April 8, 2020: Last week, the Washington Utilities and Transportation Commission approved a settlement in the Avista rate case.
There are several key provisions of this settlement that pertain to the Colstrip coal-fired power plant, located in Montana but serving Washington customers. Sierra Club has long advocated for the ultimate closure of Colstrip and a just transition for the community and workers.
First, in line with the Washington Clean Energy Transformation Act (CETA), a law that requires utilities to eliminate coal-fired generation from serving Washington customers, the Settlement contains capital investment limitations at Colstrip. In part due to this legislation, Avista agrees in the settlement that it will not support capital expenditures at Colstrip that go beyond routine capital maintenance costs that would extend the plant's operational life beyond December 31, 2025.
Second, the Settlement sets aside, into a regulatory asset, at least $33 million for decommissioning and remediation costs at Colstrip, and if those costs are more, Avista can ask the Commission to "true up" these costs to a higher amount in a future rate case, less insurance monies. This protects both the community of Colstrip, who will have the contaminated areas reclaimed, and Washington ratepayers, who will not incur unnecessary expenses.
Third, Avista will provide $3 million in funds for a Colstrip Community Transition fund, divided between shareholder and ratepayer funds. The fund aims to provide the local residents near Colstrip in Montana with monies to help move their economy beyond Colstrip's eventual closure. Importantly, there is specific eligibility for tribal members and government, and other local entities. These funds might be used for education, worker retraining, low income energy efficiency or renewable energy programs, or other projects that aid in transitioning the community away from coal-fired generation. No projects that fund fossil fuels are eligible. Avista can choose to contribute more funds to transition efforts beyond the $3 million pledged in this Settlement. This section of the Settlement is aligned with the Sierra Club's goal of endeavoring for a just transition to cleaner sources of energy.
The settlement contains other additional benefits, including $3 million for weatherization funds for low-income households, a plan to limit utility disconnections for low-income ratepayers, support for electric vehicles, and notes that Smartburn installation for Colstrip Units 3 and 4 is not included in the rate base for this Settlement. Allied groups like the Northwest Energy Coalition and the Energy Project played a significant role in the case, and helped achieve many parts of this settlement.