As Washington state regulators assess early plans to shutter half of Colstrip Power Plant, third-party witnesses are attempting to influence the outcome.

Hearings have been held in Olympia, Washington, where Puget Sound Energy is laying out its multi-year plan for future customer rates and the shutdown of Colstrip Units 1 and 2, among other things.

Much is at stake for southeast Montana and Colstrip. It's estimated that shuttering Units 1 and 2 will create a $500 million loss in income during the first three years. 

These are some of the recommendations being made by third parties concerning Colstrip. Traces of these recommendations could show up in a ruling by the Washington Utility and Transportation Commission later this year, or in a settlement put forth by Puget and the intervening groups, of which there are several:

  • Natural Resources Defense Council: Expert witness Thomas Power is calling on Puget Sound Energy to develop a “community and worker transition program” to get Colstrip through the negative economic consequences of shutting down Colstrip Units 1 and 2 within the next six years.

NRDC, Renewable Northwest and NW Energy Coalition are partnering in an effort to address Puget’s future plans for Colstrip power plant, where the owners of Units 1 and 2, Puget Sound Energy and Talen Energy, have agreed to shut down the units within six years in order to settle an air pollution lawsuit. The units slated for closure are the oldest of the power plant’s four units. Retirement dates for Colstrip Units 3 and 4 are also being discussed in Puget’s rate case.

Power, a University of Montana economist emeritus, told The Gazette earlier that Puget needs to be making plans with the Colstrip community and workers to minimize the economic outcome of shutting down 1 and 2.

The taxes on which the Colstrip municipality and Colstrip public schools depend are going to decrease. The property values of local homes and businesses will also take a hit. There won’t be as many mining or power plant jobs after Units 1 and 2 shut down, Power estimates.

Rosebud County, where Colstrip is located, is the fifth most dependent county in the nation on federal coal for employment, with 13.6 percent of its jobs in mining or power generation, Power testified.

There will be millions spent in Colstrip on the shutdown and cleanup of the Colstrip Units 1 and 2, by Puget’s own estimates. Power said there needs to be a plan to make sure Colstrip residents are doing the work.

“What is needed is a thoughtful collaborative effort of the owners and representatives of the community to integrate all the expected changes in economic activity, not just the negative ones, with a community and worker assistance program,” Power told the UTC. “The owners’ contribution to such a transition program should not be limited to only those remediation efforts they are legally required to carry out.”

Power points to three power plant closures in other states where companies spend millions to make up for lost property taxes to local schools and city governments. The Diablo Canyon nuclear plant's closure plan of 2016 was an example of a company agreeing to spend $75 million to offset property tax losses spread over nine years.

One would hope, Power said, that Montana will also be willing to spend its coal tax trust funding, created by taxes on the coal revenue, to help out Rosebud County.

  • Renewable Northwest: When Colstrip Units 1 and 2 go dark, there will be space on the enormous power lines connecting Colstrip to the Pacific Northwest.

Renewable Energy Northwest is asking the WUTC to require Puget Sound Energy to make sure that transmission line capacity freed up by closing the older units be put to use. Puget would have to start planning now to get power on the line quickly when Colstrip’s oldest units shut down.

That new power would likely be wind. Clearwater Energy is laying the groundwork for a wind farm near Forsyth with enough energy to power 300,000 homes. The Clearwater Energy project is a 300 megawatt development, which would be slightly less than the energy freed up by the Colstrip units.

Outside of the rate case discussion, Renewable Northwest has been advocating for transmission changes that would benefit Clearwater. It argues that Montana wind works well for Pacific Northwest utilities because the power generation peaks in the winter, when energy from Columbia River dams loses its punch.

Within the rate case discussions, regulators have said talk of replacement power sources is premature.

There’s an incentive for Puget to fill the energy void created by the Colstrip units shutting down. That incentive is cost share with Puget Sound Energy customers, who the utility can expect to shoulder some of the transmission line’s cost only to the extent customers are benefiting from the power line.

  • The Sierra Club is speaking to Puget Sound Energy’s plans to pay for the decommissioning and remediation of Units 1 and 2 with treasury grants and tax credit revenue. But Puget Sound Energy and the four other utilities with ownership in Units 3 and 4 should be planning now for the costs related to shuttering those units.

There’s a fairness issue related to collecting shutdown costs from customers after a power plant has closed. Not all of those customers will have benefited from the power plant when it was operating. Billing customers for costs unrelated to their service is considered inappropriate.

Puget Sound Energy is proposing an end-of-life date of 2035 for Units 3 and 4. The company had previously put the life expectancy of the units into the 2040s.

Avista Corp., of Spokane, Wash., Portland-based utilities Portland General Electric and PacifiCorp, also have ownership shares of Units 3 and 4. Those utilities also indicate they will be cutting off Colstrip coal power to Pacific Northwest customers no later than 2035.

NorthWestern Energy, which powers half of Montana and has a partial share in Colstrip Unit 4, expects that unit to run until 2046.

Sierra Club witness Ezra Hausman is recommending Units 3 and 4 shut down in 2024, just two years after the no-later-than closure date of 2022 for Units 1 and 2. Units 3 and 4 are under pressure to close by customers of utilities in Oregon and Washington that have ownership shares in the younger units.

In the Colstrip community of 2,300 there’s not much awareness of the discussions surrounding Puget Sound Energy’s rate case.

Colstrip Mayor John Williams told The Gazette the community had hoped the 2017 Montana Legislature would pass a bill demanding concessions from Puget or any power plant owner attempting the exit. Senate Bill 338 required an exit plan as well as compensation for lost taxes, but it also asked for property owner compensation for declining land values related to closing the power plant. The bill died after opponents warned that attracting future industries to the state would be difficult if SB 338 passed.

Montana was granted a seat at the bargaining table in the Puget Sound Energy rate case, but made no recommendations about Puget’s proposal by a June 30 deadline. Attorney General Tim Fox said he chose not to file anything because he didn’t want to limit the state’s future options by revealing its legal strategy.

Later attempts by the attorney general to submit testimony in the case were objected to by other parties and later not allowed into evidence by the administrative law judge overseeing the proceedings.

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Politics and agriculture reporter for The Billings Gazette.