Texas Regulators Clear Path for Coal Retirement and New Clean Energy Buildout

Texas utility regulators have given Southwestern Public Service Company (SPS) the go-ahead to shutter its aging Tolk coal plant outside Lubbock and replace it with a mix of wind, solar, and battery storage. The decision also allows two gas peaker plants to move forward, but only under firm cost caps designed to protect ratepayers.

The clean energy portfolio approved for construction includes roughly 1,100 megawatts of wind, 322 MW of battery storage, and 189 MW of solar — enough to serve about 375,000 homes across Texas and New Mexico. For a region that has watched the Ogallala Aquifer dwindle, the water angle is especially important: the Tolk plant drew 1.2 billion gallons of groundwater in 2024 alone, while renewables require almost none.

Beyond water savings, closing the plant promises cleaner air. The facility emitted millions of tons of carbon dioxide and millions of pounds of nitrogen oxide and sulfur dioxide in 2025, and health researchers have linked it to premature deaths in surrounding rural counties. Shutting it down also means fewer coal-hauling railcars crossing the region, cutting dust and pollution along the route.

The move follows years of analysis showing that the coal plant had become increasingly costly and thirsty. SPS had once targeted a retirement no later than 2032, then proposed 2028; the recent approvals from both Texas and New Mexico regulators now point to an early 2029 closure. The replacement projects are expected to lean on existing transmission rights and deliver power at a lower cost than the old coal unit.