May 10, 2018 Read More →

New Washington State Rules Are Another Blow to Colstrip Coal Plant

The Seattle Times:

State regulators this week stepped up their activism on the climate front by telling three utilities to reconsider the carbon-emission costs of producing electricity from coal and other fossil fuels.

The Washington Utilities and Transportation Commission directives were sent to Puget Sound Energy, Avista Corp and Pacific Power, which collectively serve more than 1.47 million state customers from a mix of coal, natural gas and renewable power. The commission asks the utilities to assign a hefty cost to carbon emissions, a pollution source that scientists say is driving climate change. This would be for planning purposes, and not used to try to justify higher rates. But such an accounting would bolster the financial case for the three utilities to hasten their planned exit from the Colstrip Generating Plant, a major Montana coal plant in which each as an ownership stake.

“The higher the (carbon) price, the less economic that facility will look,” said Ken Johnson, a vice president of Puget Sound Energy, which currently forecasts to be off of coal-fired power by the early 2030s. Puget Sound Energy already assesses a carbon cost of $27 a metric ton to power produced from Colstrip. But the new, pricier [$42] figure would weaken the financial case for generating power from the plant.

The federal carbon-price formula would require even bigger revisions for PacifiCorp. This is the parent company of Pacific Power, which brings coal-fired power to Washington from Colstrip as well as the Jim Bridger Plant in Wyoming. In planning documents recently submitted to state regulators, PacifiCorp doesn’t put a price on carbon until 2026 at the earliest, and then pegs that value to $4.76 per ton.

The commission also wants the utilities to take a harder look at other financial risks associated with Colstrip. They include the poor financial health of the mine operator, Westmoreland Coal Co., which has seen its stock value implode amid mounting debt and the soaring expenses — measured in the hundreds of millions of dollars needed to clean up the plant site where coal ash is stored. “We are deeply concerned with the direct costs of continued operations of Colstrip Units 1-4 and the magnitude of economic risk of continued investment in those units,” the commissioner wrote in a letter sent to PSE.

Colstrip has six owners, and they have agreed to shut down two of the four generation units by 2022. There has been no consensus on when the other two units will stop operating.

More: Washington State Regulators Tell Utilities To Tally Social Costs Of Carbon Emissions

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