Dive Brief:

• Washington Gov. Jay Inslee (D) has signed SB 6248, a measure allowing Puget Sound Energy to begin setting aside funds to pay for the future decommissioning of two Colstrip coal units in Montana, but vetoed a section of the legislature that would allow PSE to use those funds if the utility decomissioned two aging units before 2022, the Associated Press reports. 
• In March, Montana Gov. Steve Bullock (D) called for Inslee to reject the measure, saying it could have negative impact on his state's economy.
• The plant is likely to continue operating for several years. An earlier version of the bill called for its closure, but it was amended later in a compromise to set aside funds.

Dive Insight:

The Associated Press reports Gov. Inslee listened to Montana's concerns, but ultimately said he had to act in the best interest of Washington residents. Puget Sound can now begin collecting for the plants' future decommissioning. The utility owns 50% of the older units 1 and 2, and has previously estimated shuttering the units would cost between $130 million to $200 million. 

The Colstrip coal generation facility has been a source of tension between the two states as coal generation is phased out in Washington. Six companies own the Colstrip generating facility, and none of them are located in Montana.

While the bill passed easily, there was some concern. Washington Sen. Tim Sheldon (D) predicted “this bill will result in litigation," while calling for more time to study the economic impact of the plant's possible closure on Colstrip.

And at least one lawmaker has concerns about the costs. Rep. Bruce Chandler (R) previously indicated worries the utility may have underestimated the impact on ratepayers. "It could end up being far more expensive and take quite a bit longer than what the Legislature is expecting," he said.

Montana lawmakers attempted to protect the plant last year by imposing a fine on companies that close coal plant, but it failed to pass once the Washington legislature didn't pass a bill that called for a study to weigh the consequences of shutting the plant down.