Montana’s attorney general wants Colstrip Power Plant’s newer units taken off the table in a Washington hearing where Puget Sound Energy is discussing the coal-fired generators’ partial closure.
Republican Tim Fox told The Gazette that third parties are pushing for the early shutdown of Colstrip Units 3 and 4. Units 1 and 2, the oldest generators of the four-unit power plant, are slated to close within the next six years, and the associated costs factor into Puget’s request to charge its million-plus customers more for electricity.
“Not when the rate case is set up solely to determine issues revolving around 1 and 2,” Fox said.
Puget Sound Energy holds a lot of sway over the future of the Colstrip power plant, one of the largest coal-fired generators in the west. The Washington state utility owns half of Colstrip Units 1 and 2, which it agreed in 2016 to shutter no later than 2022 in order to settle a clean air lawsuit against it and co-owner Talen Energy. The lawsuit was filed by the Sierra Club and the Montana Environmental Information Center.
Puget also owns a share of Colstrip Units 3 and 4. The company has indicated in its rate case that those newer units, built in the 1980s, could shut down by 2035. Two other utilities with ownership in the newer units, Portland General Electric and PacifiCorp have agreed to stop delivering Colstrip power to customers in Oregon in the 2030s. Oregon wants to cut the cord on coal power to eliminate its use of energy sources that emit carbon dioxide that contributes to climate change.
Units 3 and 4 are definitely part of Puget’s rate case, which takes an A-to-Z look at costs related to generation and distribution, including minor factors like efficient lighting. The case is not set up solely to determine issues around Units 1 and 2, according to the Puget’s own case filing. PSE has asked to raise rates 4.1 percent, which it estimates would drive up collections from customers by $87 million a year.
Some parties granted permission to intervene in the rate case are suggesting that PSE begin working into customer bills the cost of closing and cleaning up Units 3 and 4.
Montana economist Thomas Power has submitted testimony arguing that the time to charge customers for the environmental cleanup and closure of Units 3 and 4 is now and not after the units shut down.
Power told The Gazette this week that holding back the bill for the cleanup until after the units close means customers will for years be paying for a power plant that doesn’t provide electricity. Customers who hook up to Puget after the units close will be billed for a power plant that never served them, which Power argues is an unfair burden.
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That burden is also one Puget customers will soon face for Units 1 and 2, Power said. The decommissioning and cleanup costs for those units are expected to easily surpass tens of millions of dollars, according to the Department of Environmental Quality.
"My position is primarily that the lesson should be learned from what happened with 1 and 2," Power said. "We should be concerned with what happens with 3 and 4."
Power has suggested Puget use 2030 as its target closure date for planning what money should be raised in advance. The Sierra Club, which has also been allowed to intervene in the Puget rate case, has suggested an earlier closure date.
In its own testimony, Puget Sound Energy notes that it has shortened its “retirement date” of Units 3 and 4 from 2045 to 2035.
Montana’s attorney general can’t speak directly to Puget’s plan for Colstrip or make recommendations about that plan. Fox had been granted a seat at the bargaining table in Puget’s rate case in February, but chose not to make recommendations to the board overseeing the matter. The deadline for speaking directly to Puget’s proposal and making recommendations was June 30. The attorney general chose not to.
Fox said he has a strategy for future legal action and didn’t want to show his hand by filing testimony in June. The Washington Utility and Transportation Commission, which oversees the rate case as a quasi-judicial regulator, tells The Gazette that moving forward, Montana’s attorney general can speak to the comments made by other third parties but cannot address Puget’s proposal directly.
On Aug 29, the three-person commission will begin hearings to determine PSE’s proposed rate increase, as well as the recommendations of third parties other than Montana and the UTC staff.
There are recommendations being made concerning Colstrip by parties other than the attorney general. The Natural Resources Defense Council has recommended that Puget develop a community and worker transition program for Colstrip to help the community survive the shutdown of the plant, which the majority of Colstrip’s households depend on for work. The southeast Montana town has about 2,300 residents.
Testifying for NRDC, Power said Puget has an obligation to mitigate the consequences of shutting down portions of the power plant. He recommends that obligation be spelled out in Puget’s rate case.