A lot is riding on Senate Bill 26-022.
If it passes, Colorado Springs Utilities will be allowed to keep the coal-fired Ray D. Nixon Power Plant running, possibly for another 14 years. That would mean the plant, five miles south of Fountain, would continue to churn out over 1.2 million metric tons of carbon dioxide and other pollutants per year. Utilities officials say that passage of the bill also would mean better odds that customers’ bills would remain relatively stable in the near term.
If the bill fails, though, Utilities would face a choice: It could opt to keep Nixon in operation beyond 2029 in defiance of the state’s 2019 mandate to reduce carbon emissions by 80%, as compared to 2005 levels, by 2030. But doing so could bring air quality fines of up to $47,357 a day. (That’s $1.4 million a month.) Or, it could close Nixon on time and risk paying more to buy power elsewhere – or try to get by with less generating capacity, chancing blackouts as its supply becomes less reliable.
These are the stakes as Utilities works to persuade lawmakers to allow Nixon to continue as part of its arsenal of power-generating assets that total roughly 1,400 megawatts.
And the issue could become a lightning rod in President Donald Trump’s rollback of environmental safeguards, which includes pushing for more use of coal.
Nixon, built in 1980, accounts for roughly a quarter of the city’s power needs, so shuttering the plant is no small loss – especially at a time when Utilities has received at least 10 requests for power from data centers. Those requests, submitted between July 2024 and February 2026, seek 1,370 megawatts of power from Springs Utilities and represent a potential for billions of dollars of investment locally by those customers, Utilities records show.
But at least one sponsor of SB26-022 – Rep. Amy Paschal (D-Colorado Springs) – is rethinking her support, citing Utilities’ failure to come up with a back-up plan if the bill fails.
The only Plan B articulated by Utilities so far came during an employee town hall last month when Utilities CEO Travas Deal said if the bill doesn’t get approved, “The gloves will come off.”
It’s unclear what that means, but two lawmakers – Paschal, and another sponsor of the bill – said they think Utilities is contemplating a lawsuit.
The background
The power plant closure issue dates to 2019 when state lawmakers adopted a bill that requires utilities to reduce greenhouse gas emissions by 80% by 2030, relative to 2005 levels.
On Jan. 12, 2026, Utilities unveiled the Senate bill, which would allow a delay in closing Nixon until 2040. That’s necessary, the city agency said in a statement, because “we cannot meet this deadline.”
Utilities noted it filed a Clean Energy Plan in 2021 and said it has “made significant early efforts to achieve the plan’s targets” including the 2022 retirement of the coal-fired Martin Drake Power Plant, installation of natural gas generators on that site, completion of a 175-megawatt solar array and the addition of the Jackson Fuller Energy Storage Project.
Utilities also notes it will soon join the Southwest Power Pool Regional Transmission Organization in order “to access renewable energy resources at substantially lower prices than if we were to acquire these resources ourselves.” In addition, Utilities is updating its Sustainable Energy Plan to chart a transition from coal to other sources of power that will be “smart, affordable, and reliable.”
However, it said, “several factors outside of Springs Utilities’ control have emerged that will prohibit Springs Utilities from achieving its 2030 emissions targets.”
“The combination of unfavorable market conditions for new renewable energy development, the lack of immediately viable transmission developments in Colorado and the ever-increasing load demands for additional new electricity has created a perfect storm against our ability to achieve Colorado’s goals before the state deadline,” Utilities said.
The time extension contained in the SB26-022 bill would enable Utilities to find or develop affordable and reliable replacement power supplies for Nixon. It would also change the deadline to inform the state Department of Public Health and Environment about challenges to achieving 80% reduction of greenhouse gas emissions from March 31, 2026, to May 31, 2026. And, it would allow a municipal utility to submit an updated plan for compliance by Dec. 31, 2026, outlining the earliest year, not later than 2040, that the utility expects to achieve the 80% reduction.
The bill would bar the state from undertaking any action that impairs the utility’s reliability or increases average annual electric rates by more than 1.5%.
“This bill reflects months of Springs Utilities’ engagement with local, state and federal leaders to protect electric reliability and rate stability for its customers,” Utilities said.
The bill was introduced in the legislature on Jan. 14 and is sponsored by Democrats Sen. Marc Snyder (Manitou Springs) and Rep. Amy Paschal (Colorado Springs), and Republican Senate Minority Leader Cleave Simpson (Alamosa), and House Minority Leader Jarvis Caldwell (Colorado Springs).
Snyder, Simpson and Caldwell were quoted in a release acknowledging that many customers struggle with the high cost of living and that requiring Nixon to close on schedule could impose a financial burden, whereas extending the closing until 2040 could bolster affordability and reliability.
“Everyone agrees we want a clean and sustainable future for our kids, but the energy goals set by the Legislature over the last several years are now colliding with reality,” Caldwell said in the release. “Under current law, families and customers in Colorado Springs are facing significant increase in utility costs and even the risk of reliability issues if we do not allow more time for this transition. Achieving a greener future requires realistic timelines that protect affordability and reliability for the communities we serve.”
