Could Puget Sound Energy Replace Its Coal with Coal?

At first blush, it sounds pretty good to anti-coal activists: Senate Bill 6248 would finally get the ball rolling on the lengthy process of transitioning Puget Sound Energy (PSE) off its share in a Montana-based coal-fired power plant, Colstrip.

Colstrip, located in the lonely plains of eastern Montana, has four generating stations, named in the order they were built: Units 1, 2, 3 and 4. The far-off coal plant currently produces about 20 percent of PSE’s generating capacity, and this bill “provides a framework,” says Nancy Hirsch, executive director of the Northwest Energy Coalition, for the retirement of the two oldest, dirtiest units: 1 and 2.

Their retirement has been some time in the making. They’re approaching the end of their natural life span in capacity and efficiency; they’d need prohibitively expensive updates to operate under increasingly strict emissions regulations; they’re on the hook for millions in settlement fees after the Sierra Club and other groups brought a lawsuit over water pollution; and cheap natural gas has shoved coal to the corner of the energy market.

It’s time, many say, for PSE to cut Colstrip loose. But it won’t be cheap: Washington’s utilties-regulating Utilities and Transportation Commission (UTC) just released a report estimating that decommissioning and cleaning up after Units 1 and 2 could cost PSE up to $97.4 million.

SB 6248 doesn’t make rules about when or how PSE should shut down the units, exactly; it just sets up the parameters and the deadline by which PSE will need to develop a plan. By the end of 2017, PSE has to pick a date to retire Units 1 and 2, explain how it will pay for that retirement, and specify what energy it’ll replace the units with.

And that’s the sticking point: SB 6248 includes a provision that could allow PSE, in the process of letting go of Units 1 and 2, to skirt Washington’s existing emissions laws in order to acquire more coal-fired power from Colstrip’s younger Unit 3. Or, as the bill puts it: The UTC is allowed to provide “exemption from [Washington’s] greenhouse gas emissions performance standards.”

The more he looked at the bill, “the less it made sense to me,” says local activist Tim Killian, creator of a Facebook page and website on the issue. He calls the bill “pernicious.” Because Colstrip Units 1 and 2 are aging out and burning a fuel that isn’t as cheap as it once was, they’re “going to die for all sorts of reasons on their own,” he says. “The only purpose of the legislation is to carve out an exception for them to buy a larger share in number 3. Why? It doesn’t make any sense at all. If you’re going to close down coal plants, why replace them with more coal?”

Using an EPA tool, Killian calculates that PSE’s total megawatt hours of coal-power generation, if it acquired this new share in Unit 3, would be higher than what it is currently generating with Units 1 and 2—183,565 megawatt hours higher.

Part of the reason for that, he says, is that Units 1 and 2 aren’t operating at full capacity anymore, and Unit 3 would be. What the bill does is it “ensures that Puget Sound Energy will be burning coal for at least another 10 years, rather than stopping now, and finding a cleaner source.”

But Nancy Hirsch begs to differ: “The bill doesn’t guarantee that they buy Unit 3,” she says. “It just gives them that possibility.”

PSE spokesman Grant Ringel wouldn’t confirm or deny Killian’s suspicions. “Any speculation about how much power to come out of Colstrip to PSE is dependent on so many variables,” he says. “You just can’t speculate.” There are “many miles to travel” before this process is over, he notes, “and many opportunities for public input along the way.”

What makes this whole thing so convoluted is how many stakeholders—and how many states—are involved in the discussion. “It’s complicated and it’s sensitive,” says Hirsch. “We want to be thoughtful about it.” Decommissioning Colstrip is wholly unlike decommissioning the TransAlta coal plants in Centralia a few years ago, she adds, since that facility “had one owner and it was all within Washington.” Colstrip, on the other hand, is owned in partnership by several major power utilities.

Ringel says the bill creates the possibility of buying out East Coast-based Talen Energy’s portion of Unit 3 just to simplify things. Colstrip has owners “in three states with somewhat different points of view,” he says. “A simplified ownership structure could allow things to move forward more quickly once a plan is developed and approved.”

The bill “has the promise of moving us forward” into cleaner energy, says Nancy Hirsch.

Montana lawmakers, by the way, aren’t particularly happy about how heavily Washington legislation could impact their own power grid and the tenuous economy of small-town Colstrip. Four Montana legislators attended SB 6248’s committee hearing in Olympia, pleading with Washington senators not to act. “Treat us like a neighbor, help us out here,” said Rep. Duane Ankney, a Republican from Colstrip.

Tim Killian argues that although decommissioning Units 1 and 2 should have a lot to do with PSE moving off coal completely, the first major bill to deal with it includes no actual requirements for any part of Colstrip to get shut down, and could easily open the door to almost as much, if not more, coal-fired power coming out of Montana into Puget Sound homes.

To Killian, that’s an unsettling precedent: the ability for utilities to be exempt from the state’s emissions laws. “To me, that’s dangerous language,” he says. “Why would we carve out an exception to our emissions standard? We’ve got these rules, but when we don’t like them, we’ll make an exception?”

Sara Bernard writes about environment and education, among other things, for Seattle Weekly. She can be reached at sbernard@seattleweekly.com or 206-467-4370. Follow her on Twitter at@saralacy. Get more from your favorite writers by subscribing to our weekly newsletters.

 
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