In the next week or so, Washington regulators will rule on a major utility rate case affecting 1.6 million customers in their state and coal-fired plants in Colstrip.
Colstrip supplies 20 percent of the power distributed by Puget Sound Energy, which owns 50 percent of Colstrip Units 1 and 2 and about 25 percent of Units 3 and 4. Together, the four units and the coal mine that fuels them provide most of the jobs and nearly 80 percent of the tax base for the town of 2,300 Montanans.
Two points in this case before the Washington Utilities and Transportation Commission directly affect Colstrip. A settlement agreement signed in September by PSE, Montana Attorney General Tim Fox, the Sierra Club, National Resource Defense Council, Northwest Energy Coalition, Renewable Northwest and Natural Resources Defense Council proposes that:
- PSE will pay $10 million to help the community of Colstrip transition with the closure of Units 1 and 2 by the middle of 2022. Details of how that money will be paid have not been set, but PSE has said it should include worker retraining.
- PSE will accelerate payoff of its share of debt on Units 3 and 4, so it is completely paid off in 2027. This would require an increase in PSE customers’ rates. Units 3 and 4 wouldn’t necessarily close in 2027.
The WUTC is deciding whether to accept the proposed settlement. All parties signed it, except for the Washington state consumer advocate.
Talen, the company that owns the other 50 percent of Units 1 and 2, isn’t a regulated utility; it markets power to utilities and other customers. Talen hasn’t agreed to payments to assist the Colstrip community, but it will be legally responsible for a share of the cleanup costs that are still being calculated by the Montana Department of Environmental Quality.
As a net energy exporter, Montana is largely at the mercy of distant markets and forces beyond our control. Montana law and leaders must hold energy producers accountable for the impacts they incur in our state.
Colstrip 1 and 2 will require “decades of cleanup” with costs running over $100 million, according to Steve Secrist, PSE senior vice president and general counsel. Secrist, who helped negotiate the proposed rate case settlement, said the cleanup will create nearly 100 jobs, approximately as many as would be lost at the plants with the closure.
“The need for people to help with remediation is such that no people will be out of work with the step down from 1 and 2,” Secrist said on a recent visit to Montana.
State Sen. Duane Ankney, R-Colstrip, is skeptical. There will be loss of jobs, he told The Gazette, noting that coal miners will no longer be mining to supply the two closed units.
Secrist said remediation will create “family wage jobs.” “We want to get solutions, retrain employees, certify them to give certainty to families that they will have work for the next 20 years,” Secrist said.
“If they assimilate the plant workers, what about the miners?” Colstrip Mayor John Williams asked when The Gazette called for his opinion on the proposed $10 million transition fund. “I don’t know how the $10 million will come, if and when that occurs.”
We suggest that PSE representatives meet with the Colstrip city council to discuss the impending shutdown and how that $10 million fund should work.
Regardless of the WUTC decision, Units 1 and 2 are scheduled to close by July 2022, under a court-ordered clean air settlement. Out-of-state customers for the plants’ power are demanding cleaner energy sources, which also are less expensive.
Change is coming to Colstrip. Coal-fired plants will still produce power for years to come, perhaps many years. The community deserves help in developing new industries.
Last spring, Ankney sponsored Senate Bill 338 that would have held PSE and Talen responsible for transition costs such as loss of local residential and commercial real estate value, outstanding government bond debt that was issued with the expectation of repayment with plant tax revenues and money for transitioning and retraining workers. The Gazette editorialized in support of SB338, which sailed through the Senate, but was killed in House energy committee where lobbyist argued the bill was bad for business. In March, a Gazette opinion said that legislation would be an important start on helping Colstrip.
Now the PSE rate case settlement is an important step in keeping a community that has always depended on coal viable in a changing energy market.