The Power of Change
Wednesday, September 4, 2019
THE POWER OF CHANGE: Bellingham’s Climate Action Plan Task Force and their counterpart, Whatcom County’s Climate Impact Advisory Committee, are scrambling to bring a package of recommendations to their respective legislative bodies by the end of the year. But as fast as they’re moving on climate response and energy policy, climate and energy forecasts are also shifting at a remarkable pace.
In the past 18 months, the bottom has all but dropped out of the coal industry and coal-fired energy, reopening discussions of how Puget Sound Energy—the region’s largest investor-owned utility—will replace this form of power generation.
Blowing out years of controversy over the timetable to shutter their oldest coal-burning units, PSE in June announced two coal units at the Colstrip coal plant in Montana will retire by the end of the year, two and a half years earlier than required under a legal settlement. The economics of continued operation were no longer viable for the company. These two units have a capacity of five million tons of carbon pollution, the equivalent of one million cars on the road for a year.
While that reduction sounds promising, Montana’s legislature immediately sought to shore up Colstrip’s fading profile by a proposal to bail out the energy producer through taxpayer subsidy. The bailout would have the effect of extending the life of the Colstrip plant—one of the largest single sources of climate pollution in the American West.
In aggregate, industry analysts believe PSE’s withdrawal and Montana’s revanchist response shift investment in that state’s wind energy capacity and limit the utility’s ability to bring Montana’s abundant wind power to Washington.
Wyoming was similarly blindsided by the third Powder River Basin coal bankruptcy in one year. Cloud Peak and Westmoreland Coal Company flamed out earlier this year, laying off scores of employees while scuttling their health care and retirement benefits. In July, mine workers at Blackjewel LLC received their pink slips as they were stiffed on their 401K and health savings account contributions.
“While Blackjewel’s financial collapse was certainly dramatic, it was far from the first to hit coal country,” energy finance analyst Clark Williams-Derry wrote in a recent edtorial. “At least seven coal companies including Blackjewel, Westmoreland Coal, Mission Coal, Cloud Peak Energy, Cambrian Coaland Blackhawk Mining have declared bankruptcy since President Donald Trump took office. Over 60 percent of the coal produced in the United States comes from mines that have gone through bankruptcy one or more times since 2015, based on the U.S. Energy Information Administration’s list of the 23 largest coal producers as of 2017.”
Predictably, Wyoming’s revanchist legislature forwarded proposals to bail out that state’s dirty declining industry by rebranding “clean coal.”
What they couldn’t achieve through market forces or marketing manipulations, Montana and Wyoming sought to smash through by legal action, joining with several other states to sue Washington for denying a permit for a proposed coal-shipping terminal in Longview.
Their squeeze was knocked apart by the Washington Court of Appeals in late August.
The Appeals Court ruled that the Washington State Department of Natural Resources had the authority to consider the proposed developer’s degraded financial condition in its 2017 decision to deny a sublease for Millennium Bulk Terminals’ proposed coal terminal on the Columbia River.
“The company repeatedly refused to comply with reasonable requests for information related to its proposal,” Commissioner of Public Lands Hilary Franz said in a statement following the decision. “Washington’s aquatic lands are too important to risk on projects that are not transparent and financially sound.”
Yet—if coal is dead, what energy source will fuel the West?
That question—and the moving target it represents—has consumed a great deal of time in the deliberations of the twin climate action committees.
In 2018, PSE opened a process for proposals for new power resources. The utility selected 25 proposals for more analysis—projects that range from additional power generation from conventional and controversial (fracked natural gas) to renewable sources, more efficient conservation and reclamation of power, to modernizing power infrastructure to more easily integrate power from a variety of sources into the grid. The “variety of sources” aspect received the lion’s share of the PSE’s attention, in the form of power purchase agreement (PPA) proposals from smaller-scale power generation at decentralized sources.
“There is a significant trend in utilities to move to PPAs where generation assets are owned by developers or energy focused corporations as opposed to those owned by the local utility,” Sierra Club analysts noted of PSE’s proposed projects. “The focus of the selection is also on renewables, although the fossil fuel options are large in capacity.”
Sierra Club and others have commented on a lack of transparency in the specifics of these PPAs, a opaqueness of proprietary contract that makes it difficult to gauge how effective these sources may be in reducing the utility’s overall carbon profile. The Washington State Utilities and Transportation Commission has established rules that require utilities to make this data available to the public, and appeals for greater transparency are currently in front of the UTC.
Provisionally, all of this is potentially good news in Bellingham’s goal to become carbon-neutral in its energy profile by midcentury. As has been widely observed by City Council, COB goals cannot be achieved unless the city’s power vendor, PSE, is also on track to that target.
In the August meeting of the Task Force, PSE representatives reported existing programs in Bellingham are reducing carbon by 2.5 percent each year. Residents have achieved an energy profile of 40 percent renewable green power compared to the PSE’s grid average of 30 percent.
If you’re in a hole, stop digging. The digging appears to be slowing in the Puget Sound area, but the catastrophic volume of the hole—climate change—is still gaping.