Yesterday, the Washington Utilities and Transportation Commission approved a settlement and issued a final decision on contested issues in the Puget Sound Energy (PSE) rate case. The Commission decision allows PSE to recover costs for the eventual closure and clean-up of four coal-fired generating units at the Colstrip Power Plant in Montana while protecting Washington energy customers. 

In addition to setting the stage for retirement of one of the largest polluting facilities in the Northwest, the decision provides $10 million in transitional funding for the community of Colstrip to start planning for economic consequences as plant operations wind down. 

Colstrip units one and two will close by 2022 at the latest.  No final date has been determined for the shutdown of Colstrip’s remaining two units.  However, by 2027 money will have been set aside for the retirement and clean-up of the remaining units.

The decision will result in only a 1% price increase for PSE electric customers. Natural gas customers will see a 4% rate reduction. At the urging of the Energy Project, low-income PSE customers will benefit from additional funding for bill assistance and energy efficiency programs including an investment of $2 million in home weatherization for low-income households.

Wendy Gerlitz, Policy Director for the NW Energy Coalition, called the decision a victory for all parties and a model for how the Northwest can transition responsibly and compassionately to a coal-free electric system.  “The community of Colstrip, PSE, its customers, and the environment all benefit from this decision.  We’re especially pleased that PSE will contribute millions to help the community of Colstrip. Now we expect that Colstrip’s other five utility co-owners will follow PSE’s lead and contribute to help this town and region.”

The Commission also decided several other issues that support fair and reasonable rate design for customers.  The Commission denied PSE’s request for an increase in the monthly basic customer charge, and the Commission continued a rate mechanism known as “decoupling” that allows cost recovery for utilities’ fixed assets to be shared more fairly by customers and does not discourage energy conservation.

Rachel Shimshak, executive director of Renewable Northwest, emphasized another aspect of the decision that will help economic development in eastern Montana and improve PSE customers’ access to clean and affordable wind energy.  When the coal-fired units at Colstrip are retired, additional transmission capacity should become available. That capacity could be used to send electricity from Montana wind farms to metropolitan areas west of the Cascades. “We are pleased that the WUTC approved the settlement, and we are looking forward to working with PSE on affordable ways to increase west coast consumers’ access to Montana’s energetic renewable resources,” noted Shimshak. 

Noah Long, Senior Attorney at the Natural Resources Defense Council, observed that “The settlement on Colstrip issues works for the utility, its customers, and also for communities affected by the transition to clean energy. We see this as paving the way on what remains a difficult and complicated set of issues for many similar plants and communities across the country. We applaud all the parties that worked to achieve this result and the UTC for its leadership.

“By addressing the needs of the environment, of PSE, its customers, including those with low incomes, and the community of Colstrip, this settlement is a model for how the Northwest can effectively and fairly transition to a clean and affordable energy system,” said Nancy Hirsh, Executive Director of the NW Energy Coalition.

The NW Energy Coalition, the Natural Resources Defense Council, and Renewable Northwest, were joint intervenors in the rate case, represented by Earthjustice.