Paschal also expressed support, saying she didn’t want to see further price hikes at a time when the Colorado Springs Utilities Board, composed of Colorado Springs City Council, has adopted a five-year rate hike that will push power rates up by 6.5% per year through 2029. It’s unclear what portion of those increases would be dedicated to Nixon’s replacement.
But now, Paschal is having second thoughts, and the bill could be in jeopardy in the Democrat-controlled General Assembly.
‘They need to produce a plan’
Rep. Paschal’s main concern at this stage centers on Utilities’ apparent lack of planning.
There doesn’t appear to be a plan to comply with the state emissions-reduction requirement if SB26-022 doesn’t pass. When the Pikes Peak Bulletin submitted a records request asking for documentation of CSU’s Plan B if Nixon isn’t allowed to continue operating beyond 2029, Utilities said, “There are no responsive documents to your request.”
Paschal said she, too, has asked Utilities about an alternative to the bill. “CSU doesn’t have any publicly published plan of how they’re going to get to 80% reduction by 2030,” she said. “I think their best approach is to come up with a good solid plan. I have told CSU repeatedly they need to produce a plan. I just don’t know when that will happen. My experience working with them so far is, I’m not impressed with their planning, which is really unfortunate.
“What I have told CSU multiple times is, I will be not taking this bill to committee until [Utilities] has a plan,” she said. “So without a plan, I’m a ‘no.’”
She noted that the bill appears to be fashioned for Utilities alone; there are six remaining coal plants currently operating in the state, and only Utilities wants to extend the shutdown deadline for Nixon. “I do believe we are the only coal plant in this situation,” she said.
(The Colorado Sun reported on Jan. 30 that while President Donald Trump, an advocate for continued use of coal, ordered a coal plant in Craig to keep operating, its owners Tri-State Generation and partner Platte River Power Authority want to shut it down to save ratepayers money.)
Paschal did allow, however, that Utilities faces some unique obstacles: It’s a local utility that produces its own generation; it lacks transmission line connections with other places to buy more energy, and it serves several military bases. She also said Utilities was unsuccessful in applying for several federal grants to help fund alternatives to Nixon.
The Bulletin has published letters from several citizens who oppose extending the life of Nixon, and the Sierra Club and other groups, including Colorado Climate Advocates, oppose the bill. Those groups note on the Sierra Club Colorado Chapter website that Colorado Springs Utilities hasn’t produced a plan or timeline for how and when it would reach the 80% threshold requirement. They also note that although Utilities wants to keep Nixon open longer, it hasn’t committed to reducing emissions from the plant if its life is prolonged.
“Whether or not Colorado Springs Utilities intended this,” the Sierra Club Colorado Chapter website states, “its efforts to keep Nixon open have become one of the showpieces in a nationwide campaign by the Trump Administration and the fossil fuels industry to deny the existence of climate change, to roll back clean energy initiatives, to promote the continued use of fossil fuels, and to keep coal plants operating across the state. The Trump EPA recently rejected the Colorado Regional Haze Plan in large part because it would require the 2029 closure of Nixon.” See that EPA announcement here.
The path forward
When asked by an employee during a Feb. 11 employee town hall about an alternate plan, CEO Deal was coy.
“Let me just say I have a plan,” he said. “But I will not be speaking to that plan today. We have some options. I’m hoping for collaboration, understanding, but at some point the gloves will come off with me, but I won’t go into detail yet. We gotta get through this process before I jump into it. You’ll be fully informed.”
Asked to explain the “gloves off” comment, Utilities’ communications department didn’t provide one, but rather repeated prior messaging, saying the agency is unable to close Nixon by 2030 “without jeopardizing reliability and rate stability for our community. If the bill doesn’t pass and we are forced to retire Nixon’s coal unit at the end of 2029, Springs Utilities is projecting a capacity deficit of 173 megawatts in 2030.”
The statement also said Utilities wants to “plan for a sustainable future while maintaining affordable rates and reliable power for our community.” SB26-022 is designed to help Utilities comply with the state’s Clean Energy Plan goals by allowing more time to find reliable and affordable power with which to replace Nixon. For further arguments in favor of Utilities’ strategy to keep Nixon open, go to this site.
Paschal and Snyder say Utilities’ fallback plan could include filing a lawsuit.
“There’s a lot of ongoing negotiations happening,” Snyder said via email. “As to Plan B, I would expect it would wind up in court, something I think all parties would like to avoid.”
Paschal called filing a lawsuit “not productive at all.”
“They might win,” she said, “but it could take a long time.” She also reported that Utilities is in negotiations with the governor’s office to “broker a deal.”
“There is a bill coming this session regarding post-2030 emissions reductions,” she said via a text message. “The governor and the Colorado Energy Office are involved in crafting the content of that bill. The goal of negotiation would be to add some kind of relief that would benefit CSU into that bill.”
As of March 3, SB26-022 has not moved in the legislature beyond being introduced.
