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Regulators approve plan to retire coal energy

Wednesday, December 13, 2017

State regulators approve a plan that could help sunset the region’s reliance on coal-fired energy.

The Utilities and Transportation Commission last week unanimously approved a multi-party settlement of Puget Sound Energy’s request to increase electric rates and decrease natural gas rates for its customers. The three-member commission approved a 1 percent increase in electric rates, allowing an increase of $20 million in PSE’s electric revenues, and a decrease in natural gas rates of 3.9 percent, resulting in a $35 million decrease in natural gas revenues.

The settlement, reached in September, also revalues PSE’s share of the Colstrip coal-fired power plants in Montana, and establishes a financing plan for the decommissioning and remediation of the older Colstrip Units 1 and 2, which the company has agreed to shut down no later than 2022. While the settlement does not set a shut-down date for other units, it accelerates the period for recovering the costs for those units from one ending in 2045 to one ending Dec. 31, 2027.

The approved settlement requires PSE to report on its progress to retire its Colstrip assets including an annual updated estimate of retirement dates for Colstrip Units 3 and 4; provide an annual accounting for decommissioning and remediation expenditures; and submit an annual evaluation of the sufficiency of funds to decommission and clean up Colstrip Units 1 and 2.

“Our order today approves a historic agreement,” the commission noted, “which addresses, among other things, many challenging issues regarding the Colstrip coal-fired power plants that the commission and parties have grappled with for more than a decade, while resulting in a modest 1 percent increase in electric rates and a nearly 4 percent decrease in natural gas rates.”

The Colstrip plants, which produce a quantity of PSE’s regional energy portfolio, have slowed plans around the state to move to carbon-neutral energy sources, Bellingham City Council Michael Lilliquist noted at a press conference in November. Washington has signed up for some of the boldest climate goals of any state in the country, committing to 80 to 95 percent reductions in climate pollution by 2050.

“In Bellingham our goal is to be carbon-neutral and non-polluting in the long term,” Lilliquist said. “Put simply, Bellingham cannot reach that goal unless PSE is providing electricity that is aiming for that same goal.”

“In many cases, PSE has been our partner as we’ve achieved carbon reduction goals,” Lilliquist said. “But the reality is, as long as the electrons coming across the wires are from polluting sources, we cannot fully achieve our goals.”

“Washington State just got closer to ending its reliance on coal power,” Doug Howell, campaign representative with the Sierra Club, commented on the decision. “This settlement paves the way for Puget Sound Energy to end its stake in Montana’s Colstrip coal plant without leaving its customers to pay for an inoperable coal plant or leaving Colstrip workers behind. Now is the time for PSE to do its part to help Washington State meet its climate goals by mapping out a transition to 100 percent clean energy.

“We believe the economic realities will lead to closure by 2025 or earlier and the single most important action right now is get outstanding debt paid down so that the next generation of Washington families aren’t stuck paying for an inoperable coal plant,” Howell predicted. “While this is a step in the right direction, it is not an official retirement date, which is needed for both PSE and the state of Montana to begin a real transition discussion.”

Bellevue-based Puget Sound Energy provides electricity service to more than 1.1 million electric customers living in eight Washington counties, including King, Pierce, Island, Kitsap, Kittitas, Skagit, Whatcom, and Thurston. The company also operates a 12,000-mile natural gas distribution system and supplies natural gas to 785,000 customers, primarily in the Puget Sound area of Washington.

The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington.

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