A second Colstrip power plant owner has committed $3 million to help its host community transition beyond coal.
Avista Corp. announced the contribution Tuesday as it cleared the way for its $5.3 billion sale to Hydro One, of Ontario, Canada.
"This commitment is not intended as a 'cap' of the amount that Avista/Hydro One may ultimately contribute to help the Colstrip community transition from coal-fired generation," the company said in a settlement, which is intended to compel Washington State utility commissioners to approve the pending sale. Approval hasn’t yet been won, but is more likely with the claims of third party groups now satisfied.
A handful of environmental and trade groups in Washington agreed to settle claims over the proposed sale, provided that Avista agree to help Colstrip with transition funding. Avista also agreed to be financially ready by the end of 2027 to shutter the power plant's newest units.
Avista has not agreed on an actual shutdown date for Colstrip, which it indicates could operate until the mid-2030s.
Avista did not respond to Lee Montana inquiries by press time.
In announcing the settlement on its website, Hydro One put a $44 million value on the concessions made.
The two companies must repeat the approval process before utility commissions in all five states where Avista has customers, including Montana, where the utility owns Noxon Rapids Dam and serves several dozen ratepayers in that area.
The Natural Resources Defense Council made the request for Colstrip transition funding.
“We see what the writing on the wall is for these large coal plants, not only in the West but around the country,” said Noah Long, NRDC attorney. “And we’ve seen a lot of cases where there’s a promise to keep this power plant burning, followed by ‘sorry, we’re out of here tomorrow.’ ”
NRDC made a similar request of Colstrip power plant co-owner Puget Sound Energy last year as the utility negotiated new rates in Washington. Puget agreed to $10 million in Colstrip transition funding, among other concessions, in order to settle third party claims against the rate case.
“I think anything is better than nothing,” said Lori Shaw of Colstrip United, which advocates for coal and Colstrip. “Honestly, any help is a good thing. There’s going to have to be a lot done.”
Colstrip Mayor John Williams hadn’t seen the settlement, but the $3 million would help, he said. Last week, the City of Colstrip last asked for a seat at the table when Montana’s Public Service Commission takes up the Avista/Hydro One sale in the coming months. Both the town and AFL-CIO of Montana have intervened to advocate for community protections.
There were other Montana-specific concessions made in the Washington settlement, namely with the future use of Colstrip’s transmission lines.
Colstrip is serviced by two 500-kilovolt lines that deliver electricity from the southeast Montana power plant to millions of users in Washington and Oregon.
Renewable energy developers have hopes of using whatever transmission space is freed up by the Colstrip power plant to deliver electricity to the Pacific Northwest.
But there’s a problem. Currently the transmission line is reserved for Colstrip power only, at least over a span of 90 miles where the line is owned by the federal Bonneville Power Administration.
As Jeff Fox of Renewable Northwest explained, even one of Colstrip’s six utility owners couldn’t transmit power across the line if the electricity wasn’t generated by Colstrip power plant.
Avista has agreed to work with Bonneville, the state of Montana and other Colstrip owners to clear up transmission issues so non-Colstrip power can travel the line once Colstrip power production declines. And there will be a decline within five years as Colstrip Units 1 and 2 retire no later than 2022.
If the settlement is approved, Washington-based Colstrip stakeholders Avista and Puget Sound Energy will have contributed $13 million to Colstrip’s transition to a post-coal economy. The Washington utilities will also be synced up to be financially ready by Dec. 31, 2027, for Colstrip’s eventual closure. The 2027 date is identified as the end of Colstrip’s “remaining useful life” by Avista, but only for financial planning purposes.
Washington utilities are facing increasing political pressure to address climate change by abandoning coal power. Similarly in Oregon, Colstrip stakeholders Portland General Electric and PacifiCorp are required to stop delivering coal power to customers.
PacifiCorp must end coal power transmissions by 2030. Portland General Electric must stop by 2035. PGE will begin tapering off coal power by 2025 and be almost off by 2030. Renewable energy must also be half of PGE’s portfolio by 2040.
The other two Colstrip stakeholders are NorthWestern Energy in Montana and Talen Energy of Pennsylvania.
Talen and Puget Sound Energy own Colstrip Units 1 and 2 equally and have agreed to close them within five years to settle an air pollution lawsuit. Talen has 30 percent ownership of Unit 3.
NorthWestern Energy owns 30 percent of Colstrip Unit 4 and has an agreement for power from Unit 3 if needed. NorthWestern expects those units to operate into the 2040s.