New Study Finds Delaying Retirement of Ray Nixon Coal Unit Will Increase Long-Term Costs

DENVER - Delaying the retirement and replacement of the coal-fired Ray D. Nixon Unit 1 in Fountain will likely increase long-term costs for customers, according to a new study by Applied Economics Clinic. In 2020 and again in 2022, Colorado Springs Utilities (CSU) and its board committed to retire the Nixon coal unit by the end of 2029. But throughout 2025, CSU staff has said that the Utilities is considering delaying the retirement of Nixon Unit 1 for an undermined amount of time, in part to replace the unit with a nuclear small modular reactor (SMR). CSU has not proposed any alternative retirement deadline to the current 2029 retirement deadline.

The study examined the long-term costs of continuing to burn coal at Nixon Unit 1 compared to three options for retiring and replacing the coal unit: renewables and battery storage; converting the unit to burn gas, plus renewables and battery storage; and SMR. The study finds that replacing Nixon with a nuclear SMR plant is the most expensive option, by far - nearly double the cost of some other options. Burning coal at Nixon for the long run is the second-most expensive option.

"CSU's claim that it will save customers money by delaying the retirement of Nixon to pursue a new nuclear plant makes no sense, given that nuclear is the most expensive option," said Sarah Tresedder, Senior Climate and Energy Organizer with Colorado Sierra Club."Renewable wind, solar, and storage is available today, is far cheaper, and would avoid another decade of pollution from the coal plant."

Customers would see the most savings if CSU rapidly pursued clean energy capacity before federal tax credits expire. Other utilities, such as Xcel, Colorado's largest electricity utility, and United Power, are expediting the procurement of wind and solar to reap this benefit.

​"CSU should take the smart way forward and take advantage of federal tax credits for wind and solar before they expire," Tresedder said. "And at a time when affordability is so critical for our communities, a delay will only saddle families and businesses with unnecessarily higher costs."

About the Sierra Club

The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit https://www.sierraclub.org.