The first few months of 2026 will help determine whether Colorado Springs Utilities still plans to close the coal-fired Ray Nixon Power Plant by the end of 2029.

The Nixon power plant south of Fountain has been scheduled to close by the end of the decade to meet Colorado’s goals to reduce emissions and decarbonize the power system. This year, Utilities began asking the state about delaying the closure if they could not find a reasonable way to replace the power currently generated.

Early next year, Utilities will propose a new electric integrated resource plan to outline how it will meet the city’s electrical goals in the near future. The last iteration of the plan from 2020 determined that natural gas units were an affordable replacement for the coal at Martin Drake Power Plant, which helped lead to its decommissioning.

Utilities CEO Travas Deal said the plan may request extending Ray Nixon’s operations until 2040 at the latest while the municipal agency works on alternatives. The power plant opened in 1980 and provides around 260 MW of power with a combination of coal and natural gas generators.

“As soon as we find a more cost-effective option, we will commit to getting it offline as soon as we can, but we have to be able to find better options first,” Deal said.

Changing the retirement date for the power plant is not just about the local utility’s plans. The closure would need approval by the Environmental Protection Agency and the Colorado Air Quality Control Commission, the appointed body that helps the Department of Public Health and Environment oversee air pollution issues in the state.

A study released Dec. 4 by the Colorado chapter of the environmental organization Sierra Club and the Applied Economics Clinic dug into the potential costs of that delay.

The study looked at four different options for Utilities to power generated by Ray Nixon: coal, natural gas, nuclear power and a combination of renewable sources. The report found that both natural gas and ‘clean’ renewable sources would match the cost of continuing with coal, while meeting or exceeding its energy output and meeting the state emission rules.

Matt Gerhart, who represents the Sierra Club’s Colorado chapter, said the study came about earlier this year when Utilities first suggested that they might extend the timeline for closing Ray Nixon. The report was primarily focused on the potential costs for the delay and raising questions about the utility’s reasoning for continuing use of the coal generators.

“CSU knows how to do this, they just replaced Drake with a set of renewable resources. It’s been hard to understand why they wouldn’t just repeat that playbook,” Gerhart said.

The six natural gas generators that replaced the coal power at Martin Drake can produce 150 MW of power.

Deal said there were a few issues with the cost estimates in the Sierra Club report. One was that the projected renewable costs did not reflect the upcoming expiration of federal tax credits for wind and solar projects in 2026. Deal said that recent estimates from contractors submitting bids for renewable projects have been far above what Utilities expected.

Gerhart argued that any uncertainties about the renewable options don’t compare to the cost for a small modular nuclear reactor. The report estimated that pursuing nuclear power would be between $500 million and $700 million more expensive than any other outcome. A small modular reactor has never been built in the United States, and the first one won’t break ground in Tennessee until next year, so the construction cost is almost entirely hypothetical.

“The gap between an SMR and the other options is huge,” Gerhart said. “Even if we assume that the renewable costs are 20% or 30% more expensive, it doesn’t change that conclusion.”

Utilities staff did not meet with the Sierra Club while the report was being finalized in the fall. The two groups met on Dec. 12, which Gerhart said allowed them to go over the report in-depth and receive Utilities comments.

CDPHE spokesman Zachary Aedo said that a formal hearing would need to be held with the Air Quality Control Commission in order to change the plant’s retirement date. That meeting has not been requested by Colorado Springs Utilities.

The closure timeline for the plant is also reflected in the state’s Pollution Reduction Roadmap, which sets incremental goals through 2050. Deal said in the later years of that effort, cities ahead of schedule in some areas will be able to change the timeline for other measures if changes prove too expensive or unreliable.

“Those aren’t available at the 2030 checkpoint. If those were there, we wouldn’t need to have the conversation because we have already met that goal,” Deal said.

Deal said that Utilities planned to work with state legislators during the 2026 session to try and add more offramps to the pollution roadmap.