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Agreement Outlines Costs at Montana Coal Plant

It is one of the largest coal-fired plants in the West.

Coal Mine

SEATTLE (AP) — Washington state regulators on Tuesday approved a settlement that outlines how Puget Sound Energy will fund closing and cleanup costs at the Colstrip coal-fired power plant in Montana.

The rate case approved Tuesday by the Utilities and Transportation Commission calls for a 1 percent hike in PSE's electric rates and a nearly 4 percent cut in natural gas rates.

The Bellevue, Washington-based utility has a large stake in Colstrip plant, one of the largest coal-fired plants in the West serving customers throughout the Pacific Northwest. It's seen as increasingly uneconomical to operate because of competition from cheaper power sources and mounting pollution control costs.

The settlement does not set closure dates for Colstrip's two newer and larger units, 3 and 4. But it accelerates the period for when the utility will be able to recover the costs of those units to 2027, much earlier than the previous 2045 date.

Colstrip's two older units are already required to close by July 1, 2022, under a legal agreement last year between environmentalists and PSE and plant co-owner Talen Energy. Tuesday's agreement sets "a financing mechanism" for the decommissioning and cleaning up the older units 1 and 2.

"Our order today approves a historic agreement, which addresses, among other things, many challenging issues regarding the Colstrip coal-fired power plants that the commission and parties have grappled with for more than a decade," the commission said in a statement Tuesday.

The agreement, which was reached in September, includes $10 million to help the community of Colstrip, Montana, transition. Half of that money would be paid by company shareholders.

It also includes a $2 million bump in weatherization help for the PSE's low-income customers.

Aside from PSE, other owners of Colstrip units 3 and 4, which were built in the 1980s, include Talen, Northwestern Energy, PacifiCorp, Portland General Electric and Avista.

Several parties signed on to the settlement, including the state of Montana, the Sierra Club, Industrial Customers of Northwest Utilities, the Northwest Energy Coalition, The Kroger Co., Renewable Northwest, the Natural Resources Defense Council and others.

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