The Public Utility Commission of Texas approved Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, moving forward with the closure of the Tolk coal plant near Lubbock and the construction of a mix of renewable energy and battery storage projects. Under the decision, the plan will provide capacity including 1,100 megawatts of wind power, 322 megawatts of battery storage and 189 megawatts of solar power to serve Southwest Power Pool customers in Texas and New Mexico.
The commission also approved two gas plants to meet peak demand, but imposed caps on their capital costs. The decision gives SPS a regulatory path to replace the coal plant while retaining reserve elements intended for peak periods, rather than relying solely on an aging coal source to meet demand.
Closure date and reasons for the decision
SPS had committed in a 2020 agreement to retire Tolk no later than 2032, then later proposed moving the date up to December 2028 because of the cost of operating the plant and declining levels of the Ogallala groundwater aquifer on which it relies for cooling. Decisions issued this summer in New Mexico and Texas indicate that the plant will close in early 2029, a few months after the previously proposed date.
Sierra Club, which supported the closure, says Tolk used 1.2 billion gallons of groundwater in 2024, after its consumption reached 3.3 billion gallons in 2015. Renewable energy projects require very small amounts of water compared with a coal plant, making the decision’s impact significant in a region suffering from declining groundwater resources.
Environmental and health impact
Tolk’s emissions in 2025 amounted to about 3.2 million tons of carbon dioxide, in addition to 5.4 million pounds of nitrogen oxides and 15.5 million pounds of sulfur dioxide, according to the article. A health study prepared by Sierra Club in 2026 also links the plant to approximately ten premature deaths annually, most of them in the surrounding rural counties.
Closing the plant will also reduce the trips made by open railcars transporting coal from Wyoming to Texas, along with the associated dispersion of coal dust and particulate matter along the transportation route. However, the actual emissions and ultimate health impact after the closure will depend on how quickly the replacement projects are implemented and on the operating level of the two gas plants approved for peaking.
What changes in practice?
The decision does not represent a complete transition away from fossil fuels, as it includes the construction of two gas plants, but it shifts most of the announced replacement capacity to wind, solar and storage. It also shows that the grid reliability issue was addressed through a combination of storage and peaking resources, with regulatory restrictions on the cost of the gas plants. Open questions remain tied to the project implementation schedule, the performance of the wind contract and the new mix’s ability to meet demand in the Southwest Power Pool after Tolk leaves service.
Texas and New Mexico oversee the plant because it supplies electricity to both states. New Mexico’s regulator had previously allowed the construction of renewable energy and gas projects, but rejected granting an early exemption from renewable energy requirements and did not decide SPS’s request to classify the new gas plants as carbon-free resources.