Puget Sound Energy withdraws proposed coal plant sale

Today Puget Sound Energy (PSE) announced they will no longer pursue a plan to sell their stake in Colstrip Unit 4 and transmission capacity to Montana’s NorthWestern Energy and Talen Montana, following near-unanimous opposition to the deal. This decision leaves the future of the plant in doubt and speaks to the need for the plant’s owners to negotiate an orderly retirement and transition plan for workers and the local community.

The proposed deal would have given PSE’s 25% share of Unit 4 over to NorthWestern Energy, which indicated it intended to run it into the 2040s. PSE would have been required to buy back electricity for five years at an inflated rate, remained on the hook for future increases in clean up costs and handed over valuable transmission capacity that could be used to bring Montana wind power to Washington state. 

Staff at the Washington Utilities and Transportation Commission recommended denial of the deal, saying it provided no benefits to customers compared to the status quo. Staff was joined by the Public Counsel Unit of the Washington State Attorney General’s office and more than 20 state legislators, who said it undermined the intent of Washington state’s 100% clean electricity law, passed in 2019.

Earlier this year, the oldest two units at the plant were retired two years earlier than expected due to escalating operating costs and the continued record low prices for clean energy. Units 3 and 4 are owned by PSE, Avista Energy, Pacificorp (Pacific Power), Portland General Electric, NorthWestern and plant operator Talen Energy. In recent months, the utility owners have continued to prepare for an exit from the plant. Idaho regulators ordered that Avista be ready to exit the plant by 2025 or earlier, while Pacificorp submitted a plan that ensures their Washington customers wouldn’t be paying for coal power after 2023.

The lack of a plan for an orderly Colstrip retirement and transition leaves workers and the local community near the plant in limbo, and increases the chances of a sudden, chaotic closure and layoffs. To date, PSE is the only owner that has set aside additional funds for the enormous cleanup costs from the toxic waste ponds, setting aside up to $350 million for their shares of the plant.  PSE and Avista have set aside a combined $13 million to to help with future transition at the plant, but other owners have yet to chip in, including NorthWestern Energy.

Doug Howell, Senior Campaign Representative with the Sierra Club, issued the following statement:

“This decision makes the economic reality crystal clear: every day utilities burn coal means higher costs for their customers compared to investing in new clean energy. Delaying the inevitable closure of the plant puts the community at risk of sudden, chaotic job losses. It’s time for Colstrip’s owners to work together to guide the plant towards an orderly transition that takes care of workers and cleans up the decades of toxic coal ash pollution in the community.”

David Merrill, Montana-based Organizer for the Sierra Club, issued the following statement:

“The uncertainty around the future of Colstrip serves no one - it’s time for utilities and state leaders to step up and make sure that coal workers have a head start on new job opportunities when the plant closes. We can’t change the economics that are driving utilities away from fossil fuels, but we can make sure workers aren’t being left out to dry.”