Colstrip to Receive Minimum of $10 Million for Community Impact As Result of Rate Case Settlement


Colstrip to Receive Minimum of $10 Million for Community Impact As Result of Rate Case Settlement

Through a settlement agreement filed Friday with the Washington Utilities and Transportation Commission, the town of Colstrip would receive a minimum of $10 million dollars to mitigate economic impact from the closure of two electricity generating units owned by the 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 units at the Colstrip facility.

Speaking to the settlement, Montana Attorney General Tim Fox said, “In representing the state’s interests in this rate case, my office has made clear through negotiations with PSE our expectation that the utility fulfill its responsibilities to the state of Montana. This settlement is a good start, and we urge the Washington UTC to approve it as agreed upon by the parties.”

In July, Attorney General Fox met in Helena with executives from Puget Sound Energy to urge the utility to create a community transition fund for closing Colstrip Units 1 and 2; to prepare to cover the full cleanup costs for Units 1, 2, 3 and 4; as well continue to operate Units 3 and 4 for several decades if the units are well-maintained and provide value to their customers. This settlement is the result of that meeting, as well as negotiations through the formal filing process with the other parties to this proceeding.

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 PSE that they are liable under state and federal law for decommissioning and remediation of the Colstrip facility. PSE 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 PSE is liable for under state and federal law. PSE 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 PSE’s liability for decommissioning and remediation requirements of the Colstrip Facility, in a Montana forum.

4)    The initial investment of $10 million by PSE in a “community transition fund” for the town of Colstrip, Montana, and the acknowledgment by all parties that this fund is a minimum amount, and is not capped by agreeing to the terms of this settlement. If approved by the Commission, Attorney General 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.

Click here to open PDF document to view the full settlement agreement.

Click here to open PDF document  to view the Attorney General’s letter in support of the settlement.


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