In the past decade, U.S. power companies retired or announced the retirement of more than 546 coal-fired power units, totaling about 102 GW of generating capacity, with another 17 GW of capacity planned for retirement by 2025. As the country shifts toward clean energy sources, policymakers are increasingly recognizing the need for broad transition funding to ensure the workers and families who once relied on income from jobs related to these mines—as well as communities who depended on the associated tax revenue—are not left behind.
Over the past decade, states like Washington, New York, and Minnesota are among those that are leading the way, creating robust State Transition Funds designed to safeguard and strengthen the local economy. When built into long-term planning efforts, these transition funds can protect communities against an economic downturn.
For example, in 2011, Washington Governor Christine Gregoire signed the TransAlta Energy Transition Bill, which set a schedule to close two coal-fired plants in Centralia, Washington—one in 2020 and one in 2025—and included a $55 million fund that businesses, nonprofits, and local governments in affected communities can access for energy efficiency improvements, worker retraining and economic development programs, and new energy efficiency technologies.
In 2015, New York marked the closing of an electric generation facility by becoming the first state in the nation to provide tax base replacement for the loss of a fossil fuel generator. The Electric Generation Facility Cessation Mitigation Program provided grants to local government entities—including cities and towns, schools, and special districts—to offset the loss in tax revenue.
In Minnesota, Just Transition Fund is working with a coalition of utility companies and nonprofit partners to craft a strategy to address coal closures in communities throughout the state. The coalition conducted an analysis of the economic and social impacts of the closures based on various transition scenarios. These insights are informing planning at the local level and helping leaders at both the local and state level craft policy solutions that address the social and economic challenges that the communities on the ground are facing as a result of the closures.
STATE TRANSITION OFFICES
In addition to funds, states are also creating political offices to lead their transitions. In 2019, Colorado, became the first state to create an Office of Just Transition. Housed within the state’s Office of Labor and Employment, the Office of Just Transition is focused on creating new employment opportunities for the 2,000 workers who stand to lose well-paying jobs due to coal mine closures. The state finalized its Just Transition Action Plan at the end of 2020. Although the plan did not establish a state transition fund, it did commit to creating an, “effective and accountable governance structure to support investments in coal transition communities.”
The federal government has increasingly acknowledged the need to offer economic support to impacted communities as the energy landscape shifts. However, a nationally coordinated effort with clear timelines and strategies for the transition is lacking.
In 2015, the Obama Administration enacted the POWER Initiative, the first-ever federal funding source dedicated to helping communities most impacted by changes in the country’s energy sector, including the transition away from a coal economy. The Economic Development Association’s Assistance to Coal Communities (ACC) program -- originally part of the POWER Initiative -- remains a source of funding for impacted communities, but it does not have a big enough budget to address the needs of all impacted communities.
In recent years, Congress has taken up various pieces of legislation to support displaced workers, attract new businesses to former mining towns, and promote economic development on or near the sites of abandoned coal plants. U.S. Rep. Tom O’Halleran (D-AZ)’s PROMISE Act aimed to protect the economic viability of Navajo communities in his district and throughout the western United States by providing economic development resources to communities impacted by the closure of the Navajo Generating Station (NGS) and the Kayenta Mine, and offering job and skills training programs for displaced employees. U.S. Sen. Tammy Duckworth (D-IL)’s Marshall Plan for Coal would also support workers displaced by mine closures and ensure communities traditionally reliant on coal have the resources needed to transition to 21st Century alternatives. Each of these measures received broad bipartisan support, but neither of them passed before the end of the Congressional session.
In December 2020, Just Transition Fund, along with more than 80 stakeholder partners, launched the National Economic Transition Platform to provide the federal government with a framework for a coordinated transition strategy. Expanding on the POWER Initiative, the NET platform outlines the pillars of a comprehensive and robust set of priorities for investing in and supporting coal workers and communities.
During his early days in office, President Biden issued an executive order establishing an interagency working group on coal and power plant communities and economic revitalization. The move to coordinate transition efforts among different federal agencies is called for in the NET platform and is an important first step toward a just transition strategy. As Just Transition Fund supports local transition efforts through investment and planning assistance, it is continuing to track federal progress and ensure voices from impacted communities are an integral part of the dialogue.
Learn more about federal policies and programs that support transition efforts here.
Whether you are a state or local policymaker working to build economic incentives into your transition plan, a nonprofit organization advocating for stronger financial support in your community, or a funder exploring opportunities to invest in impacted communities, this section of the Just Transition Fund’s Blueprint for Transition offers resources to help navigate several available and pending policy options.