Puget Sound Energy may cash out of Colstrip
Posted on 18 September 2017
Colstrip to receive up to $10 million as part of rate case settlement
The town of Colstrip would receive up to $10 million to mitigate economic impact from the closure of two electricity generating units owned by Washington utility Puget Sound Energy.
The settlement is part of an electricity rate case filed in January by Puget Sound Energy, a part owner of all four coal-fired power units at the Colstrip facility. The settlement agreement consists of five primary elements that allowed the state of Montana to sign on. These include:
1) The settlement in no way establishes a proposed or suggested shutdown or “end of useful life” date for Colstrip Units 3 and 4.
2) The acknowledgement by Puget Sound Energy that they are liable under state and federal law for decommissioning and remediation of the Colstrip facility. Puget Sound Energy has set aside an initial reserve fund of approximately $395 million for clean-up costs, a responsible action on behalf of the utility to prepare for whatever requirements the state of Montana determines Puget Sound Energy is liable for under state and federal law. Puget Sound Energy acknowledges that the amount of $395 million is a “place holder” amount that could change once the state of Montana determines the company’s final liability.
3) The acknowledgment by all parties to the settlement that the state of Montana has the sole jurisdictional authority to determine Puget Sound Energy's liability for decommissioning and remediation requirements of the Colstrip Facility, in a Montana forum.
4) The initial investment of $10 million by Puget Sound Energy in a “community transition fund” for the town of Colstrip, Montana, and the acknowledgment by all parties that this fund is a minimum, and is not capped by agreeing to the terms of this settlement. If approved by the Commission, Montana Attorney General Tim Fox will work to help organize the stakeholder group that will develop the plan outlining how this fund will be used.
5) The acknowledgement by all parties that this settlement in no way releases PSE from their legal and financial obligations to the state of Montana as established by current or future federal and Montana law. Also, that the settlement in no way limits the state of Montana’s jurisdictional authority.
The settlement must be approved by the Washington Utilities and Transportation Commission. A hearing to present the settlement before the commission is tentatively scheduled for September 27.