Colorado’s coal country searches for “the next thing” to keep communities afloat
High schoolers shuttle desks and whiteboards down a hallway lined with used algebra textbooks at Paonia High School, dumping them in the trash behind the brick building.
Late this summer Paonia will merge with longtime rival Hotchkiss High, 10 miles down the road in the idyllic North Fork Valley in western Colorado. They’ll call the new school North Fork High, and current Paonia Principal Randall Palmer will stay on to lead it. Locals have been asking him what the transition will be like.
“They want the story behind the story,” Palmer said. “The story is our enrollment is down.”
There are 309 high schoolers between the two towns. It’ll drop to 292 in 2024 and after that, well, Palmer doesn’t want to go there. The enrollment reflects the rapid decline of the mining industry around here; in 2010, there were 426 students and three coal mines. Now there’s just one mine.
It presents profound challenges, particularly for the workers who relied on coal, which has always been boom-bust but this time isn’t coming back. Paonia officials estimate that every coal job has represented at least five other jobs in the area. The Colorado communities that have relied on coal find a way to replace billions of dollars in revenue and stave off barren main streets.
“Reality starts to set in,” Palmer said. “We don’t have the support for the mines. And those other services that supported mining are no longer. It’s tough. Tough.”
Colorado’s state government has made a promise not to leave behind the more than 1,000 people directly impacted by coal closures — and the thousands more indirectly affected, like electricians, truck drivers, security workers and others who serve the mines and plants. It approved the Office of Just Transition in 2019 to help with retraining or relocating coal workers, or paying them to retire early. (The office plans to expand into oil and gas in coming years.)
But this project isn’t something many people in coal-mining areas are even aware of, according to interviews with workers around the state. In fact, it’s only now getting any real resources: a couple employees approved in the 2021-22 state budget; a possible $15 million in seed funding through HB21-1290; and an extra $5 million annually through HB21-1312’s proposed elimination of corporate tax breaks.
“We are not going to insulate the state from change. Let’s be very clear about that,” said Sen. Chris Hansen, a Denver Democrat who works closely at the Capitol on energy policy. “This is not going to be, ‘Hey, we want everything to be like it was in 1975 and it’ll always be that way.’ We have to help communities reinvent themselves, find the next thing.”
“Still trying to get our arms around it”
Colorado currently has seven coal-fired power plants and six coal mines, the largest of which is West Elk in Somerset, just east of Paonia. By 2030, the state expects there will be just one unit of one coal-fired power plant left — Comanche 3 in Pueblo — and anywhere from one to three mines.
It’s Wade Buchanan’s job to oversee the Office of Just Transition and figure out, among other things, how many workers the state will need to help across the 11 counties that are most likely to see the impacts. The state has no working estimate for how many will be indirectly affected by the coming job losses.
Montrose, Moffat, Routt, Rio Blanco, Morgan and Pueblo counties are the highest priority, and there are 1,129 coal workers in those places now, the state estimates. The second tier includes 562 people in Delta (home to the North Fork Valley), El Paso, Larimer, Gunnison and La Plata counties.
“We are still trying to get our arms around it,” said Buchanan, who is the we in that statement. He’s the sole employee of the office so far. “It’s not because we haven’t been trying, but just because there’s one of us and we’re trying to be as accurate as possible.”
There’s real urgency in the counties seeing the decline. Take Rick McGaughey, who on May 7 shut down Hays Drug Store, a prominent feature of Paonia’s main drag. For the first time in 115 years, Paonia doesn’t have a pharmacy, and the owners aren’t sure where they fit in.
“Things evolve and they change and I’m not anti-change,” McGaughey said. “But you have to maintain a cohesive community. Right now, that’s really not there.”
Unlike other coal towns, this one isn’t dying. Paonia’s housing market is hot as retirees, second-home owners and remote workers have moved in, driving up prices by double from a decade ago. There’s a vibrant agribusiness and tourism scene, with fruit orchards and wineries and ranching.
“Having millions of dollars in payroll coming in fortified the community,” McGaughey said of the mining jobs, which paid $100,000 or more on average. “Now we have a lot of other workers, we have fiber internet. And why not come here? It’s a beautiful place and a lot of people can work from here.
“But they aren’t out and about and a part of the community. The coal miners were volunteer firemen, volunteer EMTs.”
The transition is evident in downtown, with the recent proliferation of shops selling succulent plants and other things that, as McGaughey’s friend Kim Johnson puts it, “you like but don’t need.” Time was this downtown had three hardware stores and a stoplight — the latter you now have to drive 25 miles away to find.
Johnson’s husband, Chris, used to load coal into two trains, each with dozens of cars, every day. Then it was one or two trains a week, and eventually he was laid off. The couple got by on 401(k) money and reinvented themselves as counselors. Their six kids moved away.
“People knew each other — a wonderful spirit of community,” Kim Johnson said. “You drive through town today, you don’t know most people.”
