SB 338 | colstrip-facts

The Montana House Energy Committee voted 13-3 to table SB 338 on April 10, 2017.

We now urge the Montana House of Representatives to vote NO on this punitive bill.

NEW: Puget Sound Energy testimony before the Montana House Energy Committee

A vote in favor of the proposed amendments as well as the bill is only going to hurt the employees and community of Colstrip. If this bill is signed into law, this issue will move to courtroom where it will be decided by lawyers and judges instead Colstrip stakeholders. Read full text of testimony here.-->>

NEW: Puget Sound Energy is committed to a robust jobs plan for Colstrip. We anticipate zero layoffs as a result of the 2022 retirement of Units 1 & 2.

Puget Sound Energy is not anticipating any layoffs resulting from the anticipated 2022 retirement of Units 1 & 2. Approximately 34 jobs are exclusively assigned to Units 1 & 2-not hundreds as bill proponents have led you to believe.

We are 100% committed to leveraging the current work force through job re-training to ensure steady employment for Colstrip employees well beyond our currently anticipated shutdown date of 2022, in addition to the employees that are redeployed into Units 3&4. Additionally, we anticipate new jobs will be created with the construction of a new water treatment facility to be built in Colstrip and additional remediation work that will continue in Colstrip for many, many years. Learn more here.-->>

Senate Bill 338 is opposed by a broad representation of Montana voices. Read more here.-->>

SB 338 Questions & Answers

The following Q&A is based on questions that were raised during the April 7, 2017

House Energy Committee hearing on the decommissioning bill (SB 338).

Q1: Who built the initial town infrastructure in Colstrip?

A: The owners of Units 1 and 2 initially built the town infrastructure when Units 1 and 2 were built. The owners of Units 3 and 4 made additional infrastructure investments when those units were constructed.

Q2: Who initially funded the construction of the water pumping station on the Yellowstone River?

A: The owners of Units 1 and 2 initially funded the construction of the water pumping station when Units 1 and 2 were built. The owners of Units 3 and 4 made additional investments to expand the station when Units 3 and 4 were constructed.

Q3: What is “Colstrip Comm Serv”?

A: Colstrip Comm Serv manages agreements relating to the non-generating real property in which both PSE and Talen have ownership interests in Colstrip. These types of agreements are limited to transaction where the annual revenue or rental amount is $25,000 or less, and do not include documents that transfer or affect any permanent interest in the real property (e.g., deeds).

Q4: What happens to the Colstrip transmission line when Units 1 and 2 close?

A: The closure of Units 1 and will free up capacity on the Colstrip transmission line. Parties interested in utilizing that capacity would be required to go through application processes that have been established by the Federal Energy Regulatory Commission (FERC).

Q5: Will the Colstrip Generating Station continue to provide tax revenue to Colstrip and the State of Montana when Units 1 and 2 close?

A: Yes. Colstrip Units 1 and 2 represent less than 1/3 of the operating capacity of the entire Colstrip station. Units 3 and 4 will continue to operate, and have no stated closure date.

In 2016:

The owners of Units 3 and 4 paid approximately $3.5 million in total production taxes associated with the output of those units.
PSE (which owns a 25% share of Units 3 and 4) alone paid approximately $5.5 million in property taxes on Units 3 and 4.
PSE paid an additional $3.1 million in property tax on the transmission line that runs through 13 counties.

Q6: How much will PSE and Talen invest to decommission and remediate Units 1 and 2?

A: Remediation work is significant and will provide an economic lift for the community of Colstrip. SB338 does nothing to impact the planned remediation work that will happen at Colstrip. As shown in PSE’s current rate case materials now before the Washington Utilities and Transportation Commission:

Colstrip owners will invest more than an estimated $200 million for remediation that will continue for many, many years after the eventual closure of operations.
Between 2020 and 2023, approximately $77 million will be invested to design and construct a new water treatment facility to be built in Colstrip.

As part of the decommissioning and remediation effort, PSE is committed to leveraging the current work force through job re-training to ensure steady employment for Colstrip employees well beyond our currently anticipated shutdown date of 2022, in addition to the employees that are redeployed into Units 3&4.

Q7: If SB 338 fails, will PSE still be on the “hook” for its existing obligations to perform environmental remediation at Colstrip?

A: Yes. SB 338 does not impact PSE’s existing obligation to perform environmental remediation at Colstrip.

Q8: Why is PSE opposed to the social costs that it would be required to pay under SB 338?

A: The vague and arbitrary social costs owners would be required to pay under SB 338 are essentially an exit fee that that State of Montana would charge owners without regard to the legal or potential operational requirements that owners face regarding the closure of the facility, or the market conditions that make coal more expensive than natural gas generated power today.

Q9: What is the current status of Puget Sound Energy’s General Rate Case?

A: PSE filed the General Rate Case at the Washington Utilities and Transportation Commission (UTC) in January, 2017. The General Rate Case is currently in process, and a decision is expected in December, 2017.

Q10: Is SB 338 necessary to enable the State of Montana to participate in Puget Sound Energy’s General Rate Case?

A: No. The Washington Utilities and Transportation Commission has granted the State of Montana limited intervenor status in Puget Sound Energy’s General Rate Case.

Q11: Did PSE work with stakeholders from Colstrip and the State of Montana prior to the introduction of SB 338?

A: Absolutely. PSE participated in various meetings and had discussions with MT state officials and lawmakers regarding the transition and closure of Units 1 and 2 over the past few years. In fact, the Washington State Senate also held meetings inviting their Montana colleagues for a discussion on this very topic. Also, the Colstrip owners sat down with Governor Bullock on May 11, 2016. PSE executives participated in the hearings that the Montana Energy and Telecommunications Interim Committee held in July, 2016. Moreover, PSE leadership also met with key Montana lawmakers including the sponsor of SB 338. At the request of Montana officials, PSE recently hosted a delegation from Montana officials to discuss Montana’s renewable energy future.

Q12: What will PSE do if SB 338 doesn’t pass?

A: If SB 338 is not signed into law, PSE is committed to working with Montana stakeholders and the Washington Utilities and Transportation Commission.

Q13: What message will Montana be sending to businesses if SB 338 passes?

A: The message of SB 338 to PSE and other businesses is that the State of Montana condones punishing businesses for making a perfectly legitimate (and legal) business decision based on market conditions.

Q14: What was the Washington Colstrip legislation (SB 6248) that passed in 2016?

A: The Washington State Colstrip bill provides the Washington Utilities and Transportation Commission (UTC) with a way to reserve existing customer assets, such as their production tax credits, to pay for prudent, UTC-approved remediation costs.

The legislation did not provide for a “pot of money”

The legislation did provide for a mechanism to “to finance prudently incurred decommissioning and remediation costs” that are approved by the UTC.

Q15: What will PSE do if SB 338 passes?

A: If SB 338 is signed into law, all conversations between PSE and the State of Montana will occur in the context of litigation regarding SB 338.