Not everyone is sold on a $10 million golden parachute pledged to Colstrip to help the community adapt to the eventual closure of the West’s second-largest coal-fired power plant.
Washington State’s Public Council argues that the $10 million Colstrip transition package is too much and that customers of Colstrip co-owner Puget Sound Energy shouldn’t have to pony up. Public Council represents Washington consumer interests. Council’s Regulatory Analyst Carla Colamonici tells Washington utility regulators that Puget’s stockholders should pick up the tab.
“While Public Counsel acknowledges that community transition and planning will be a key issue for the community of Colstrip, Montana, that obligation is primarily a shareholder and company obligation,” Colamonici testified.
The southeast Montana town of Colstrip, population 2,300, is dependent on the power plant and adjacent coal mine for the bulk of its employment. The coal-fired power plant is one of the nation's biggest carbon dioxide polluters, according to the Environmental Protection Agency. It has come under increased political pressure to close over climate change concerns.
Washington’s Utility and Transportation Commission is considering a legal settlement that would resolve several rate issues for Puget Sound Energy, while also setting terms for the utility’s exit from Colstrip power plant. Puget owns the largest share of Colstrip, which is co-owned by six utilities.
That settlement also puts the end of Colstrip’s “useful life” at Dec. 31, 2027, two decades ahead of earlier estimates for the youngest of the power plant’s four units. The power plant’s oldest units are slated for closure within five years. Coal advocates have argued that there are more than 10 years of life remaining in Units 3 and 4, the power plant’s youngest generators.
Public Council also contends that Units 3 and 4 could be online until 2035, though its concern is that raising money for the Colstrip plant’s 2027 closure will increase the rates paid by Puget’s customers too steeply. A 2035 end-of-life plan would stretch the cost burden over 18 years of utility bills.
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Puget has said it might not exit Colstrip by 2027, but would be financially ready under the settlement. The “useful life” date sets the timer on how long Puget has to bill customers in order to raise closure money. Two of Colstrip Power Plant’s utility owners in Oregon and Washington are circling 2030 as the end of Colstrip’s “useful life.”
Five years ago, Colstrip’s utility owners were in agreement that Units 3 and 4 would burn into the 2040s. But environmentally conscious consumers in Oregon and Washington began demanding changes. Oregon lawmakers in 2016 passed a law requiring PacifiCorp to stop supplying coal power to the state by 2030. The law required the same of Portland General Electric by 2035.
PGE has since estimated Colstrip’s useful life to end by 2030. PacifiCorp is required to do the same. Avista Corp., a Spokane, Washington, utility, now puts the life expectancy of Units 3 and 4 at 2037.
Only NorthWestern Energy, which has about a half-million Montana customers, estimates that Units 3 and 4 will operate for another 28 years.
Natural gas and renewable energy are expected to fill the void as Puget Sound Energy transitions from coal. The settlement requires approval by the Utility and Transportation Commission to be final.
Washington Utility Commissioners are expected to rule on the settlement later this fall, or by year’s end.