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Washington Lawmakers Take Up Partial Closure Of Montana Coal Plant

January 22, 2016

Washington state lawmakers are considering a bill that paves the way for a partial closure of the Colstrip coal-fired power plant in Montana.

In the face of mounting environmental regulations, Puget Sound Energy wants to develop a plan to close two of Colstrip's four coal units – a move that could reduce the amount of coal-produced electricity used by Washington consumers.

The Washington utility is one of six owners of the overall plant, but co-owns units 1 and 2 with just one other company, Talen Energy.

The bill does not specify a timeline for closing the two units but it does require Puget Sound Energy to submit a proposed closure and decommissioning plan to the Washington Utilities and Transportation Commission by the end of 2017.

A bill before the Oregon Legislature lays out a framework for Portland General Electric and PacifiCorp to stop selling coal-fired power altogether in Oregon. That includes the power that both utilities currently draw from the Colstrip plant.

At a hearing on the bill Thursday, four lawmakers from Montana spoke out against the Washington bill, arguing closing part of the plant would hurt the economy of Colstrip and drive up the cost of power for Montana residents and companies.

As part of the plan, lawmakers would have to approve an exception to Washington's Emissions Performance Standard that would allow Puget Sound Energy to acquire some replacement coal-fired power from Colstrip unit 3.

At a hearing before the Senate Energy, Environment and Telecommunications Committee Wednesday, PSE government relations manager Nancy Atwood told lawmakers her company wants to use renewable energy tax credit funds to help cover the costs of decommissioning the coal units. She said that arrangement will help avoid major rate hikes.

The utility is already facing a lawsuit over a lack of pollution controls at Colstrip. Meanwhile, the Environmental Protection Agency is implementing new regional haze regulations, and the new Clean Power Plan calls for a 30 percent reduction in carbon emissions across the country by 2030. Atwood said those are just a few of the reasons the two older coal units at Colstrip will eventually have to close.

"Anticipating risk in the future such as caps on carbon emissions, carbon pricing and legal challenges to coal ownership, PSE feels its incumbent on us to find a reasonable path forward to mitigate these risks to our customers and company," she said.

Roger Garrett, PSE director of strategic initatives, told lawmakers it's just "a matter of time" before the company has to close the two units.

"These decommissioning and remediation costs are going to be encountered regardless at some point," he said.

Washington UTC Chairman Dave Danner told lawmakers he supports the bill because it provides "clarity and certainty" for the state's role in signing off on the closures. Ultimately, he said, the commission will decide whether the closure plan will result in lower costs and lower risks to consumers compared to business as usual.

"If we find this results in increased costs or undue risks, we won't be able to approve it," he said.

The Colstrip coal plant in Montana, which supplies electricity to customers in the Northwest and elsewhere.

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