Reinventing a Blue-Collar Economy Around Green Energy
Energy Report: A vision has been percolating in Pueblo
Image courtesy of Chuck Beard.
A vision has been percolating in Pueblo, one focused on the opportunities becoming evident as big money slides into the effort to decarbonize the economy. Pueblo, they say, should brand itself as the renewable energy hub of not just Colorado, but more grandly yet, the southwestern United States.
That conversion from coal to renewables has already begun in Pueblo, Colorado’s rust-belt industrial city of 111,000 people. A decade ago, Pueblo got a Vestas factory that is the world’s largest manufacturer of wind towers. Then, in 2017, Xcel Energy announced it wanted to close two of its three giant coal generation stations at Comanche Generating Station in 2023 and 2025, a decade earlier than originally planned. The lost generation will be replaced by wind and solar, the latter primarily in the sun-soaked Pueblo area.
Then there’s Evraz, the steel mill once called Colorado Fuel & Iron and, at its peak, an employer of 15,000 people, 9,000 of them in Pueblo. It was long Colorado’s largest employer. Last year it had 979. The mill produces seamless pipes and wire rods; but most of all, it produces rails, 25 meters long. It owns about 40 percent of the nation’s rail business.
In around 1973, CF&I converted the blast furnaces from coal to electric arc. The steel mill was and still is Colorado’s No. 1 consumer of electricity.
Now, the plant could become the first solar-powered steel mill in the country. Evraz has plans for a solar farm of up to 240 megawatts. Xcel will ensure Evraz has the power it needs 24 hours a day, but Evraz will supply as much electricity to the grid as it consumes. The solar farm is not yet a sure thing, in large part dependent upon the Moscow- and London-based directors of Evraz approving a new mill to produce 100-meter-long rails, as now favored by railroads. That will cost $500 million, offset by $100 million in tax incentives.
Terry Hart, a Pueblo County commissioner, credits the idea of a renewable energy hub to the late Ross Vincent, a chemical engineer. The vision Vincent articulated seven or eight years ago has gained traction, as evidenced by the Pueblo City Council’s February 2017 adoption of a resolution calling for 100 percent renewables for electrical supply. Pueblo County adopted the same goal a year later. “For that to happen in an industrial town, I think is amazing,” Hart says.
Pueblo was — and still is — a gritty, blue-collar place. It was never a coal town, as such. The coal came from Crested Butte, the mines clawed into the foothills west of Trinidad, coke created in the beehive ovens at Redstone. Coal provided the foundation for Pueblo’s lunch-pail work in manufacturing and transportation.
For much of the 20th century, Pueblo was Colorado’s second largest city. It’s now 10th. And it’s been dragging economically, too. The median household income stands at $35,800, compared with $62,500 for Colorado. The poverty rate stands at 25 percent, nearly twice that of the state as a whole. Unemployment is at 5 percent, compared with 3.8 percent for Colorado.
But home prices are cheap, a median of $169,000 compared with $377,000 for Colorado; and a cost-of-living index of 86 compared with the national average of 100 and 108 for Colorado.
Studying these and other numbers, Assistant State Economist Brian Lewandowski sees the Pueblo economy as underperforming but primed for growth. “Given the assets it has, it seems like an economy that should be performing better than it has been,” he says.
Those assets include access to the mountains and trails, good transportation via I-25, railroads and relative proximity to airports. He also points to the city’s water portfolio, perhaps the best of any municipality along the Front Range, sufficient to absorb great economic expansion and population growth.
Cannabis cultivation has become a strong economic force to supplement chemicals manufacturing, aerospace and defense along with other, mostly smaller, sectors. Parkview Medical Center, with 2,293 employees, has the largest payroll.
Can Pueblo leverage renewable energy to become an industry cluster, comparable with the way that Boulder has a reputation for organic products, or Denver for pharmaceuticals? When businesses cluster, they gain a comparative advantage, Lewandowski says.
“That can certainly happen, but those things in isolation don’t necessarily fix some sort of systemic problem in your economy,” he says.
The 760,000-square-foot factory operated by Danish wind company Vestas inspires hope. The factory, opened in 2010, is the world’s largest manufacturer of towers, producing 1,100 annually. Pueblo’s centralized location gives it an advantage, Vestas’ website says. The company employs 900 and, in a presentation to the Pueblo City Council in May, says it needs more: 50 welders, 20 industrial painters and 20 other manufacturing laborers. Company representatives have reported a five-year backlog of orders.
David Cockrell, a former college administrator and a member of advocacy group Pueblo’s Energy Future, says Vestas illustrates the dovetailing of the old with the new. “Vestas was a big thing, but it wasn’t because they were going to build wind towers. It was because they needed 600 welders,” he says.
Xcel Energy’s plans push the renewable energy opportunities into sharper focus. The utility will close two of the three coal plants at Comanche, replacing the lost generation with 1,100 megawatts of wind at various locations in eastern Colorado, but also 700 megawatts of solar, mostly around Pueblo. The 675 megawatts of solar plus battery storage near Pueblo being developed by NextEra Energy Resources will likely be the largest in the world of its kind, says NextEra’s Jennifer Herron, a project manager.
A series of large solar panels at a power plant in the San Luis Valley of central Colorado. Courtesy of Karina P. Habich.
