The Colorado Office of Just Transition, tasked with addressing the economic impacts of coal mine and coal powerplant shutdowns, announced a $150,000 grant to study the socioeconomic impact of a proposed $1.5 billion pumped storage hydropower project southeast of Craig, according to a news release.

This grant is part of the state’s attempt to economically transition rural areas in northwestern Colorado away from dependency on coal mining and coal-fired powerplants which currently provide nearly 1,000 jobs, and more than $19 million annually in property taxes in Moffat County and Craig, according to the Colorado Department of Labor and Employment.

“Colorado is helping local communities diversify their economies and creating new opportunities for people to save money. The Coal Transition Community Grant provides funding for local projects that create new jobs, help local businesses grow, and support economic growth,” Gov. Jared Polis said in the release.

The project involves building two artificial water reservoirs near Craig. Experts say the theory of pumped storage hydropower is to store water in an upper reservoir and use the water and the force of gravity to spin generator turbines by releasing it into the lower reservoir to make peak-demand electricity — in this case about 600 megawatts worth — and then to pump the water back uphill when there is excess low-cost electricity available.

“Construction time is estimated to be five to six years and is expected to generate over 300 construction-related jobs,” according to the release. “Once operational, the hydropower project is projected to employ 30 to 40 workers.”

“The Yampa Valley (Routt, Moffat and Rio Blanco counties and the communities of Craig and Hayden), which as a region is home to two coal-fired power plants and four coal mines that collectively employ almost 1,000 workers, and in 2018 paid over $19 million in property taxes to local districts,” according to the 2020 Colorado Department of Labor and Employment’s Just Transition Action Plan. The Office of Just Transition web page shows the plan “is getting updated in 2023.”

Department officials research shows it could take more than $3.2 billion in new commercial property value to replace the lost property taxes caused by the coal shutdowns.

The plan also says it may cost $100 million or more to fully implement the Just Transition plan for all the affected communities.

The grants available in this second round of funding amount to $9.6 million for all of the eligible communities in Colorado.

“This project will create new opportunities for workers in the community and support Moffat County’s economy now and in the future,” said Office of Just Transition Director Wade Buchanan in the release. “The socio-economic study will help with an important step in the permitting process, and it will help the community make the most of this economic opportunity.”