged Tri-State Generation and Transmission Association’s failure to provide more than $120 million in financial guarantees to assure clean up of the company’s coal mines in Colorado and Wyoming. 

In a citizen complaint filed with the U.S. Office of Surface Mining Reclamation and Enforcement, WildEarth Guardians called for investigation into Tri-State’s practice of “self-bonding” its coal mines in Colorado and Wyoming. 

By law, for a coal company to be permitted to mine, it must first post bonds to cover the costs of reclamation. This ensures that if a company becomes insolvent or goes out of business, the costs of cleaning up a mine doesn’t fall upon taxpayers. 

Normally, to meet bonding requirements, companies post sureties that are backed by third party guarantors. However, in some cases, companies are allowed to guarantee their own reclamation bonds and post what is called a “self-bond,” which is effectively a corporate IOU. 

In Tri-State’s case, while the company purportedly has provided an IOU for its nearly $120 million in reclamation liabilities, it has allocated no actual financial backing to guarantee this IOU or otherwise accounted for these liabilities. 

The complaint comes as Tri-State Generation remains heavily reliant on fossil fuels, primarily coal, to generate power for its customers. Tri-State is essentially an umbrella electric cooperative that provides power to 43 member cooperatives in the States of Colorado, Nebraska, New Mexico, and Wyoming. 

Although the company has been running a costly ad campaign touting its renewable energy commitments (the company claims it generates 30% of its power from renewable sources), the reality is Tri-State remains more than 70% reliant on fossil fuels. 

Most of this fossil fuel power comes from coal. The company owns all or portions of five coal-fired power plants in Arizona, Colorado, New Mexico, and Wyoming. 

Increasingly, this reliance on fossil fuels is costing its members more than ever. While wholesale rates charged to its members average 7.8¢ per kilowatt-hour, the cost of wind, solar, and even energy storage is far less. Recent reports in Colorado have found that when storage was added to the cost of developing new wind and solar, prices average 3.6¢ per kilowatt-hour, less than half of what Tri-State charges its members. 

Tri-State owns three coal mines in Colorado, including the Colowyo mine, which fuels the company’s Craig coal-fired power plant. The company also guarantees a portion of the reclamation bond for the Dry Fork mine in Wyoming, a massive coal strip mine that fuels nearby power plants. 

The company’s failure to properly guarantee its coal mine reclamation bonds raises concerns that it has failed to honestly disclose to its members the true cost of relying on fossil fuels. 

By law, the U.S. Office of Surface Mining Reclamation and Enforcement must respond to WildEarth Guardians’ complaint within 10 days.