Business, labor leaders praise legislative break for Centralia coal plant

Labor and business leaders in a May 16 statement praised the Washington state Legislature and Gov. Jay Inslee for the passage of Senate Bill 5297, which was signed into law on May 7 by Inslee and becomes effective in July.

The bill gives Washington utilities incentives to buy coal-generated power from TransAlta’s Centralia plant, allowing this power to count toward the renewable energy goals. The plant’s two units are due for a phased shutdown, one by 2020 and the other by 2025, and the idea is to give them power markets to sell into in the meantime.

The bill amends voter-approved I-937, the 2006 measure requiring utilities to generate 15% of their power from renewable sources by 2020. The last Centralia unit is scheduled to be phased out by 2025, and the bill is a good-faith measure to ease that transition and protect jobs at the plant, the labor and business leaders said.

“When labor, business, and elected officials work together, we can accomplish great goals for working families in this state, balancing job creation with a focus on environmental responsibility,” said Herb Krohn, Washington state legislative director for the United Transportation Union.

“We hope to see this process repeated in other decisions facing the state,” said Don Brunell, President of the Association of Washington Business, Washington’s state Chamber of Commerce. “We hope this is the start of a new way of doing business.”

A legislative summary of the bill said: “In general, a qualifying utility that fails to meet an annual target in I-937 for acquiring eligible renewable resources will still be considered in compliance with I-937 if: the utility spent 1 percent of its total annual revenue requirement to meet the eligible renewable resource targets, had no increases in the demand for electricity for the previous three years, and did not sign any contracts for nonrenewable resources, other than coal transition power, after December 7, 2006, the date I-937 became law.” The word “transition” relates to the idea that power from Centralia is in a transition period between now and when the units are shut.

The Alliance for Northwest Jobs & Exports, a non-profit advocacy organization representing the benefits of proposed (and controversial) bulk export terminals in the region, also praised the decision to pass and sign the Centralia bill. The proposed bulk export terminals would ship coal to markets overseas, as well as other bulk products such as grain.

“Economic growth and high environmental standards are both achievable when stakeholders are willing to work together. This bill shows that,” said Lauri Hennessey, spokeswoman for the Alliance. “We must continue to attract new investment into our state, as long as it’s done in a way that respects our local environment and communities. The proposed terminals adhere to this standard, and we hope to see this sort of cooperation around them as well.”

The coal units at the power plant, called Centralia Thermal, have about 1,340 MW of total capacity within two units. A coal strip mine at the site was shut several years ago and the plant now gets all of its coal from the Powder River Basin. U.S. Energy Information Administration data shows the plant taking coal last year from the Rawhide mine in Wyoming of Peabody Energy (NYSE: BTU) and the Spring Creek mine in Montana of Cloud Peak Energy (NYSE: CLD).

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.