“Pueblo has the most ‘bankable’ solar in the country,” says Mike Kruger, chief executive of the Colorado Solar and Storage Association. Deserts of the Southwest get more sunshine, but also disabling heat. Colorado’s San Luis Valley’s higher elevation gives it better solar irradiance, but it lacks transmission. Pueblo, at 4,700 feet and proximate to transmission built to dispatch electricity from the Comanche station to metropolitan Denver-Boulder, occupies the sweet spot. An existing solar farm near Comanche was, when completed several years ago, the largest solar farm east of the Rocky Mountains.
Education lags, though. Pueblo County has the lowest percentage of population with educational attainment of bachelor’s degrees or higher, 21.7 percent, of any metropolitan county in Colorado. Next up are Weld County (Greeley) 27 percent, Mesa County (Grand Junction), 27.2 percent, and El Paso (Colorado Springs) 37.3 percent. Denver has 46.5 percent and Boulder 60.4 percent.
Having high education levels may not matter in a manufacturing town, but renewable energy does require advanced training. Pueblo Community College is gearing up to produce technicians for a wide range of applications. The two-year school already has an industrial technology maintenance program that administrators plan to augment with an alternative energy component, especially solar, says Jenny Sherman, the dean of business and advanced technology. She reports a 7.5 percent projected demand growth for workers with skills needed in the solar sector. Wages range from $13 to about $20 an hour. Skills needed for solar are easily transferrable to wind energy.
Among the first students will be Brandon Vialpando, a 2009 high school graduate in Pueblo who had been working at a distribution center in Pueblo for Target, the retail chain. The timing has worked out perfectly. This new opportunity, he says, “has given me a lot of drive.”
Ben Fowke, Xcel Energy’s Minneapolis-based executive, was at the college in May to donate $50,000 to help create a living laboratory for solar energy. NextEra Resources, Xcel’s partner in building solar and wind farms, has previously donated $80,000 in materials, including 52 solar panels, and labor.
“I can’t think of a better city to visit,” Fowke says, which is perhaps what utility executives feel compelled to say when visiting places where they have several billion dollars of infrastructure. What he said next seemed more honest. “This is truly the epicenter of the clean energy transition.”
Fowke vows that Xcel will, as it closes its coal plants and shifts generation to renewables, “find new jobs for people who want to stay within the community” and have been impacted by the clean energy transition. “Getting to 100 percent will require some new technologies,” he adds, alluding to Xcel Energy’s mid-century emissions-free goal. “We need the skilled labor force.”
Pueblo County sees renewable energy as a way to expand job opportunities, to provide new points of entry for demographics that have lagged economically. “We would like to see this transition become more inclusive of some of those members of the community and workforce,” says Laura Getts, energy coordinator in the county’s office of Economic Development & Geographic Information Systems.
Blue-collar unions have been a staple in Pueblo for a century. Most of the 800 Evraz employees belong to the United Steelworkers, making an average $60,000 to $65,000 before benefits. Comanche workers are also unionized. Many question just how well they will fare in the energy transition, whether renewables will pay as well as fossil fuels have.
Allied unions also are guarded. “Renewables until recently have not had labor in mind,” says Jason Wardrip, the business manager of the Colorado Building Construction Trade Council. Of the union’s 10,000 members, 1,500 are in the Pueblo area. “The vast majority of the renewable plants, solar and wind, are not being built union,” he says. He expresses hope that will change, but he warily also notes that renewable projects require less labor to build and maintain.
Economics trump the environment in this town that defied its Democratic traditions and narrowly voted for Donald Trump in the 2016 election. But both matter. Hart, the county commissioner, has been involved in an effort to investigate municipalization of the electrical supply. He and others went to Boulder, which had already launched such an effort. But in Boulder, concerns about climate change drove the effort, with economics of renewable generation coming in second. In Pueblo, he says, it’s reversed.
“Pueblo is a poor community, and so the economics are always No. 1. But the environment is not far behind,” he says. “If we just push environmental issues and ignore the economic cost of it, our citizens would not be pleased with us. But if we push the economics and the environmental advantages, too, then they are pleased.”
Renewable energy might be a valuable ideal, says Corrine Koehler, a stockbroker and former city council president, but it cannot be isolated from Pueblo’s broader conversation. The reason so many of Pueblo’s better paid workers flee northward to homes in Colorado Springs or to a suburb called Pueblo West are complex. Schools are failing in a classic inner-city conundrum. Too many houses in the older neighborhoods have boarded up windows, too many cars parked on lawns. “We need to clean up the city,” she says. “We need beautification.” That, combined with improved broadband and other connectivity, might be just as valuable as a focus on renewable energy.
Pueblo has been reinventing itself for a long time. The U.S. steel mill reeled in the late 1970s and 1980s, and the good paychecks that were possible for somebody with a high school education or less dwindled. One response was creation of Pueblo Economic Development Commission in 1981, which has been financed by a half-cent sales tax since 1985. It claims credit for producing 9,500 jobs.
Patty Erjavec, a Pueblo native and president of Pueblo Community College, sees need to place a higher value on education as Pueblo continues to transform itself. A strong work ethic, instilled in her by her parents, allowed her to put herself through college, the first in her family, before going on to get a master’s and then a Ph.D.
Pueblo, for all its problems, has that work ethic, too.
“There are a lot of very committed people working very hard to move the community forward. Collaboration between business and industry and higher education to meet the needs of a very global economy is first and foremost on many of our minds,” she says. “To Colorado, I say, ‘Don’t give up on Pueblo.’”