Senate bill provides financial framework for future retirement of coal power facilities

–Bill doesn’t force shutdown of Montana coal plants
–Bill doesn’t impose deadlines for closure
–Protects Washington ratepayers

State Sen. Doug Ericksen, R-Ferndale, chair of the Senate Energy, Environment and Telecommunications Committee.

State Sen. Doug Ericksen, R-Ferndale, chair of the Senate Energy, Environment and Telecommunications Committee.

OLYMPIA – The Washington Senate passed a measure Wednesday providing an orderly framework for a Washington utility to decommission coal plants, should federal mandates make it necessary — and its sponsor, Senate energy chair Doug Ericksen, says he wants to make sure there is no misunderstanding about it.

“Unfortunately, there have been some statements that may have created the wrong impression of what the legislation does and how it would impact Montana,” said Ericksen, R-Ferndale. “This is a matter of much concern, because this bill is being watched very closely by our friends in Montana. We need to be very clear about what this bill does and doesn’t do.

“This bill does not eliminate any coal plant. Nor does it establish a schedule for a shutdown.

“All energy facilities have a life expectancy, but if federal rules force a premature closure of these two older plants, we need to make sure Washington utility consumers are protected against economic shocks. This bill provides for a framework, in case we need one. That’s why I was pleased to see so many members of the Senate voted for the measure today.”

Senate Bill 6248, which passed 42-7, is prompted by the possible shutdown of Plants 1 and 2 of the Colstrip Generating Station due to costly new federal clean-air rules. Puget Sound Energy, with 1.1 million Washington customers, owns 50 percent of the two plants, which are located 120 miles south of Billings. The bill gives the utility a way to finance closure and cleanup, by using federal tax credits – also known as “regulatory liabilities.”

Although the bill creates a mechanism to pay for shutdown of the two plants, it does not require shutdown or impose a schedule. In fact, it would prevent the financing mechanism from being used if a shutdown takes place before 2023, unless shutdown is judged prudent or is forced involuntarily.

Ericksen noted that the bill does not affect continued operation of the newer, cleaner and much larger Colstrip Plants 3 and 4.

“We have been working very hard for the last two sessions to craft a solution that works for both states,” he said. “I would be very concerned if I thought the legislature of another state was trying to shut down a major plant in my district. This is a matter of great importance to the people of Montana, and we need to be clear this legislation does not shut down any power plant.”

Ericksen observed there is much uncertainty about the new federal Clean Power Plan, which has been blocked by the U.S. Supreme Court until challenges can be considered.