Dive Brief:
- The Washington Utilities and Transportation Commission unanimously approved a multi-party settlement allowing Puget Sound Energy to increase electric rates by 1% and reduce gas rates by almost 4%, while clearing the way for two units at the Colstrip coal plant to be retired.
- The settlement, reached in September, allows PSE to recover its remaining costs associated with closing Colstrip units 1 and 2, which the utility will mothball no later than 2022.
- A total of $10 million will go towards community planning for the town of Colstrip, Mont. PSE and shareholders will each put $5 million towards the efforts, as the town absorbs job losses and revenues.
Dive Insight:
As increasing numbers of coal-fired power plants retire, there will be a stream of small towns left to cope with job and tax revenue losses as well as a changed way of life. The Billings Gazette reported closing Units 1 and 2 will have a $500 million impact southeast Montana over a span of three years. The settlement attempts to address some of the issues.
Along with the $10 million for community development, PSE has agreed to work with stakeholders to develop a "community transition plan" and funding mechanisms to address the loss of a major employer and tax payer. The settlement also creates a one-time $2 million increase in weatherization assistance funds for low-income customers.
Puget Sound Energy has agreed to shut down Units 1 and 2 no later than 2022. For Units 3 and 4, the order speeds cost recovery for those units by 18 years through 2027. The settlement also revalues PSE’s share of Colstrip and establishes a financing mechanism for the decommissioning and remediation of the Units 1 and 2.
Regulators acknowledged the significance and complexity of the proceeding. In the order, the three-member commission said the scope of the proceeding "distinguishes it as one of the major complex litigations before the commission during the past two decades."
The UTC hailed the settlement as an "historic agreement, which addresses, among other things, many challenging issues regarding the Colstrip coal-fired power plants that the commission and parties have grappled with for more than a decade."
PSE will be required to report on its progress in shutting down the two units, and give updates on the anticipated timeline for Colstrip 3 and 4. The utility must also complete an annual evaluation of the funds to decommission and clean up Units 1 and 2, and determine if they are sufficient.
The average residential power customer will see a monthly bill increase of about a dollar, to an average of $95.16. For gas customers, the average customer will see a decrease of $2.67, to $66.15.
Public comment on the case was lopsided. The UTC revealed it received 479 public comments on PSE's rate proposals, and only 7 supported it.