“This has killed my district”
A hot housing market means stable property tax revenues, but not every town has that. State Rep. Perry Will serves Moffat, Garfield and Rio Blanco counties, north of Paonia, and has seen what happens when coal declines and new business and people don’t move in.
“This has killed my district,” the Republican said flatly. He has little hope where he lives for the kind of reinvigoration happening now in Paonia.
In some counties, the coal industry is the largest taxpayer among all residential and commercial plots. It accounts for nearly half of property tax revenues in Moffat County. The state estimates it will take nearly $3.2 billion in new commercial property value — 10 times the value of the Denver Broncos’ stadium — to replace the cumulative tax revenue losses in Colorado’s coal counties.
Other Republicans who mainly represent the affected areas initially scoffed at the idea of an Office of Just Transition, calling it an insult and rejecting that a renewable-energy transition was inevitable. Now they’re coming around, with Will and Republican Sen. Bob Rankin of Carbondale sponsoring the funding bill. It’s the best available option and fighting the transition has proved pointless, they said.
The few left in the mining business want to stick around — people like Mike Ludlow, president of Oxbow Mining outside Paonia. He’s one of three workers at the shuttered Elk Creek Mine. There used to be 380.
It’ll take several years for those three to restore the former mine site to its original state before closing entirely. His colleague, Doug Smith, stood next to him outside of a large office on site that’s filled with a lot of empty space and photos of the old days.
“I show up til they tell me not to show up anymore,” said Smith, who’s been laid off before. “I just keep waiting for someone to say, OK, don’t come tomorrow.”
Some of their former coworkers stuck around in the valley. Others moved to Utah or Wyoming. Ludlow told a story from years ago when he worked for a Colorado company that shut down mines in Kentucky.
“They transferred 35 families from Kentucky to Colorado, paid for all their expenses, paid them for relocation,” Ludlow said. “One family stayed, all the rest went home.
“Not everybody is willing to relocate in new places. Some people have very deep, strong roots.”
Xcel Energy, which operates three of the state’s coal-fired plants, recognizes this, said Hollie Velasquez Horvath, senior director of state affairs and community relations in Colorado. Xcel believes they can retrain many of the 300 workers at those plants to do new jobs where they live.
But there’s a catch, she said, especially in places like Hayden, an hour’s drive from the Wyoming border.
“We can’t put solar farms and wind farms up there and make it up,” she said. “We’ve got to be more creative.”
“This is not a dodge”
For all the fears already realized and families displaced, Colorado is at the vanguard of a national “just transition” effort, which is gaining popularity among unions. Colorado’s is a first-of-its-kind project, said Dennis Dougherty, executive director of the AFL-CIO of Colorado and chair of the Just Transition Advisory Committee.
“We have a chance to make sure communities don’t become ghost towns,” he told lawmakers this month. “We heard from those in Craig and Hayden — they don’t want to leave. They love the quality of life where they are. No bones about it.”
Much of the $15 million pending in the legislature would be put to stimulate economic transitions in local communities. House Majority Leader Daneya Esgar from Pueblo said Colorado needs to support those communities hiring people like Wade Buchanan to figure out their respective next thing. Rankin said it’s critical the state let the locals lead on that, not the other way around.
Spreading $15 million around the state won’t go far. Even the bill sponsors acknowledge that. A report released Dec. 31 by the state’s Just Transition Advisory Committee made no illusions about the state’s readiness, or lack thereof, to cure coal country.
The report is filled with lofty goals — empower families and communities, attract new investment in struggling areas — but also “defers until later those decisions that might drive the higher costs we do not yet know how to pay.”
“This is not a dodge,” the report states. “It is an honest and responsible reflection of the times we are in.”
Some in the labor community think the state should prepare to put $100 million a year toward this effort for at least about five years. Even the low-end estimates — Esgar said she’s thinking more in the tens of millions, but that it’s too soon to say — are expensive.
None of the more than dozen elected officials and labor and industry leaders interviewed for this story could yet offer a projection of how much the state, energy customers and the owners of the plants and mines will each need to pitch in. Gov. Jared Polis declined through a spokeswoman to be interviewed on the present and future costs, though in a statement he said “some people will lose job they like and communities will lose major employers. We have to do what we can to make sure they have a bright future.”
Chief among the priorities, according to Frances Koncilja, who from 2016-20 served as one of the state’s three top energy-sector regulators, is figuring out all the dominoes that might fall.
“There needs to be a complete understanding of what the closure will mean in terms of jobs lost, careers lost, schools closed, property tax lost, and they need to figure out how that total sum is going to be paid to the community,” said Koncilja, adding, “It is a real hard thing for these folks but it’s not too late.”
It’s too late for Paonia High, of course, so Principal Palmer’s looking ahead. Combining the schools means being able to keep staff employed and continuing student programs like music and FFA that might’ve otherwise faced cuts. It won’t be the same as it was, he said, but it’ll be something new and good and hopefully sustainable.
And when the Paonia Eagles and Hotchkiss Bulldogs merge late this summer, they’ll nod to the region’s vanishing identity with a new nickname: the Miners.