WASHINGTON STATE

Washington State House Democrats

HOUSE DEMOCRATS

Rep. Morris bill would create a pathway for utility companies to close coal plants

OLYMPIA – Washington utilities maintain a diverse energy supply to provide customers with reliable and affordable electric power: hydropower, wind, natural gas and coal. When any one of those energy sources is removed, the reliability and affordability for customers is threatened.

Despite state, federal and consumer pressures, the transition for utility companies to end coal-fired energy generation is more complicated than simply closing coal plants.

But today, Rep. Jeff Morris (D – Mount Vernon) introduced legislation that would give Washington state utilities a regulatory process and financing mechanism to phase out coal and close plants.

“Utilities and consumers all have a vested interest in seeing the retirement of an 18th Century energy source in favor of clean, sustainable energy for the future,” Morris said. “The problem is, the market instability and financial burden caused by the removal of a large energy source eventually falls on consumers, and they see their rates skyrocket. If we expect our utility companies to end their use of coal, we need to give them a viable exit strategy that protects consumers.”

Many coal plants are owned by multiple entities, and none can make unilateral decisions about the future of any plants. However, investor-owned utilities that operate in Washington like Avista, Pacificorp, and Puget Sound Energy would be offered a legally-approved mechanism for private financing to pay for the closure and environmental mitigation costs should all owning parties decide to close the plant.

The closure and ensuing costs would be financed by low-interest, 30+ year bonds that are slowly paid back by customer rates. The bonds would not be backed by the state government and they would not draw from state revenue sources. The mechanism enables a transition away from coal with a minimal impact on customer bills.

“Having healthy utilities is critical to our clean energy future,” Morris said.

In order to qualify for the closure assistance, utility companies would have to opt in to the Washington State Coal Generation Retirement Program. This requires the filing of binding notice with the Utilities and Transportation Commission, which gives the UTC regulatory power to ensure the plant is closed within 20 years.

Morris’ legislation would not force the closure of any coal plants. The program is voluntary and meant to provide transition from coal-fired energy at the lowest impact to utilities and consumers.