Coal power in Washington Legislature’s crosshairs after talk of Centralia plant’s revival

The Washington House of Representatives on Thursday approved a new coal tax that targets a single company.

It’s meant to thwart a surprise move by the Trump administration to keep the last coal-fired power plant in the Pacific Northwest operational.

The fast-moving bill would saddle TransAlta Corporation’s Centralia coal plant with extra costs that would make it highly uncompetitive in the electricity marketplace were it to restart. TransAlta idled the power plant in December in conformance with a 2011 agreement to phase out coal power in Washington by the end of last year.

“This bill is intended to close the book on that chapter of our state’s electricity generation; to once and for all say we’re done generating electrons with the dirtiest and most expensive way to do so,” said House Majority Leader Joe Fitzgibbon, D-West Seattle, the lead sponsor.

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Democrats in the Legislature were fired up after the U.S. Energy Department issued an emergency order to TransAlta in December. The federal agency ordered the Alberta-based company to keep the Centralia coal plant available for operation for a period of 90 days, which means until March 16, with possible extensions after that.

“The Trump administration will continue taking action to keep America’s coal plants running so we can stop the price spikes and ensure we don’t lose critical generation sources,” Energy Secretary Chris Wright said at the time. “Americans deserve access to affordable, reliable, and secure energy to heat their homes all the time, regardless of whether the wind is blowing or the sun is shining.”

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During the short floor debate in Olympia on Thursday, Fitzgibbon wasn’t having it.

“It is very much the prerogative of the state of Washington to decide what our energy strategy will be and how to achieve it affordably in a clean and reliable manner,” Fitzgibbon said.

The vote in the Democratically-controlled House was 63 to 33. Many, but not all, Republicans voted no. The GOP’s representatives put up little fight on this issue, unlike the party’s feisty resistance to broader tax measures.

“We know there could be times when we end up with shortages of power,” said state Rep. Ed Orcutt, R-Kalama, whose district includes the Centralia area. “As soon as this bill is signed, we’re locked out. We can’t respond if there is an emergency.”

The legislation now heads to the state Senate. An identical Senate version of the newly approved House bill – sponsored by Sen. Marko Liias, D-Edmonds – had no trouble passing out of committee last week.

Clamping down

The measure would apply a financial vise to coal power generation by removing tax and regulatory exemptions agreed to 15 years ago as part of the coal phaseout deal between TransAlta and the state.

The state’s sales tax would be levied on coal deliveries.

TransAlta would also have to purchase climate pollution allowances at the state’s periodic cap-and-trade auctions to cover emissions from burning coal.

Until now, the company’s coal plant had an exemption based on the understanding that the independent energy generator would invest in pollution scrubbers and then spend millions of dollars on economic diversification initiatives in Lewis County.

The cost of those carbon pollution allowances would be very high, given that coal has a much larger carbon footprint than the alternatives.

For its part, TransAlta stayed quiet lately and seems to have decided its best strategy is to lie low. The company has long employed a blue-chip lobbying firm in Olympia, but they offered no written or spoken testimony to fend off the new tax and fees, according to legislative committee records.

When asked for an update on its Centralia operations Thursday, a TransAlta spokesperson offered little: “We have no information to share at this time.”

An Olympia lobbyist for the environmental group Climate Solutions speculated that TransAlta was ready to move past its coal generation era and proceed with a proposed conversion in Centralia to natural gas-fired electricity production.

RELATED: Washington's last coal power plant will transition to natural gas

“They had a plan,” Leah Missik said in an interview. “I don’t think they want to operate” the coal-fired boiler anymore.

Plant remains idled

During a drive-by visit this week, no plumes billowed from the hulking 670-megawatt plant’s smokestacks. The rail spur was quiet on a weekday afternoon. The plant’s employee parking lot was pretty full, which raises the possibility that TransAlta didn’t lay off as many, or any, coal plant operators in January as it warned it would.

There also appeared to be little to no coal in the expansive outdoor storage yard next to the power plant. Without coal, the plant can’t run. A second major hurdle for a coal power revival is that a state energy transition law passed years ago forbids Washington utilities from buying coal power as of Jan. 1 this year.

In mid-January, state Attorney General Nick Brown and half a dozen environmental groups separately filed administrative appeals with the Energy Department seeking withdrawal of the agency’s emergency order on TransAlta. The Energy Department faces a Friday deadline to respond to the filings. Coal opponents can go to court if the Energy Department fails to respond.

“Assuming they don’t honor our request, we’ll be in ongoing discussions with the governor’s office and Ecology about next steps,” said Office of the Attorney General spokesman Mike Faulk.

In his administrative appeal, Brown voiced concern that the conflicting directions to TransAlta from the state and federal governments would delay the plans to convert the Centralia power plant to natural gas. Brown asserted the retrofit process is now on hold.

Brown and an assistant attorney general wrote in their brief that, “Pushing back the timeline of the plant’s transition to natural gas even 90 days risks the plant not being ready to produce electricity as a natural gas plant for the winter 2028-29 season.”

This story was originally published by the Washington State Standard.