Bills in the House and Senate set up certain favorable conditions for three private utilities, should they decide in the future to shut down a massive coal-fired power plant in eastern Montana that provides power to a chunk of the Pacific Northwest.
Supporters say the proposal gives the utilities the tools they need to begin divesting from coal power plants, including a way for the utility to issue bonds for shutdown and other costs that would be paid back by ratepayers over time.
But the Sierra Club and other critics say the proposal removes too much utility oversight, sets too long a timeline for closing a power plant and doesn't ensure that coal power gets replaced by something cleaner.
"It's important that we start the discussion about how to divest ourselves of energy supply from coal," said Rep. Jeff Morris, D-Mount Vernon, prime sponsor of HB 2002. "This is not a plant-closing bill. It's just a process to set up the opportunity to close the plant."
The bill would allow utilities to recover any mitigation costs from a plant closure, such as financial assistance to displaced employees, from its utility customers.
Washington state gets less than 14 percent of its power from coal. The state's only coal-fired power plant in Centralia is slated to shut down by 2025. Much of the state's coal-fired electricity comes into the state from the Colstrip Steam Electric Station in Colstrip, Montana, and the Jim Bridger plant in Wyoming.
To reduce carbon pollution, Gov. Jay Inslee and others are trying to persuade three investor-owned utilities operating in the state — Bellevue-based Puget Sound Energy, Portland-based PacifiCorp and Spokane-based Avista Corp. — to reduce or eliminate electricity they get from out-of-state coal plants.
PSE is the largest owner of Colstrip, which consists of four separate coal-fired units. PPL Montana operates the facility on behalf of six owners, including Avista and PacifiCorp.
Because of Colstrip's complicated ownership structure, no single owner can unilaterally decide to retire a plant. A provision in the bills sets up favorable conditions so that one utility could buy out another share of the coal plant with the goal of ultimately shutting it down.
There's an opportunity for Puget to acquire an additional interest in Colstrip, PSE's Ken Johnson told lawmakers at a Senate committee hearing Wednesday. "We believe it's in the best interests of customers to do that," he added.
Johnson noted there are existing federal regulations around air quality that will make it more economically challenging to operate Colstrip.
"As it's written right now, it's unacceptable," said Doug Howell, senior campaign representative with the Sierra Club.
The measure gives utilities up to 30 years to end coal use and doesn't ensure that coal is replaced by cleaner energy sources, he said. Current regulatory, economic and other pressures may force a closure sooner than this bill actually provides, Howell added.
John Rothlin with Avista told senators that Colstrip is a source of cheap, reliable energy and it remains a cost-effective resource for the next 20 years. Avista, which was involved with the other utilities in drafting the bill, gets about 9 percent of its energy from Colstrip.
Rothlin said Colstrip plant contributes $600 million to Montana's economy, so its future has major implications for that state's tax base and the plant's workers.
Sen. Jim Honeyford, R-Sunnyside, also worried about the impact on Montana, asking: "Do we have a moral responsibility for the jobs lost and the economic impact on Montana?"
Sen. Kevin Ranker, D-Orcas Island, said it's imperative that the state weans itself off coal. Senate Bill 5874, which he is sponsoring with Sen. Doug Ericksen, R-Ferndale, is a good start, though he would like to ensure that any coal replacement is significantly cleaner.