Texas PUC Greenlights Coal Plant Closure and Renewables Construction, Saving Millions of Gallons of Water Every Year

AUSTIN, Texas – The Texas Public Utility Commission (PUC) ruled today that Southwestern Public Service Company (SPS) can proceed with closing its Tolk coal plant near Lubbock and constructing renewable energy and battery storage to provide reliable, clean electricity to Southwest Power Pool customers. While also approving two new gas peaker plants in Texas – with strict cost caps – the PUC’s decision paves the way for significant water savings and enough renewable energy to power about 375,000 homes in Texas and New Mexico, including 1,100 megawatts of wind, 322 MW of battery storage, and 189 MW of solar. (Note: Commissioners take up this item at 4:10 in the video, and discuss Chairman Gleason's cost cap recommendation.)

STATEMENTS FROM SIERRA CLUB

“Contrary to what the people in power want us to think, there is a common-sense path in Texas to transition away from expensive, dirty, thirsty coal,” said Josh Smith, a Sierra Club Environmental Law Program attorney who has worked on the Tolk plant for years. “Texas doesn’t need coal anymore – even as it prepares for increased demand – and today’s decision clearly shows that. When Tolk closes, it will save abundant water in a drought-prone region, millions of ratepayer dollars, and eliminate millions of tons of harmful pollution every year, making rural West Texas a healthier place to live.”

“These solar, wind, and battery storage projects are clearly the most cost-effective and efficient means of replacing the aging and increasingly expensive Tolk coal plant while also maintaining system reliability, saving scarce groundwater resources, utilizing existing transmission rights, and reducing harmful pollution,” said Cyrus Reed, the Legislative and Conservation Director of the Lone Star Chapter of Sierra Club.  
 

BACKGROUND

SPS (owned by Xcel Energy) first said it would retire Tolk no later than 2032 due to a 2020 agreement with Sierra Club and agreed to study an even earlier retirement based on the plant’s costliness and declining levels of the Ogallala Aquifer, which the plant depends on to operate. SPS then proposed retiring the plant in December 2028, and this summer’s decisions from New Mexico and the Texas PUC confirm a retirement just a few months later, in early 2029. Retiring Tolk has long made sense considering how much water it withdraws from the rapidly depleting Ogallala Aquifer to cool its coal-burning boilers. According to Sierra Club’s new analysis Watts Wasting Texas Water, in 2024, Tolk used 1.2 billion gallons of groundwater. As recently as 2015, the plant consumed 3.3 billion gallons of water in a single year. Renewables use negligible water resources. 

The Tolk coal plant is in Sudan, about one hour northwest of Lubbock. Tolk is regulated by both Texas and New Mexico's utility oversight agencies because it provides power to both states. Earlier this summer, the New Mexico Public Regulation Commission permitted SPS to proceed with construction of the renewable energy and gas plants, while also ruling that it couldn’t receive an early exemption from New Mexico’s renewable energy requirements. It also declined to rule on the company’s request to treat new gas-fired power plants as zero-carbon resources (SPS claimed it would be helping to electrify the oil and gas industry in the Permian) under the state’s Energy Transition Act. For their part, Texas regulators placed capital cost caps on the gas plants, and production expectations on the wind contract. 

Closing Tolk will result in fewer trips by open-air railcars hauling coal from Wyoming to the plant in Texas, a harmful part of the mine-to-plant life cycle where coal dust and particles fall into rivers, streams, and lakes and dust pollutes the air for people living near the tracks. And, in addition to the water savings, closure will irrefutably clean the air: In 2025, Tolk released 3.2 million tons of climate-warming carbon dioxide emissions, 5.4 million pounds of toxic nitrogen oxide pollution, and 15.5 million pounds of sickening sulfur dioxide emissions. A 2026 Sierra Club health analysis found that the plant is associated with 10 premature deaths every year, most of which are in the surrounding rural counties. Many of coal’s negative health impacts can be reversed immediately after a plant’s closure, according to a New York University study.