PSE coal plant sale likely to extend life of region’s largest polluter

Today Puget Sound Energy (PSE) announced that they would be selling their stake in Colstrip Unit 4 to Montana-based NorthWestern Energy, which intends to run the plant into the 2040s.

The sale is likely to extend the life of Colstrip, which is one of the largest coal plants in the American West. The plant had been on a path to retirement by 2025, the date by which Washington state utilities that own shares of the plant - PSE, Avista Utilities and Pacific Power - must be coal-free under the terms of Washington state’s recently passed 100% clean legislation. The sale still needs approval from the Washington Utilities and Transportation Commission.

By selling the plant to an out-of-state utility that plans to burn coal indefinitely rather than guiding the plant to an orderly retirement, PSE is undermining the legislative intent of the state’s clean energy law, which promised reductions in climate pollution from the electricity sector.

PSE is also selling their interest in a major Colstrip transmission line that could instead be used to add Montana wind projects. PSE most needs electricity in winter, exactly when Montana’s wind blows hardest and PSE’s existing Eastern Washington wind projects are at their lowest level of output. 

The sale could also lead to increased future costs to PSE customers by introducing uncertainty over which utility is responsible for the costs of cleaning up after groundwater contamination from coal ash ponds that have been leaking for decades. The Montana Department of Environmental Quality is in the process of producing a clean up plan, which is expected to cost the six owners of the plant at least $700 million. Determining legal liability for groundwater pollution becomes much more complicated if one owner is allowed to continue polluting longer than other owners. This potentially invites years of costly lawsuits and delays implementing a clean up plan that could employ displaced Colstrip workers.

The sale also increases the chances of PSE building fracked gas power plants that will put Washington state’s climate commitments out of reach. PSE recently announced that it would retire Colstrip Units 1 and 2 early next year, removing 350 megawatts of generating capacity. A sale of Unit 4 means a loss of an additional 90 megawatts now and 90 more megawatts in 2025. This sudden power deficit could provide a justification to rush through new gas plants that the utility has long called for in its long-range planning processes. PSE is majority owned by Canadian pension funds that are heavily invested in the production and transport of fracked gas; shareholders could benefit financially from PSE choosing fracked gas instead of wind, solar and battery storage that are cost-competitive now and cheaper over the long run.

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

“Washington is a climate leader, and allowing our state’s largest utility to cut and run from its mistakes isn’t leadership. By selling the Colstrip plant to an out-of-state polluter rather than guiding it to an orderly retirement, Puget Sound Energy is enabling more climate disruption, more dangerous wildfires and more extreme drought in Washington. PSE should work with other owners to set a date for retiring the plant while helping prepare workers and the community of Colstrip for a post-coal future.”

According to the Environmental Protection Agency, the Colstrip plant was the 11th largest single source of greenhouse gases in the United States in 2018, producing 13.3 million metric tons of carbon dioxide, the equivalent of more than 2.8 million cars on the road for a year.