IEEFA U.S.: Seeds of a just coal transition policy in Colorado

In its passage last week of legislation that will establish a fund dedicated to easing worker transition in a post-coal economy, Colorado is taking a modest but promising policy step others can follow.

Gov. Jared Polis has signaled he will sign HB19-1314, which will create the Colorado Just Transition Office. The bill amounts to the most serious state-government acknowledgement to date that coal-fired electricity generation is on its way out, and that its departure will bring deep economic distress to some communities if nothing is done to diversify coal-dependent economies.

The Colorado counties that stand to be the most affected by the transition away from coal are Delta, El Paso, Gunnison, La Plata, Larimer, Moffat, Montrose, Morgan, Pueblo, Rio Blanco, and Routt. They are all rural counties that have significant coal-mining or coal-generation activity and meet public-investment requirements in the bill that call for helping communities that have at least 50 “coal-impacted employees.” The geographic spread is striking: Coalfield communities in Colorado, the eighth-biggest state in the country, run from its border with Wyoming through its central mountains into communities near the New Mexico state line.

THE BILL IS THE FIRST LEGISLATION OF ITS KIND IN THE U.S. AND COULD SERVE AS A TEMPLATE FOR OTHER STATES TO FOLLOW—even for the federal government to consider—as coal continues to lose market share to natural gas and renewables.

The bill contains two especially notable provisions:

• A directive to create a template for establishing an early warning system of impending coal plant and coal mine closures.
• Guidelines for formulating plans and programs for addressing the local employment impacts of such closures.

HB 19-1314 appropriates $165,000 to open the Colorado Just Transition Office and requires a draft plan be developed by July 2020 and a final funding recommendation be sent to the General Assembly by 2024. It is an important first step in the right direction, mainly for its recognition of changes that are coming to small-town economies across the state.

The Colorado legislation derives from a coalition of what were once considered strange bedfellows, joining together labor interests, environmentalists, county governments and state-level politicians.

Union representatives pushed hard to include language meant to help coal workers get re-employed and to lay the foundation for a “wage differential benefit” for those who find employment at the same pay they earned in the coal sector. The legislation calls for training and reemployment services as well as income support while a worker is in transition, and it also mandates that companies provide advance public notice of coal mine and plant closings.

MUCH OF THE POLICY RATIONALE SPELLED OUT IN THE BILL ALSO APPLIES TO DECLINING COALFIELD COMMUNITIES BEYOND COLORADO—in the Powder River Basin of Montana and Wyoming, across Appalachia, on Navajo and Hopi tribal areas of Arizona, and in northeastern New Mexico.

Some excerpts from HB 19-1314:

• “Many of these jobs provide family-supporting wages and benefits. The communities that host retiring power plants may lose principal contributors to their tax base and revenue for vital local government services.”
• “A strong and comprehensive policy is needed to invest new financial resources in coal communities that are seeking to diversify and grow their local and regional economies in a manner that is both sustainable and equitable.”
• “[Public policy] must ensure that the clean energy economy fulfills a moral commitment to assist the workers and communities that have powered Colorado for generations, as well as the disproportionately impacted communities who have borne the costs of coal power pollution for decades.”

One-of-its-kind as HB 19-1314 seems, there is precedent for this approach. The federal Trade Adjustment Assistance Program/Reemployment Trade Adjustment Assistance program, for example, established to help workers over 50 who have lost their jobs to foreign competition, guarantees pay for two years equivalent to 50% of the difference between new and previous wages.

Similar policies to mitigate the harsh consequences of plant and mine closures are critically needed to support transitioning coalfield communities across the country.

Pam Eaton is a Denver-based consultant. Karl Cates ([email protected]) is an IEEFA research editor based in Santa Fe, N.M.

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